VINACHEM

Vietnam should recognise factors that affect its economy’s productivity and competitiveness to maintain high and sustainable growth, domestic and foreign experts have said.

They made the recommendation at a workshop in Hanoi on December 13 that discussed research on Vietnam’s economy and growth diagnostics.

The country’s economic growth reached 6.68 percent in 2015 – a five-year high since 2011. This year’s GDP is expected to expand 6.3 percent.

Presenting the research findings, Ricardo Hausmann – Director of Harvard University’s Centre for International Development – said there are three groups of bottleneck in Vietnam’s economic growth.

Short-term bottlenecks include the ineffective administrative system, wastefulness, corruption, inappropriate land policies, and high financial costs. The mid-term ones are macro-economic and micro-institutional risks. In the long term, bottlenecks lie in infrastructure and human resources issues.

The research says the State plays a key role in outlining a vision for economic development, making flexible mechanisms and policies, and attracting and encouraging businesses’ participation to tackle bottlenecks.

Vietnam’s production potential is in hi-tech industries like machinery and electronics. The Government also needs to keep attention on traditional manufacturing and export sectors like agriculture, apparel, footwear and mining, but should diversify products and prioritise ones with high added value, according to the research.

Cao Duc Phat, deputy head of the Party Central Committee’s Commission for Economic Affairs, said Vietnam’s economic growth still depends on natural resources exploitation, investment and cheap labour, instead of science-technology application or economic restructuring.

The economy is growing at a slower pace and with lower quality, he noted.

The research on Vietnam’s economy and growth diagnostics was conducted by the Economic Commission and some domestic and foreign experts with the assistance of the US Agency for International Development. - VNN