Vietnam’s stock market capitalization should reach at least 85% of the GDP by 2025, while the total outstanding bond value would be 47%.

Production at Garment 10 Company. Photo: Thanh Hai

Such targets are part of the Government’s action program on economic restructuring for the 2021-2025 period signed off by Deputy Prime Minister Le Minh Khai on April 12.

Narrow development gaps with ASEAN-4

Under the plan, the Government expects the average productivity expansion rate should be over 6.5% per year, in that of the manufacturing and processing would be 6.5-7%.

“The pace of productivity expansion at key economic zones and five cities of the first administrative level should be higher than the national average,” noted the plan.

By 2025, Vietnam is set to further narrow the national competitiveness gap against ASEAN-4 (Indonesia, Malaysia, Thailand, and the Philippines), especially in terms of the legal framework, infrastructure, and workforce.

The state budget deficit in the 2021-2025 period would be at 3.7% of the GDP, as Vietnam aims to keep expenditure for science and technological development at a minimum of 1% of the GDP.

The number of enterprises adopting innovation and technological advancement should grow by 15% per year in the period, stated the plan.

In the five years, Vietnam should have at least 1.5 million enterprises, 60,000-70,000 of which are of medium and large scale; the contribution of the private sector to the GDP is would be 55%.

The Government also stressed the necessity to promote farm cooperatives with an estimated number of 35,000 by 2025, including 3,000 applying hi-tech into production, and 50% operating under value chains.

Completing restructuring of public investment

A key priority in the action plan is to complete the restructuring process of public investment and state budget management.

The Ministry of Planning and Investment (MPI) is tasked with devising solutions to ensure greater quality of legislation in public investment management; improve the capital absorption capacity of the economy, especially in state budget allocation and disbursement.

The Government requested continued efforts in perfecting a legal framework for public investment management that is in line with international practices.

“The quality of public investment in Vietnam should be equal to that of ASEAN-4, including the process of project selection and evaluation,” it stated.

Meanwhile, the Ministry of Finance (MoF) is responsible for higher efficiency in state budget management and allocation, which has greater authority delegation for provinces/cities in maneuvering local budgets.

 Promoting different types of financial markets

The Government expects to further promote the development of financial institutions, venture capitals, micro-financial organizations, and credit rating agencies.

In this context, the MoF should focus on drafting new incentives for venture capital and submit a financial strategy for Vietnam by 2030, and submit it to the prime minister in 2022.

The MPI is tasked with cooperating with other agencies in proposing a Venture Capital Law during the 2022-2023 period.

Nurturing business community

Another key task for the Government is to nurture a strong business community by strengthening the linkage among enterprises of different sectors.

The MoF, as such, would further implement the plan for restructuring state-owned enterprises (SOEs), according to which the Government is expected to hold a stake in key priority fields.

The plan also tasked the MPI with supporting the development of the private sector and digitalization, which is part of the program to support digitalization in enterprises during the 2021-2025 period.