Vietnam 2035 Report advises full commitment

The Vietnam 2035 report covers recommendations for the country to reach an upper-middle-income status within two decades. Which recommendations impress you the most?

This report was compiled based on a thorough analysis of Vietnam’s potentials and opportunities over the next 20 years, and the country’s achievement of deeper international integration via its participation in various free trade agreements (FTAs). Benefiting from these agreements, Vietnam will have more leverage to speed up industrialisation.

In the report, experts optimistically forecast that in order to become an upper-middle-income nation, Vietnam will have to produce an annual growth of at least 7 per cent, raising the average income to over $7,000 ($18,000 after purchasing power parity adjustment) by 2035, from the $2,052 ($5,370 after PPP adjustment) in 2014.

I think that Vietnam has what it takes to do this and even boot it with an additional per cent of annual growth, as well as realise its industrialisation and modernisation ambitions successfully.

However, in order to reach this target, Vietnam would have to continue bolstering its Doi moi policy reforms more vehemently. We have done a good job in introducing economic reforms. But if we stop short now, we will surely miss opportunities.

The key message of the report’s recommendations is for Vietnam to boost the construction and implementation of a market mechanism. In this market, all relations and resource allocations must be conducted in a transparent and regulated environment.

Over the past decades, the state has been performing as a regulator, a producer, and a trader. Thus, it is extremely important now to separate its regulatory and commercial activities by transforming its role in the economy from producer to effective regulator and facilitator.

The Vietnam 2035 recommendations are quite appropriate to Vietnam’s needs and the country’s leadership must have a thorough study of them.

Investing into institutional reforms is the most cost-efficient avenue to Vietnam’s ambitions. In addition, we would need to materialise the 12th National Party Congress’s spirit and continue reforming our economic institutions in tandem with effectively renewing the administrative apparatus, public financial policies, and investments.

It is of particular importance to enhance the role of private enterprises. Building a strong base of local private enterprises must be considered a priority. A nation’s internal strength is extremely important and is a key to higher economic growth.

To this end, it is necessary to review all policies and laws so as to build an effective market mechanism. A modern market must be erected, with the effective use of opportunities brought about by international integration, such as the import tariff reductions from FTA member states, in order to increase exports.

Additionally, all policies allocating national resources must bear in mind the benefit of all people, not only select groups. Otherwise, economic inequality (also known as the gap between the rich and the poor, income inequality, wealth disparity, or wealth and income differences) will expand even wider.

How can these recommendations be realised? Does the report see many obstacles in Vietnam?

To be precise, there is a web of many intertwined and vexed interests in Vietnam, which the report claims must be removed. If we fail, economic inequality will grow and further impede the country’s development. This will go against the principle of sustainable development.

I would like to stress that a multitude of policies will have to be adjusted, so that the report’s recommendations can be materialised. For instance, the current framework of citizens’ rights to own assets and land need to be revised.

One of the noteworthy recommendations suggests that Vietnam remove the commercialisation of state institutions in economic activities. What are your views on this issue?

As a matter of fact, over the past many years, the state has been strongly and directly engaged in economic activities through state-owned enterprises (SOEs), particularly through large state economic groups, and indirectly through close linkages between the state and an exclusive segment of the domestic private sector.

However, the scene has moved on by now, meaning that we must renew the role of the state. The state has become a producer and trader, but what it currently needs to do is become a regulator and facilitator. It should support private enterprises in human resources training and the application of new technologies. The state should only engage where private enterprises cannot or do not want to.

Under the Law on Management and Use of State Capital Invested in Production and Business at Enterprises, the state shall make investments in four sectorial groups, namely public goods and services, security, key telecommunications and satellites related to national interests, and sectors unattractive to private enterprises.

However, I would advise caution and patience—let us wait and see how this law will be implemented.

The World Bank and various international organisations proposed Vietnam need strong political commitment to implement the report’s recommendations. What do you think of this?

In my opinion, political commitment in this case means the country’s enactment of laws. For example, we recently amended the Civil Code, highlighting the issue of citizens’ rights to own assets. Also, we revised the Code of Criminal Procedure, acknowledging the right to silence.

That is political commitment, which is reflected in legislation. However, international organisations have proposed that Vietnam make stronger political commitment. It is likely that they require Vietnam to further clarify land and asset ownership rights, because such rights remain unclear for now.

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