With a different position from previously, Vietnam needs more comprehensive strategies

Vietnam’s position has grown different from previously, triggering the need to transform the economy towards creative innovation, focusing on human capital, developing infrastructure and livelihoods for the people, improving productivity, inclusive development, and building a self-reliant economy in which all the people benefit from the development process.

Minister of Planning and Investment Nguyen Chi Dung.
Minister of Planning and Investment Nguyen Chi Dung.

This September 19, the Vietnam Reform and Development Forum (VRDF) 2019 will be held in Hanoi under the theme “Vietnam: Desire for Prosperity – Priorities and Actions”. On the occasion, Minister of Planning and Investment Nguyen Chi Dung granted the Vietnam Government Portal (VGP) an interview concerning the event.

Q: What are the new points of VRDF 2019 compared to the previous forum?

A: Compared to the 2018 event, VRDF 2019 is organised earlier with the aim of collecting comments from reputable domestic and international experts, functioning as a channel providing important input contributions for the research and development of the socio-economic development strategy during 2020-2021, as well as orientations and tasks for the five-year socio-economic development plan between 2021-2025.

The difference is that Vietnam now has a different position from previously, with its stature, position and reputation in the international arena having been gradually enhanced and winning recognition and high appreciation from the international community. The biggest achievement of more than 30 years of Doi Moi (Renewal) is that it has completely transformed the face of Vietnam’s economy, reflected through improvements in the people’s lives and a sharp decline in the poverty rate. Vietnam has become a middle-income country with increasingly extensive integration into the world economy.

International organizstions and prestigious economic experts around the world share the view that Vietnam’s development is in line with the world’s development trend. With the globally recognised results, Vietnam is not only in a position of learning but also in a position of sharing development experiences.

The context of the forum also sees changes, as the uncertainty of the world economy is increasing. Meanwhile, Vietnam is about to end its third 10-year socio-economic development strategy (2011-2020) to enter a new decade and era with many new development opportunities, accompanied by many big challenges. Therefore, it is necessary to observe major global trends over the long term and anticipate the impacts on Vietnam, although it is increasingly difficult to forecast.

Q: In the new changing context, how should Vietnam reform and transform the growth model in the near future?

A: Many studies suggest that the world economy is slowing down in the next 10 years. This is an irreversible trend because of its historical cycle. The conspicuous signs are the decelerating global GDP growth, global trade slowdown at three times the rate of global GDP, and the declining FDI attraction. However, deceleration is not always detrimental. By behaving wisely, Vietnam will be less affected by the deceleration. The current period requires Vietnam to take advantage of opportunities and make more drastic restructuring and reforms.

According to the United Nations Development Programme (UNDP), the world is in a state of emergency on climate change and will have to exert double efforts in the next 2-3 years to achieve the gas emission reduction targets. Vietnam is one of the 10 countries most seriously affected by national climate change with unpredictable scenarios, and is likely to lose 2.5% to 4% of GDP. I myself and each of us can’t sit still to witness the issues, such as flooding in the central region, the lack of fresh water in the south central region and saline intrusion in the Mekong Delta.

Experts from Harvard University emphasised the view that at the moment, Vietnam should have clear policies to attract high-quality human resources back to the country. According to Professor Thomas Valley of Harvard Kennedy School, good students are Vietnam’s gold mines. Regarding human capital, they stated that it is necessary to invest in education and that education should focus on training creative skills and social emotions, which are missing in our current educational system.

The leaders of the Vietnamese Government have soon realised the problem and have taken organised steps, including supporting the establishment of the National Innovation Centre, attracting human resources, accumulating good experience, drawing out the best institutional models and taking advantage of opportunities to promote science & technology and innovation. However, to attract more human resources, it is still necessary to mobilise non-state financial resources from businesses to inspire, encourage and attract talents to contribute directly to the country.

Q: Through the recommendations for Vietnam, what motivation do you think is considered a breakthrough for development - technology, human capital, cultural tradition, or a combination of all these factors?

A: Professor Michael Porter, who tops the list of 50 most influential management minds in the world and one of the most prominent Harvard professors, has shared with us directly about the new approach to national competitiveness. According to him, the approach to competitiveness needs to be examined from a new aspect. Competitiveness is not to lower wages or to reduce costs based on cheap labour. Also, it is not only the creation of many jobs on a large scale. Competitiveness needs to be understood from the following two perspectives.

Firstly, from a macro perspective, competitiveness is the transparency of tax and monetary policy, public institutions, and human and social development.

Secondly, from a micro perspective, enterprises and the business environment surrounding them are the cores. In competition, we should not only attach importance to economics, but also need to harmonise it with social issues. These are considered the two factors that need to be balanced for mutual benefits, not just favouring either single side.

According to the UNDP data, Vietnam only spends 0.19% of GDP for development research, compared to 2% of GDP in China, 3% in Japan, and over 3% in the United States. Currently, the materials-based global trade is shifting towards the information and data trade. Obviously, this directly affects productivity. The problem is if we accept risks for the deployment and application of new technologies, creative innovations and new business models?

Through the aforementioned examples, I would like to say that we need to listen to the comments to address the shortcomings in policies and relevant issues.

Q: What do you expect of the outcomes of VRDF 2019?

A: Ahead of the forum, a number of recommendations have been sent to us mainly stressing the need for Vietnam to have more comprehensive strategies than traditional ones. It is necessary to transform the economy towards creative innovation, focusing on human capital, developing infrastructure and livelihoods for the people, improving productivity, inclusive development, and building a self-reliant economy in which all the people benefit from the development process.

VRDF 2019 is the succession and development of the previous forums, which explains why its theme and contents are more inclusive. It covers a larger scale, including renovating institutions of the market economy, creative innovation to overcome the middle-income trap in the era of Industry 4.0, and priorities and actions for a prosperous Viet Nam.

Unlike the previous events, VRDF 2019 will have strong interaction between keynote speakers and panelists with delegates in attendance.

I expect that participants will openly and frankly discuss the country’s innovation, reform and development issues in line with the thought of the socialist-oriented market economy and sustainable development, through short- and long-term solutions and specific actions. Experts also have specific data on Vietnam as well as independent empirical and scientific studies (without relations to Vietnam’s statistics), from which they could share relevant international and domestic experiences. The discussion results will be an important input channel for the development of the contents of the national socio-economic development strategies for the next five and ten years.

Thank you very much!