Vietnam slipped four places in this year’s Global Competitiveness Report, highlighting the problems in its economy, but it should not be case for too much pessimism, economists told Thanh Nien Thursday.
The annual report assesses the ability of countries to create high levels of prosperity for their citizens, which depends on how productively they use available resources.
World Bank country director Ajay Chhibber said Vietnam could have scored low in improvement of productivity and market economy structure.
The country also lacked the capacity to produce high-value goods, he added.
The government should, therefore, try to overcome institutional problems and beef up its anti-corruption fight.
Dr. Vo Tri Thanh, a senior scholar at the Central Economic Management Study Institute, said the WEF ranking showed that businesses’ expectations with regard to the investment environment and administrative reforms were not fully met.
The Global Competitiveness Index measures the set of institutions, policies, and factors that contribute to creating sustainable economic prosperity.
The 2007-2008 report covers a record 131 major and emerging economies.
Three out of six new entrants placed higher than Vietnam though, according to Thanh, the country actually improved on all the indices.
“We can’t say Vietnam’s competitiveness has weakened.” However, in a fierce race, “other countries have outrun us.”
Tran Du Lich, head of the Ho Chi Minh City Economics Institute, said the ranking was relative and should not be too discouraging.
“Every ranking organisation has its own criteria; if they are the same as ours, we’ll rank high, and vice versa.”
According to a similar World Bank report recently, Vietnam’s ranking had actually improved, he said.
Lich pointed out three issues that needed to be addressed to increase business competitiveness, two of which were “especially important” and would take a lot of money and time to improve.
“In order to reduce costs, the traffic infrastructure and human resources must be good. [Improving] administrative procedures is also important, but only at the beginning [of business operations].”
Chhibber told Thanh Nien that the World Bank could support the government in improving the institutional system and developing the infrastructure and resources to maintain competitiveness.
The US leads the Global Competitiveness Report, followed by Switzerland, Denmark, Sweden, Germany, Finland and Singapore in that order.
The rankings were done using both publicly available data and the Executive Opinion Survey a comprehensive annual survey conducted by the WEF together with its net-work of Partner Institutes in the economies covered by the report.
This year, more than 11,000 business leaders were polled.