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Launching project of Restructuring for a more competitive Vietnam

13/08/2014

On August 11th 2014, in Hanoi, Central Institute for Economic Management - Ministry of Planning and Investment (MPI) of Vietnam in coordination with Department of Foreign Affairs and Trade of Australia hold Project launch Workshop of Restructuring for a more competitive Vietnam (RCV).

 

    Attending the Workshop, there were Mr. Dang Huy Dong, Deputy Minister of MPI; Mr. Hugh Borrowman, Australia Ambassador in Vietnam; Mr. Mike Woods, Deputy Chairman of Australian Productivity Commission; and representatives of Central Institute for Economic Management – MPI, Ministry of Industry and Trade, Institute of Policy and Strategy for Agriculture and Rural Development - Ministry of Agriculture and Rural Development, senior advisers, economists from economic universities of Vietnam and press, media agencies.

 

    Vietnam’s efforts in economic reform and integration for the past 30 years have gained great successes in various aspects. According to the World Bank’s chart, Vietnam became a low middle income country in 2010. The structure of economy has changed towards more positive and modern one; the quantity and quality of social economy infrastructure have considerably improved; several new high technology industries have been startup and developed initially; development gaps between Vietnam and other regional economies have been narrowed down. The macro economy remains stable with the assurance of macroeconomic balances.

    However, Vietnam’s economy has exhibited several internal weaknesses. GDP growth rate is slowing down; quality of growth, efficiency and capacity of economic competitiveness is short. Economic sectors are dispersed and small in scale; industrial production is mostly processing and assembly with low domestic added value. GDP growth and export turnover largely dependent on agricultural products, seafood, minerals, semi-processed products and labor-intensive services. Vietnam has not developed high technology industries and their supporting industries while it has to face huge imbalances between supply and demand within the production chain. Structure of economy, investment and labor remain inefficient; investment efficiency and labor productivity has been low; the efficiency gap between Vietnam and other regional states have not been filled. High inflation rate, unsteady macroeconomic balances, high foreign and public debt, increasing banks’ bad debt have caused macroeconomic instability for the past few years

    Speaking at the Workshop opening, Deputy Minister Dang Huy Dong said that it is necessary to restructure the economy and transform the growth models now. The 11th Party Congress regarded “economic restructuring and growth model renovation” as the development strategy for the period of 2011 – 2020 and requested a “transformation of growth model from breadth to both breadth and depth, scale expansion towards higher quality, efficiency and sustainability”. On February 19th 2013, Prime Minister signed Decision No. 339/QD-TTg approving the Master Plan on economic restructuring in association with transforming the growth model towards improving quality, efficiency and competitiveness during the 2013 – 2020 period. Thereby, economic restructuring along with growth model transformation should be implemented with suitable roadmap and steps so that by 2020, Vietnam’s economy would be built on the basis of a growth model towards depth, ensuring growth quality, enhancing efficiency and competitiveness. The restructuring emphasizes clear segregation of functions assigned to the Government and market with the view to minimizing barriers, promoting agriculture’s advantages, actively integrating regionally and internationally.

    He appreciated achievements of Vietnam after two years of employing economic restructuring. Facing to many challenges, Vietnam needs supports from international organizations and donors in the process of reform, especially to gain international experience and learn from best practices, to strengthen broad-based policy dialogues, to consolidate the foundation for policy and institutional reform and effectively conduct national transformation. Restructuring for more Competitive Vietnam Project (RCV) assisted by the Department of Foreign Affairs and Trade of Australia (DFAT) is very timely and practical. It has been built and employed in the period of 2014 – 2016 in order to support Vietnam implement some activities in the overall economic restructuring Master Plan, shifting growth model towards higher quality, effectiveness and competitiveness.

 

    Speaking at the Workshop, Ambassador Hugh Borrowman expressed his pleasure for supporting of Australia to Vietnam in process of reform. He hoped that this Project with practical and suitable activities would bring efficiency to Vietnam, contribute to improving the capacity of Vietnam Government on macroeconomic management and policy making./.

(Source: MPI Portal)

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