Overcoming all difficulties, Vietnam has made remarkable, historic achievements in socioeconomic development, enhancing the country’s standing and reputation and creating new opportunities and favorable conditions for transformation in line with the goals set by the 13th National Party Congress: to become a developing country with modern industry and upper-middle income by 2030, and a developed, high-income country by 2045.

The capital, Hanoi. (Photo: DUY LINH)

Three “Hurdles” to Becoming a Dragon

At the policy dialogue seminar “Vietnam’s 30 Years of Development: Looking Back at the Past and Responding to New Challenges,” jointly organized by National Economics University (NEU) and Japan’s National Graduate Institute for Policy Studies, Prof. Dr. Pham Hong Chuong, President of NEU, observed that over more than three decades, Vietnam has undergone a profound transformation from a centrally planned economy to a highly open, export-oriented, market-oriented economy, and from a low-income, agriculture-based economy to a middle-income economy.

Building on this success, the Party and the Government have set the goal of making Vietnam an upper-middle-income developing country by 2030 and a high-income developed country by 2045. To achieve this goal, the economy will need to grow at an average annual rate of 7% over the next 20 years.

Many economic researchers broadly agree that Vietnam’s growth in recent years has largely resulted from well-timed liberalization, advantages in geographical location, abundant resources and a plentiful labor supply… Looking back on Vietnam’s more than 30 years of Doi Moi (Renovation), Prof. Dr. Ngo Thang Loi of NEU observed that the economy had overcome two major “hurdles”: ensuring food security; and moving beyond the lower-middle-income level and laying the foundations for an industrialized country. However, Vietnam has yet to clear the third “hurdle”: becoming an industrialized country by 2020.

Prof. Tran Van Tho of Waseda University, Japan, also observed that Vietnam has not experienced a period of high growth—averaging 10% annually for more than 10 consecutive years—because its industrial sector has not been strong enough to drive a major transformation. The economy’s level of industrialization remains relatively low compared with East Asian countries at the same stage of their demographic dividend.

The professor identified these limitations while also reviewing Vietnam’s major achievements over the past 30 years, including successful economic restructuring, foreign investment attraction, successful trade policies and the rise of several highly competitive enterprises such as VinGroup, Viettel and FPT…

Rapid Growth Coupled with Quality

According to economic experts, 2024-2030 is a decisive period for Vietnam to transform itself in line with the Socioeconomic Development Strategy for 2021-2030, sustain rapid and sustainable growth, and gradually join the ranks of high-income countries. This is an important milestone that opens up many development opportunities for Vietnam’s economy, particularly under the influence of globalization, international economic integration and the Fourth Industrial Revolution.

Prof. Dr. Ngo Thang Loi argued that achieving the stated goals requires Vietnam to grow rapidly while ensuring the quality of growth. This calls for a balanced development model that maximizes growth’s positive impact on social progress. The solution for Vietnam’s economy in the years ahead is to prioritize growth in key growth regions and connect these economic growth regions with other regions, especially less developed ones, so that they can participate directly in generating income.

Rapid growth also requires contributions from the business sector. Enterprises therefore need support to grow stronger through measures that create a level playing field for all three types of enterprises: state-owned enterprises, private enterprises and foreign-invested enterprises.

This includes giving greater attention to policies for the private sector and emphasizing the role of leading enterprises. Global experience shows that countries can achieve middle-income status through liberalization, privatization and international integration, but reaching higher income levels requires policies that stimulate private-sector dynamism.

Meanwhile, Prof. Tran Van Tho recommended that Vietnam develop and implement five policies to become a high-income country: accelerate structural transformation to increase productivity; formalize the informal sector and increase enterprise size to boost capital accumulation; reform and develop factor markets to allocate resources more efficiently; provide skilled labor and encourage research and development to promote structural transformation; and strengthen innovation capacity.

Emphasizing the need to raise productivity, Prof. Tran Van Tho argued that productivity gains must be driven by technology and institutional reform. Vietnam’s advantage in low-cost labor will come to an end, and sustained increases in labor productivity are the key to escaping the middle-income trap. Over roughly the next decade, expanding industrialization, restructuring industry and reforming institutions to allocate resources efficiently will be the drivers of productivity growth in Vietnam. At the same time, the country needs to prepare for an era of innovation-driven growth in the 2030s and beyond.

PHUONG ANH/According to Nhan Dan Newspaper

Link: https://nhandan.vn/thoi-co-de-viet-nam-buoc-vao-nhom-cac-nuoc-thu-nhap-cao-post798166.html

This is an automated translation. If you notice any errors, please contact the Department of Communications, National Economics University at phongtruyenthong@neu.edu.vn.