New economic challenges and competition expected

Can you assess the performance and outlook of the economy this year?

We can see some signals of the recovery, but they are quite fragile, which is reflected in numerous macroeconomy reports. The index of industrial production in July rose by 3.9 per cent on-month, and 3.7 per cent on-year.

In the first seven months of 2023, foreign investment mobilisation increased by 4.5 per cent on-year (the first positive growth in the year) to nearly $16.24 billion; total export turnover reached $195.4 billion, down 10.6 per cent on-year, but the trade surplus was $16.53 billion.

Phan Duc Hieu, standing member of the National Assembly Economic Committee

I see that the world and Vietnam’s economy are still struggling with numerous challenges. International organisations are providing different outlooks on the global recovery, and inflation still remains high, as monetary policies are tightened and interest rates are going up globally. This causes a decline in growth and consumption demand in many countries and major partners of Vietnam, such as the US, EU, Japan, and South Korea.

As a large-opening economy, but poor in adaptability and resistance to external shocks, and weak international competitiveness, Vietnam’s economy will continue to be affected by global economic uncertainties.

Besides this, we also have to face new challenges, fierce competition, and the trend of green consumption. The competition coming from not only among businesses but also among countries in the export market is increasing amid a very difficult global backdrop. Therefore, even if the world economic situation changes more positively, it does not mean that Vietnamese enterprises will automatically benefit.

For green consumption, if enterprises are not ready and do not prepare anything, they will be left behind in the value chains with no corresponding recovery when the market finally brightens.

What helpful solutions can be offered for the business community?

In the current context, institutional reform becomes increasingly important. It not only aims to cut down and simplify administrative procedures, but also aims to reduce compliance costs arising from legal regulations for businesses.

The recovery in the country depends a lot on the effort, efficiency, and implementation of solutions, including fiscal, monetary and institutional policies. If the government can do these very well, it will not only reduce legal difficulties but also cut financial pressures, and improve the competitiveness of enterprises.

What can we do to strengthen institutional reforms in 2023?

The government has found the problems and has strong solutions for reform. Specifically, both Dispatch 644 and Resolution 105 require the reduction of administrative procedures and under-the-table costs. These highlight how new regulations must not be issued if they raise costs for businesses.

Last week, the prime minister established a working group on administrative procedure reform, and Deputy Prime Minister Tran Luu Quang was the head of the working group.

The working group is an interdisciplinary coordination team, helping the PM direct relevant authorities to implement the objectives, tasks, and solutions on administrative procedure reform; tighten discipline and improve policy response capacity.

The group also helps the PM in handling reports and recommendations of individuals and organisations related to problems and burdens of enterprises and people on policies and administrative procedures.

They should work closely with the relevant business community, individuals and organisations to listen and identify obstacles, as well as promptly remove them. They will research and propose initiatives and solutions to promote administrative procedure reform, strengthening administrative discipline.

Also, last week, the PM signed the key administrative procedure reform plan for the last months of 2023, demanding the speedy implementation of approved plans on reducing and simplifying business regulations, administrative procedures, and citizenship papers.

Specifically, 126 administrative procedures, groups of administrative procedures and citizen papers related to population management under the responsibility of 16 ministries and agencies; 402 business regulations under the responsibility of nine ministries and agencies should be simplified. And also, over 110 administrative procedures under the responsibility of 17 ministries and agencies are required to be fully decentralised.

In addition, the prime minister have also asked agencies to review and report on the plan to simplify 13 key groups of regulations and administrative procedures and submit approval of the plan.

I hope all this will create more support and tools to promote faster and more far-reaching reforms in this country. The quicker the reforms are carried out, the faster the economy will recover.

Decoding factors affecting Vietnam's economic recovery At the first panel discussion of the Vietnam Wealth Advisor Summit (VWAS) 2023, experts decoded the factors affecting the recovery of Vietnam's economy.

Headwinds weakening Vietnam’s economic recovery Vietnam’s GDP growth was only 3.32 per cent in the first quarter compared to the same quarter of the previous year. Growth accelerated in the second quarter but only to 4.14 per cent – very far from the rapid pace of 7-8 per cent annually before 2020.