Government’s open approach enables a 24-hour economy

Tran Thi Hong Minh - Director Central Institute for Economic Management (CIEM)

NTE covers all activities related to business and consumption at night. The night time can be defined as anything between 6pm-6am of the next day depending on the circumstance. Whenever the “night” is, an NTE development project just approved by the government has created a new definition.

Night is when economic activities related to production, services, and consumption create a lot of jobs and generate value for both people and society, instead of just a time for rest and gathering with family after work only.

NTE has already been established and developed for decades in numerous countries. In the United Kingdom, NTE usually contributes around £66 billion ($83.5 billion) annually, equivalent to around 6 per cent to the nation’s GDP, and creating 1.3 million jobs. London alone generates 40 per cent of this.

In Australia, Sydney is also known as the capital of NTE with an annual value of $27.2 billion and creating 1.1 million jobs. Deloitte Access Economics researched and anticipated that this city could gain additionally $16 billion every year by providing more efficient policies.

However, with China now interested in NTE, this particular model is receiving attention from other Asian countries.

Meanwhile, despite a lot of achievements in economic development, Vietnam still faces the risks of a middle-income trap. To overcome this, Vietnam is looking for new growth motivation and especially new economic models.

So the government has set eyes on NTE for the past year, after Vietnam reported a lot of good results in economic growth and consumption last summer.

Last month, the prime minister approved Vietnam’s NTE development project after researching and receiving consultations from ministries, agencies, and localities. The project not only confirms a drastic schedule, but also expresses an open mindset for the model.

First, the time limit for NTE is widened to its maximum, from 6pm to 6am the next day. That means economic activities can run a whole 24 hours per day to create a “24-hour society”. Although limited in some sectors like culture, entertainment, catering, shopping, and travel, NTE development is expected to spread and generate value to other business sectors.

Second, the agency drafting the project, the Central Institute for Economic Management, also pointed out and discussed a variety of sides of NTE, both benefits and risks.

Despite not having enough data and information to fully calculate the benefits and risks, the project has been approved and 10 locations will pilot this model. This confirms the open mindset of the ministries and government when considering and making decisions on a new policy.

At the time the NTE project was approved, the country was sustaining the impacts of COVID-19. Numerous people are worried about the implementation of the project because a lot of tourism cities and locations have been restricted, and resources have been concentrated to fight the health crisis.

In fact, the pandemic cannot overshadow the process of building and consulting NTE development. The approval of the project also confirms the determination of the government to utilise all opportunities and apply various models for economic growth. Therefore, I believe that NTE will be piloted and carried out widely.

There will be a lot of things to do to concretise the NTE policy in practice. However, NTE has remarkably impacted other economic models like the sharing economy and digital economy. For example, food delivery, a part of the sharing economy, has already been popular in the time of NTE.

As a result, NTE development and other economic models have been driving the economic growth of Vietnam. We hope that ministries, agencies, and localities will drastically provide some specific solutions and plans to evolve the model fast and sustainably in the time coming.