Economists fear Vietnam will get old before it gets rich

03-Jan-2019 Intellasia | Vietnamnet | 6:00 AM Print This Post

Vietnam needs to take action promptly, and if not, it may get old before it becomes rich, economists say.

Prime minister Nguyen Xuan Phuc recently met with the prime ministerial Economic Advisory Group to listen to ideas about priority tasks for Vietnam to carry out to avoid the middle-income trap, cheap labour force, outsourcing and polluted environment.

Members of the advisory group said that the potential of the economy is great, while new opportunities are coming up. If Vietnam can take full advantage of new opportunities, maintaining high economic growth rates in the next two years is within reach.

Three scenarios for economic performance have been predicted for 2019. With Scenario 1, under the normal conditions of the economy, the GDP would grow by 6.86 percent per annum in 2018-2020. With Scenario 2, the figure is 6.91 percent and Scenario 3, 7.06 percent.

The economists believe that in 2019, the GDP growth rate may reach 6.9 or 7 percent, while the inflation rate would be curbed at below 4 percent.

To obtain these goals, processing and manufacturing industries and the service sector must gain higher growth rates than 2018 and be the two major driving forces of the national economy.

The advisory group recommended implementing policies and solutions to solve four big problems: obstacles in implementing huge projects; hindrances in developing the private economic sector; difficulties that enterprises investing in agriculture are meeting; and clearing of obstacles to be able to exploit society’s resources.

They estimated that the investment capital of the private sector in 2019-2020 needs to be as high as 15 percent of GDP to reach the GDP growth rate target. The potential of the sector is great but still not fully exploited.

The advisory group said that it was necessary to change the allocating of tasks to government agencies. One task should be assigned to one agency and one division in the agency, and preferably to one individual.

Prof Vu Minh Khuong from Lee Kwan Yew Public Policy School emphasized that it is necessary to take action quickly and decisively, or Vietnamese will get old before it gets rich.

Prime minister Nguyen Xuan Phuc has assigned the advisory group to cooperate with Singapore to build a Singaporean-style innovation centre. The Ministries of Planning and Investment (MPI) and Information & Communication (MIC) will join forces with the group to carry out the task.


Category: Economy, Vietnam

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