The importance of restructuring the economy from primarily agrarian to one centred on industry and services was highlighted at a meeting held in HCM City yesterday.
Vietnam's accession to the World Trade Organisation (WTO) has been positive for the economy but it also poses big challenges, Tran Dinh Thien, director of the Vietnam Economics Institute, said.
After joining the global trade body in 2007, foreign direct investment into the country rose dramatically as did exports, he said.
But the WTO accession has also revealed the weaknesses of the economy, including low quality of growth, poor infrastructure, high inflation, poor human resources, and low competitiveness, he said.
The quality of human-resources has yet to meet the need of development and co-ordination between businesses to achieve a combined strength remains poor, he added.
Nguyen Dinh Cung, deputy director of the Central Institute of Economic Management, said: "We need to restructure our economic mechanism."
Economic growth in recent years has been mainly due to the transformation from agriculture to industry-services, while productivity has barely increased, he explained.
With its weak economic structure, the country will find it very hard to become a modern economy by 2020, he added.
Tran Du Lich, deputy head of the HCM City National Assembly delegation, said the problem faced by the Vietnamese economy was not a shortage of capital but how to effectively absorb it.
"Our economy rests on three weak pillars - weak economic institutions, poor human resources, and poor infrastructure – that do not ensure stability for absorbing capital in the most effective way and developing in a sustainable manner," he said.
The country needs measures to strengthen these pillars, he said.
A programme to support economic restructuring in HCM City has yielded results in the last three years but progress remained slow, he said.
In restructuring the economy, the city should focus on improving its quality and urban infrastructure, he said.
It should create a level playing field for all business sectors, continue with administrative reform, improve human-resource training, and develop infrastructure, he said.
The government should stabilise the macro economy to retain the people's and market's trust and improve the effectiveness of public investment and the role of State-owned groups, he said.
But the country had yet to assess the impact of Vietnam's accession to the WTO, a task that required great skill, he said.
With tariffs cut in line with Vietnam's WTO commitments and a lack of technical barriers, a huge volume of imports have entered the country, causing difficulties for local producers.
The country should therefore adopt measures to safeguard local producers from imports, Lich added.
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