Manufacture, services drive growth

Why does the government keep pursuing a 6.7 per cent GDP growth target for the year, albeit this rate is said by many policy-makers and economists to be likely infeasible?

This year is the second year we’ve been implementing the 12th Party Congress Resolution and the National Assembly Resolution on the Five-year Socio-economic Development Plan for 2016-2020, with an annual economic growth rate averaging at 6.5-7 per cent during the period.

Vietnam economy expanded 6.21 per cent last year. Therefore, to reach the average growth target for this five-year period, the growth level in the succeeding years must be higher, in which 2017 holds a key role with a crucial impact on performance in the upcoming years. This is why the government and the prime minister are highly committed to achieving the 2017 growth target.

On the other hand, given the country’s deeper international integration, if we don’t move fast, we can hardly shorten the development gap with other countries, particularly those within the region that are witnessing a raft of innovations and achievements.

For a developing nation like Vietnam, higher growth is very important to creating development resources for years ahead, in a bid to ensure economic balances, particularly public debt, employment generation, poverty reduction, environmental protection and sustainable development. This will contribute to ensuring social order and security, and political stability of the country.

It is the government’s long-term and strategic stance that we’re not pursuing high growth at any expense or at a trade-off between environment and growth, but we’re also not wasting any growth opportunities and potential.

What is the groundwork for the government to realise that growth target?

As the economy grew modestly in the first quarter, the task in the remaining months will be very challenging. Still the existing situation both at home and abroad is offering us some opportunities.

According to big international organisations, such as the World Bank, the International Monetary Fund and the Asian Development Bank, the world is witnessing a brighter outlook.

Besides, Vietnam’s economy is also expected to further flourish. Specifically, agriculture has been rebounding strongly after hardships in 2016. Positive growth can also be seen in the processing and manufacturing, and service sectors. Particularly the tourism sector has attracted an average number of one million international tourist arrivals per month, over the past few months. Vietnam has also lured a big volume of foreign direct investment, and witnessed a sharp rise both in the number of enterprises and registered capital.

All these factors have attested to the feasibility of the growth target for this year. Also, in order to hit this target, the government and the prime minister have asked ministries and sectors to devise their own solutions and development scenarios, so that the economy not only can achieve more stable growth, but also have direct impacts on growth-stimulating factors in 2017.

What measures will the government apply to boost growth?

Most recently, the government enacted April resolution, introducing a raft of concrete measures to every sector in the economy. Besides, the Ministry of Planning and Investment (MPI) is also drafting a directive to submit to the government. The directive will urge ministries, sectors and localities to make greater efforts in implementing tasks and measures to push up growth in all sectors, for the ultimate target of reaching the 2017 economic growth target.

There will be two groups of key measures. The first one covers measures used to ensure stable macro-economy, control inflation, increase economic structuring and institutional reforms, improve labour productivity, and expand export and domestic markets.

The second one, which must be expedited this year, seeks to immediately tackle hurdles facing businesses, including slashing business costs, removing obstacles in land, infrastructure and human resource fields, as well as boosting the disbursement of investment capital sources.

What steps will be taken by the MPI as an advisory body to the government in macro-economic management?

The prime minister has required leaders of ministries and sectors to make commitments and hold prime responsibilities before the government to ensuring the successful accomplishment of 2017 growth targets.

MPI, as an advisory body to the government, is committed to closely co-operating with other ministries, government agencies and localities in the implementation of the tasks and measures assigned by the government and the prime minister.

In addition to drafting the prime minister’s directive, right in June, MPI will send working groups to key economic zones and locations of major investment projects so as to work with investors and localities, and help them out of difficulties.

If their difficulties can only be removed by the government and the prime minister, we will send their proposals to the government and the prime minister.

Although the tasks ahead are tough, they can be done successfully if we make strong determination and well implement the set solutions. Only when we weather these difficulties and realise our targets can we have more driving force and strength to accomplish our bigger dreams in the future.