Escaping the middle income trap is a major challenge for emerging economies, including Vietnam, not to mention materializing the desire for prosperity, according to Minister of Planning and Investment Nguyen Chi Dung.
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According to Dung, along with global development trends, Vietnam has adopted economic development strategy towards innovation and applying technological advancements from the Fourth Industrial Revolution in socio-economic sectors and state governance.
However, with the country’s status of a low-middle income country, a number of challenges remain, including low productivity and national competitiveness, Dung stated.
Vietnam targets to have an economy operating on the market mechanism, but there are flaws required to be addressed to boost efficiency in resources utilization and ensuring sustainable development.
“The world we are living in is moving at a rapid rate with growing uncertainties and complexity, resulting in fiercer global economic and trade competition,” Dung added.
It is, therefore, essential for Vietnam to grasp opportunities and overcome challenges, or risking being left behind in the race towards prosperity.
Dung raised questions over the subject, the first one is which priority should Vietnam choose to focus on, and the second one is how should Vietnam act, given the limited resources available.
Ousmane Dione, World Bank’s director in Vietnam, added there are two significant reforms for Vietnam and contribute to the country’s development in the next decade.
The first reform is to find a weak point in current growth model, which still relies on the accumulation of factors and with limited support to higher productivity.
The second one is related to market regulation. In spite of Vietnam’s impressive achievements during the process of economic transition, the country has not created a market regulation system with efficiency and validity.
This is considered one of the main barriers restricting healthy development of the private sector and fair competition among economic groups, Dione added.
Over the past few years, Vietnam has consistently been among the group of the world’s fastest growing economies, reaching an average GDP growth of 6.2% in the 2011 – 2018 period.
As of 2018, Vietnam’s GDP reached over US$250 billion, joining the world’s top 45 largest economies in terms of GDP, while the GDP per capital stood at nearly US$2,600.
Additionally, newly registered FDI has been growing steadily, standing at over US$200 billion in the 2011 – 2018 period.
Vietnam is one of countries having the highest rate of economic openness, as its trade to GDP ratio reaching nearly 200% in 2018.
