Passing the baton to private sector

Private sector development should be encouraged to play a key role in the economy

The global economy is unpredictable

At a seminar on Vietnam’s economic prospects organised yesterday in Hanoi, Tran Toan Thang, head of the World Economic Board under the National Centre of Socioeeconomic Information and Forecast (NCSIF), said that based on the impacts of events around the world, it is difficult to exactly forecast the movements of the world economy, particularly when it is affected by figures like Donald Trump, who is fickle like the weather.

However, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and other free trade agreements (FTAs) will positively impact economies and foreign direct investment (FDI) flows will recover, and especially increase in Asian countries. FDI from ASEAN countries is also expected to increase.

Regarding the Vietnamese economy, Dang Duc Anh, director of Analysis and Forecasts Department under the NCSIF said that based on the 6.7 per cent growth in 2018, the Vietnamese economy can continue to benefit in 2019 from a more stable macroeconomic environment and the belief in reinforcing the business investment environment.

Meanwhile, NCSIF’s vice director Luong Van Khoi said that over the past few months, we were very worried about the situation of the national economy, but the latest result has shown positive prospects. “With the impact of the US-China trade war, FDI flows may move from China to Vietnam,” he said.

Private sector as a key driver

At the seminar, the story of Thai Beverage and Sabeco were mentioned repeatedly. Through this, Duc Anh showed three major drives for economic growth in 2019-2020, including private sector development, institutional reform, and improvements in technology and labour productivity.

Emphasising the important role of the private sector, economic expert Luu Bich Ho said that Vietnam should refocus from FDI to domestic enterprises. He proposed that the government should focus on the foundations of growth such as education, security, business environment, management, and the natural environment.

Talking with VIR about the market for Vietnam’s private sector development, Khoi said, “At the moment, most industries are dominated by foreign-invested enterprises. Therefore, the Vietnamese private sector should find potential industries that they can build their own chains in the context of the Fourth Industrial Revolution.”

He also added that the government can support the private sector to buy the best technology to develop the industries where they have strengths so that they can become a giant in the field. If so, the Vietnamese economy can reduce its dependence on foreign enterprises.