PM Phuc sets forth measures to enhance productivity

Prime Minister Nguyen Xuan Phuc praised the forum's constructive spirit and useful recommendations submitted by Vietnam's development partners

The PM welcomed all speeches and reports at VDF yesterday, which affirms that productivity increase plays an important role in Vietnam’s GDP growth. Productivity increase contributed 89 per cent of GDP growth in 2017, from 66.3 per cent in 1999-2000 and 61.9 per cent in 2000-2012.

He said that increasing productivity is a big challenge for Vietnam. However, there is potential and many opportunities to accelerate productivity. At first, it is necessary to effectively deliver and use resources, drastically reform the economic structure, spur innovation, and apply science and technology to enhance the productivity of each enterprise.

In addition to its efforts and innovation, Vietnam needs support and advisory from development partners, the domestic and foreign business community, and experts to find solutions and appropriate policies to facilitate the progress of science and technology, the spread of Industry 4.0, and Vietnam’s deeper integration into the world economy.

In general, it is necessary not only to enhance labour productivity, but also to improve capital efficiency and, most importantly, to raise total-factor productivity (TFP). Increasing productivity is the foundation to improve the competitiveness of almost all countries.

At the forum, the PM raised some major tasks and solutions to continue increasing productivity, leveraging sustainable development in the upcoming time.

First, in order to enhance capital and resource efficiency, Vietnam needs to drastically reform its banking system and financial markets to reach a larger scale, with heightened transparency and fair competition.

Second, labour productivity is a major foundation and motivation, not only for the development of every business and economic growth, but also for the improvement of income and welfare of the people. The Vietnamese government heavily promotes investment in education-training, in order to improve academic levels, working skills, and maximise creativity.

Other issues include wage reform and economic restructuring. The nation is relocating the workforce from the agricultural sector, which accounts for 42 per cent of the total labor force, to the industrial and services sectors to enhance general productivity geared towards higher value and lower resource usage.

Third, the government has raised the TFP by pouring more investment into science, applying advanced technology, increasing criteria for research and development, upgrading infrastructure, smart connections, boosting the reform of legal institutions, accelerating the state management capacity, improving the business environment, and reducing transaction costs for the economy as well as upholding people and business’ spirit for renovation. As a result, Vietnam could overcome the middle-income trap.

Fourth, the country is actively enhancing international integration in the spirit of strengthening internal forces, overcoming challenges and effectively exploiting opportunities from Free Trade Agreements, particularly new-generation FTAs, such as CPTPP, EVFTA, and RCEP. They will open up various big markets for investment and trade, providing Vietnamese businesses access to international standard production facilities and raising the development level of the economy.

Fifth, the Vietnamese government will consistently maintain socioeconomic sustainability, stabilise the economy, uphold democracy, combat corruption, and realise the 17 sustainable development goals of the United Nations.

"I agree with you and emphasise that the most important task ahead is to transform these ideas into actions at all levels," PM Phuc told the forum participants.

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