Vietnam Development Forum 2017: Leveraging productivity growth for sustainable development
On December 13, the Vietnam Development Forum (VDF), themed “Leveraging productivity growth for sustainable development”, was held in Hanoi.
Vietnam Development Forum 2017.
|
Describing productivity improvement as crucial to Vietnam’s sustainable growth and economy, Dung hoped that development partners, firms and experts at home and abroad will suggest effective solutions to the government to enhance output.
In his speech, World Bank Country Director in Vietnam Ousmane Dione said, he would like to congratulate the government on several important achievements of 2017. Vietnam has witnessed another year of robust growth and macroeconomic stability, marked low single-digit inflation, a relatively stable exchange rate, and a strengthening external position. In addition, he also very encouraged by progress in several areas of strategic reforms — business and administrative environment, banking sector, public investment as well as fiscal and debt management. In particular, he would like to congratulate the government for achieving an improvement of 14 ranks in the WBG Doing Business 2018 ranking. Reform implementation must keep this positive momentum, as it is critical for continued macroeconomic stability and higher productivity growth.
According to World Bank Country Director in Vietnam, improved productivity is significant to turn Vietnam into a middle-income country till 2035. Accordingly, this year, the VDF focuses on the quest for productivity growth which is an issue of crucial importance for Vietnam medium-term development prospects.
In the last five years, and following the global recession, Vietnam has achieved a commendable growth recovery. However, a continuing trend of weak productivity growth remains a concern. Vietnam's average labor productivity growth rate is about four percent. This compares to rates above seven percent for China and five percent for Korea when these countries were at similar levels of development as Vietnam is now. Current productivity growth rates are unlikely to deliver the sustained rapid growth that could see Vietnam follow the development trajectory of countries like Korea and Singapore.
How can Vietnam address the productivity challenge? Regardless of how productivity is measured, this question might look simple, but there are no simple answers. Improvements in efficiency must take place both within individual sectors as well as across sectors, which require effective market institutions and government support.
First, there is ample room for efficiency gains within individual economic sectors in the economy. This could include enhancing industrial energy efficiency, enhancing agricultural transformation and agribusiness development; more efficient transport, logistics, and connectivity. But going beyond efficiency gains, moving up value chains is critical to improving productivity. Again, agriculture transformation in the Mekong Delta is a clear example -shifting from a conventional "rice — fruit shrimp" to a higher-value production structure of "shrimp — fruit rice". Effective linkages between domestic and FDI firms are also critical for Vietnam to move up in global value chains, and ultimately 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 enabling environment — with focus on simplifying administrative procedures and reducing cost burden. But it also means fostering more effective markets to improve resource allocation — it is critical to adopt more market-based approaches to allocate productive resources in both capital and land markets. This will ensure recourses are flowing to the most efficient and productive uses. Finally, strengthened competition policies to ensure a transparent and level playing field for all economic actors.
Third, we can not emphasize more the importance of education, skill and innovation agendas 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, and importantly to a changing economy. As Vietnam integrates further into the global economy, industry, and manufacturing, as well as agriculture and services, are expected to become increasingly sophisticated. Further development of the domestic private sector will also require innovation. The skills-sets sought by Vietnamese and foreign employers will change, requiring the labor market and higher education institutions to adapt, especially as workers with advanced skills and education are in short supply. Creating an effective institutional and incentive framework for innovation is critical for future sustainable productivity growth.
Finally, 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. At a time when concessional development assistance is phasing out — as a result of the recently obtained middle-income status -- Vietnam will need to increasingly rely on mobilizing domestic resources. Improving domestic revenue mobilization, complemented by efforts to enhance expenditure efficiency and debt management capacity, especially domestic debt market, will be important to ensure development objectives can be achieved without raising debt to unsustainable levels. In addition, efforts must be stepped up significantly to create infrastructure an enabling environment for private sector participation in quality development – a critical contribution to Vietnam's needed productivity growth. I look forward to a new and comprehensive Law on Public-Private Partnership that will address many current challenges to the PPP agenda in Vietnam. Last, but not least, ODA resources will need to be used more strategically and effectively to complement domestic public resources and aim to leverage private investments.
During the two sessions, participants look into global trends and experience in increasing productivity and improving Vietnam’s status in the global value chain and agricultural production with fewer resources.
18:45, 2024/11/28
Vietnam, Hesse (Germany) promote high-tech cooperation
Bilateral trade between Vietnam and Hesse has reached around EUR1 billion (US$1.05 billion) annually, accounting for one-tenth of total trade between Vietnam and Germany.
15:34, 2024/11/27
Big discounts on offer at Hanoi's November Promotion Festival
The event is part of the Hanoi Concentrated Promotion Program 2024, held in May, July, and November, attracting up to 2,000 businesses.
17:23, 2024/11/26
Hanoi unveils 150 most popular Vietnamese products and services for 2024
The "Most Popular Vietnamese Products" voting program is part of the city's broader efforts to encourage the consumption of local goods.
16:50, 2024/11/23
Hanoi hosts the Vietnam Regional Specialties Fair 2024
This year's fair will contribute to the promotion of trade and the expansion of typical regional products, especially agricultural and food products that meet export standards.
14:06, 2024/11/20
Hanoi strengthens export competitiveness and trade protection measures
Hanoi will work with the Ministry of Industry and Trade to ensure that businesses and manufacturers are ready for new challenges.
10:49, 2024/11/16
US reiterates Vietnam is not manipulating currency
The US Treasury Department’s positive evaluation underscores Vietnam’s progress in balancing its economic and monetary policies while fostering strong bilateral relations with the US.
- Vietnam, Brazil: Building bridges through shared history and new partnerships
- Hanoi to attract tourists by showcasing local specialties at wholesale markets
- National E-commerce Week, Vietnam Online Shopping Day 2024 set to kick off
- Vietnamese goods in rising demand among Hanoi residents
- Hanoi unveils 2024 rural industrial plans
- Hanoi advances supporting industries for hi-tech services