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Vietnam Development Forum focuses on productivity improvement

Tu Giang
Thursday,  Dec 14,2017,19:42 (GMT+7)
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Vietnam Development Forum focuses on productivity improvement

Tu Giang

HANOI - The Vietnam Development Forum (VDF) themed “Increasing Productivity - Leverage for Sustainable Development” was opened in Hanoi on December 13, with many experts pointing out that economic growth has been hampered by low productivity.

Jointly held by the Ministry of Planning and Investment, the World Bank, and the International Finance Corporation (IFC), VDF focuses on solutions for productivity improvement and industrial development in the context of the fourth industrial revolution, private sector development and promotion of integration.

Vietnam has achieved significant achievements this year, with economic growth estimated at 6.7%. All 13 socio-economic targets assigned by the National Assembly have been met.

However, Minister of Planning and Investment Nguyen Chi Dung said Vietnam’s economic development has mainly depended on foreign investment, cheap labor and natural resources. Economic growth has so far been largely investment-driven, he noted.

“The reliance on these factors will not help achieve sustainable development and is no longer suitable in the context of the fourth industrial revolution,” Dung said.

To boost economic growth, increase income per capita and catch up with other countries, Dung suggested Vietnam improve labor productivity, which is considered the key to sustainable development.

According to Nguyen Dinh Cung, president of the Central Institute for Economic Management, Vietnam’s economic growth has slowed down gradually over the years, from an average of 7.3% in 1990-2000 to 6.7% in 2001-2010 and 5.96% in 2011-2016.

Cung said if Vietnam maintains the average economic growth rate of 6% a year, it would take nearly 20 years and more than 10 years for the country to catch up with Malaysia and Thailand in 2010 respectively.

Kenichi Ohno, Professor of Economics at the Tokyo-based National Graduate Institute for Policy Studies (GRIPS), said the Government should improve its policies to facilitate the development of the private sector, improve labor productivity, and promote public-private partnership.

Long-term vision, proper targets, healthy investment environment and business incentives are factors that the country should focus on to move toward a higher value-added economy.

Addressing the forum, Prime Minister Nguyen Xuan Phuc said productivity improvement will play a key role in gross domestic product (GDP) growth but it will prove to be a big challenge for Vietnam. Therefore, the country will need more support and advice from its partners, the business community, and foreign and domestic specialists.

He proposed five measures to improve productivity and create leverage for sustainable development in the future.

Firstly, the country shall reform the banking system, increase access to credits and loans for small and medium enterprises, farmers and ethnic minorities, and reform land policies.

The Government will encourage businesses to invest in education and training to improve labor skills. 
In addition, the country will manage to raise the Total-Factor Productivity (TFP) by investing in science, advanced technology, research and development, and infrastructure. It should also accelerate the State apparatus reform, improve the business environment, and encourage entrepreneurship and innovation among people.

The country should make the most of free trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP) and the Vietnam-EU Free Trade Agreement (EVFTA).

Last but not least, the Government will consistently maintain socio-economic sustainability, stabilize the macro-economy, fight corruption and realize 17 sustainable development goals of the United Nations.

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