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Thursday, October 18 2018
Tiếng Việt
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Date 14/12/2017-15:13:00 PM
Leveraging Productivity Growth for Sustainable Development
(MPI) – On December 13th 2017, Ministry of Planning and Investment in collaboration with World Bank (WB) held Vietnam Development Forum 2017 (VDF) in Hanoi with topic: Leveraging Productivity Growth for Sustainable Development. At the Forum, delegates focused discussion on the issues: “Productivity Growth: Global Trends and Vietnam challenges” and “Unlocking Vietnam’s Productivity Growth for Sustainable Development”. Prime Minister Nguyen Xuan Phuc attended and had a speech at the Forum.

The minister of MPI Nguyen Chi Dungopening remarks at the Forum.Photo: Duc Trung (MPI)

Speaking at the Forum, the minister Nguyen Chi Dung said that 2017 is the year that Vietnam has achieved many successes, the biggest success is that after many years all 13 socio-economic development targets assigned by the National Assembly have reached and exceeded expectation. The economy is well growing; the GDP growth rate is about 6.7%. But that is just one aspect. In the National Assembly forum, at the last session, many delegates were very interested in the issue of quality of growth. One of the key determinants of quality as well as improvement of growth is productivity.

Recognizing the importance of productivity increase, the Government of Vietnam has been trying to implement a series of measures to promote innovation, creativity and application of science and technology in order to improve productivity, quantity, efficiency and competitiveness of the economy. The socio-economic development plan for 2018, which was reported by the Government at the Fourth Session of the 14th National Assembly, emphasized "improving productivity, quality, efficiency and competitiveness; encouraging innovation and business start-up". At the same time, the Government will also direct and manage the implementation of the Socio-Economic Development Plan 2018 in the spirit of strongly promoting the achievements and overcoming the limitations and shortcomings of 2017; Strengthening discipline, improving integrity; taking advantage of all occasions, utilizing opportunities; promoting innovation, creativity; creating a high consensus of the entire system, taking drastic action towards fast and sustainable development.

However, increasing productivity is a challenge for Vietnam. The Government needs the support and consultation of development partners, the business community, national and international experts to find appropriate policy solutions to achieve that objective.

World Bank Country Director in Vietnam Mr Ousmane Dione speaking at the Forum.
Photo: Duc Trung (MPI)

Speaking at the Forum, World Bank Country Director in Vietnam Mr Ousmane Dione highly appreciated the topic of the VDF 2017, increased productivity is an issue of crucial importance for Vietnam medium term development prospects, helping Vietnam to achieve its goals of becoming upper middle income country by 2035. Mr Ousmane Dione congratulated to the government of Vietnam on several important achievements of 2017 such as macroeconomic stability, low inflation, a relatively stable exchange rate and a strengthening external position…Especially, he congratulated to the government for achieving an improvement of 14 rank in the WBG Doing Business ranking and hoped that Vietnam keep this positive momentum for continued macroeconomic stability and sustainable development.

Mr Ousmane Dione evaluated that Vietnam has many ample rooms to improve productivity. First, this could include enhancing energy use efficiency and applying technology in agriculture to improve quality. Besides, effective linkages between domestic and FDI firms are also critical for Vietnam to move up in global value chains, and improve its productivity.

Second, reforms to develop and enhance effective market institutions will need to be significantly stepped up to achieve higher productivity growth. This includes continued effort in improving business environment with focus on simplifying administrative procedures and reducing cost burden. But it also means fostering more effective markets to improve resource allocation. This is an important issue for Vietnam to adopt more market based approaches to allocate productive resources in both capital and land markets more efficiently ensuring resources to be used for the most effective purposes.

Third, Vietnam needs to strengthen its policies on competition and ensure a level playing field for all economic partners, attach much importance to education, skill and innovation in the country’s quest for productivity growth. Vietnam has done well in basic education. But a new set of knowledge and skills are needed to contribute to productivity growth. Vietnam's economy is integrating into the global economy, in industry and manufacturing, as well as agriculture and services… Along with these, it should continue to rise and have further improvements in the domestic private sector. There should be better institutions for labor market, better tertiary education institutions, higher skills and qualifications for employees, creating an effective institutional and incentive framework for future sustainable productivity growth.

Fourth, the question is how Vietnam will mobilize and use its scarce public resources efficiently to finance its ambitious development agenda over the next five years. When concessional development assistance is phasing out, Vietnam need to increasingly rely on mobilizing domestic resources, improving domestic revenue mobilization, enhancing expenditure efficiency and debt management capacity, establishing an effective domestic debt market, which plays an important role to ensure that development objectives can be achieved without raising debt to unsustainable levels, strengthen efforts to create an enabling environment for private sector participation in quality infrastructure development, a critical contribution to Vietnam’s needed productivity growth. WB looks forward to a new and comprehensive Law on Public-Private Partnership that will address many current challenges. ODA resources will need to be used more strategically and effectively to complement domestic public resources, and leverage mobilization of domestic private resources.

Panorama of the Forum. Photo: Duc Trung (MPI)

At the Forum, in Session 1: Productivity Growth: Global Trends and Vietnam challenges, development partners commented on the trends and challenges to Vietnam's productivity by analyzing the downward/upward trends in productivity as well as contribution to GDP growth, considered the main resources that affect productivity growth including restructuring, links with FDI/networks, renovation of state-owned enterprises, private enterprises, small and medium enterprises and some main trends in agricultural productivity, service and production, institutional clarity and state program on effectiveness.

In Session 2: Unlocking Vietnam’s Productivity Growth for Sustainable Development, development partners shared how to harmonize supply and demand for skills and how to innovate in enterprises to help Vietnam raise its position in the value chain. Speeches also provided some recommendations for Vietnam to utilize the technology, better connect with FDI and global networks, as well as promote international trade to enhance competitiveness and increase productivity. The Vietnamese government agencies had feedbacks on policy issues for specific sectors to help address Vietnam's productivity challenges.

The PM Nguyen Xuan Phuc speaking at the Forum. Photo: Duc Trung (MPI)

Speaking at the Forum, the PM Nguyen Xuan Phuc raised some requests to continue increasing productivity, leveraging sustainable development in the upcoming time. First, the government must strive to create a comprehensive competitive environment in three dimensions: synchronously develop all kinds of markets; increase the scale and level of market competition; ensure fair and equitable competition. Competition must really become a major pressure for all citizens, businesses and the nation to improve the efficiency of using technology, enhancing resource allocation efficiency and improving productivity.

Second, the efficiency of used resources should be kept on improving. First of all is allocating state resources associated with restructuring, improving public investment efficiency; promoting equitization, reforming state enterprise management; developing state-run service-delivery organizations and units. Restructuring the economy, relocating the workforce from the agricultural sector to the industrial and service sectors to enhance overall productivity geared towards higher value and lower resource usage. At the same time, salary and wage reform should be implemented according to the market principle, to keep balance between wage increase and productivity increase.

Third, the private sector should continue to be strongly developed to become an important driving force of the economy. Fourth, the country should actively enhance international integration in the spirit of strengthening internal forces, overcoming challenges and effectively exploiting opportunities from Free Trade Agreements, particularly new-generation FTAs. Fifth, to effectively implement the above mentioned Leveraging Productivity Growth measures, the Vietnamese government must be steadfast to maintaining political and social stability, strengthening the macroeconomic fundamentals and determine to achieve the goal of sustainable development. These are the preconditions for the success of any investment project or business plan./.

Ministry of Planning and Investment

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