Economic growth must serve the people: Deputy PM Hue

Wednesday, 2017-11-15 17:22:59
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Key speakers at the conference. (Credit: VGP)
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NDO – It is necessary to mobilise the participation of the people in the cause of innovation and socio-economic development to ensure its success, meanwhile, if the fruits of growth are not shared among all classes, the growth will not be sustainable, Deputy Prime Minister Vuong Dinh Hue has said.

The senior government official was speaking during a conference on Vietnam’s economic situation hosted by the Vietnam Academy of Social Sciences (VASS) in Hanoi, on November 15. Entitled "Growth motives and solutions for promotion," the event gathered over 100 scientists, managers and economists from enterprises, banks and international organisations.

Addressing the workshop, Deputy PM Hue emphasised that in addition to developing the country on the basis of macroeconomic stability and international economic integration, Vietnam needs to deploy a comprehensive and inclusive growth policy for its people.

He affirmed that rapid and sustainable development is the key policy stated in the document of the 12th National Party Congress and is the order of life to shorten the development gap with other countries in the world. Therefore, Vietnam must grow faster and develop sustainably. Accordingly, rapid and sustainable growth should be based on macroeconomic stability and international economic integration and vice versa, meaning rapid and sustainable growth will enhance macroeconomic stability and international integration.

The deputy PM expressed his wish that the delegates at the event clarify what the growth engine of Vietnam is, assess Vietnam's business environment and national competitiveness from an enterprise's perspective, and what the country should do in order to boost national capacity, as well as tackling the imbalance in the economy due to the uneven development and limited connection between the foreign investment and domestic sectors.

Deputy PM Vuong Dinh Hue speaks at the conference. (Credit: VGP)

According to Prof., Dr. Nguyen Quang Thuan, Head of the VASS, Vietnam’s economy has achieved almost half of the 2016-2020 socio-economic development plan. In 2017, the economy has witnessed certain positive changes, including a sharp increase in private sector investment, which is expected to increase by 16% in 2017 compared to 10% in 2016.

The results of the research on increasing labour productivity and economic efficiency are in line with the shift allocation of resources from the State sector to the non-State economic sector. This is rooted in policies to improve the business environment, reduce administrative procedures and reduce costs for businesses from the State, considering the private economy as an important driving force of the economy.

Dr. Nguyen Dinh Cung, Director of the Central Institute for Economic Management, affirmed that in the past two years, the Government has made great efforts to improve the business environment, with the Ministry of Industry and Trade recently proposing to abolish 50% of all business conditions, the Ministry of Agriculture and Rural Development is expected to cut 34%, while other ministries have also developed similar plans.

As a result, the business environment and national competitiveness of Vietnam have been improved in terms of scores and ratings. Vietnam is currently ranked 4th in the business environment in ASEAN, but is still far behind the top three of Singapore, Malaysia and Thailand.

Assoc. Prof., Dr. Tran Dinh Thien, Director of Vietnam Institute of Economics, proposed that in the next three years, in order to create new momentum for growth, it is crucial to focus on the long-term fundamental issues that are the mechanisms and institutions based on integration commitments and the fourth Industrial Revolution.

Dr. Cung urged for continuing to use global standards and international best practices for reform, considering fair market competition as the main driving force for the increased effective use of resources. Specifically, he suggested that the government set a target of climbing 14-18 steps in business environment improvement in 2018, while putting more forceful pressure on the ministries to remove business conditions and specialised inspection for import and export goods.

Sebastian Eckardt, the World Bank's lead economist for Vietnam, stressed that the Vietnamese economy is in a good position, with high growth combined with low inflation, economic balance in terms of foreign exchange and stable exchange rate. Vietnam is also moving faster than other competitors in terms of competitiveness and its business environment, he added.

Vietnam needs to take advantage of its rising cycle to boost its macroeconomic strength, Sebastian Eckardt suggested, adding that fiscal stimulus and credit growth are costly and do not have much room to grow, therefore, focus should be paid on quality and sustainability rather than growth, specifically, consolidating fiscal sustainability, continuing to improve the business environment, creating a level playing field for the private sector, reforming SOEs, and increasing investment in human resources and innovation.