Innovation of the growth model
Vietnam is targeting high GDP growth, at least 8% for 2025 and double digits in the following years, to turn the economy from a middle-income country to a high-income country by 2045. The challenges from both the external and internal environments are huge, so Vietnam needs to have appropriate macroeconomic policies, promote internal strength and minimize the risks of macroeconomic instability and geopolitical tensions in the world.
According to Associate Professor, Dr. Pham The Anh - Head of the Faculty of Economics, National Economics University - Vietnam's growth model over the past three decades has mainly relied on investment and export orientation, reflected in the strong increase in export/GDP ratio. However, the ability to participate in the global supply chain is still limited; FDI enterprises operate independently and have few links with domestic enterprises, causing Vietnamese enterprises to mainly carry out low-value processing stages and depend heavily on raw material imports. dependence on exports also creates great risks when economic recession or increased trade tensions occur between major trading partners.
Without policy breakthroughs, Vietnam's economic growth may continue to depend mainly on exports and foreign investment, with growth rates only being moderate and it is difficult to make a breakthrough to escape the middle-income trap. Innovating the growth model to increase internal resources and minimize external risks is urgent in the current context - Associate Professor, Dr. Pham The Anh emphasized.
According to Associate Professor, Dr. Pham The Anh, to achieve the double-digit economic growth target, Vietnam needs to significantly reduce regular expenditures of the State apparatus. Improving the operational efficiency of the apparatus, streamlining the payroll and strictly controlling ineffective expenditures will save a large amount of capital, which can be reallocated to infrastructure development investment.
In addition, in the context of increasing trade tensions, the amendment/cutting of personal income tax burden should be implemented to stimulate Vietnam's domestic consumption, thereby partially compensating for the decline in export activities.
"Vietnam is currently maintaining a large number of state-owned enterprises (SOEs) operating in many fields, including sectors where the participation of the State is unnecessary. This situation poses many challenges when many state-owned enterprises operate ineffectively, causing waste of national resources. It is time for Vietnam to boldly divest capital from ineffective state-owned enterprises, especially in industries that are not strategic focus and do not need state participation. The revenue from divesting these enterprises will be used to invest in key national projects with more momentum, capable of creating higher economic and social value" - Associate Professor, Dr. Pham The Anh proposed.
The Four Resolutions - a lever to promote innovation and increase national productivity
In the context of implementing the "four strategies" in the recently issued Party resolutions, including Resolution 57, Resolution 59, Resolution 66 and Resolution 68, it has created favorable conditions for implementing solutions to improve growth quality, creating a breakthrough in productivity growth.
According to Dr. Dang Thi Thu Hoai - Institute for Policy and Strategy Research - a streamlined apparatus along with new thinking on building a legal system, on breakthroughs in developing science and technology (STI), innovation (STI), digital transformation (DTS) and developing the private economy contributes to forming an institutional framework to encourage innovation, focusing on the goal and results of promoting innovation (idN).
According to Dr. Dang Thi Thu Hoai, the merger of provinces will remove barriers to resource division and obstacles in promoting regional linkages, helping to allocate and use resources more effectively, creating conditions to improve productivity and competitiveness. In particular, new thinking in private economic development will arouse and promote the dynamic and creative business spirit of this area, promote innovation, and improve productivity.
Vietnam needs to focus on improving the productivity of the private sector, because this is an area with a large proportion of labor and plays a central role in economic growth. There should be measures to support the private sector in accessing new technology, improving governance skills and enhancing innovation" - Dr. Dang Thi Thu Hoai said.
Vietnam also needs to improve domestic productivity, effectively mobilize resources and develop new economic sectors and focus on improving productivity in each specific sector. This requires investment selection, focusing on areas with high potential for spread such as high-tech industry, digital services, or green economy.
"The promulgation of solutions to implement the above Resolutions needs to aim at the effective operation of the endogenous mechanism of the culture and sports, forming a creative culture, thereby creating strong enough and sustainable motivation in increasing productivity to create qualitative changes in the growth model" - Dr. Dang Thi Thu Hoai emphasized.
