At a Saturday conference in Harvard University on Vietnam’s development strategy in the 21st century, Prime Minister Pham Minh Chinh said Vietnam’s economy has expanded into the fourth largest economy in ASEAN and among the world’s top 12 economies with the largest scale of commerce. The country also takes part in 15 active FTAs, he said.
Economist David Dapic said Vietnam taking part in FTAs was a major success. Millions of farmers have moved on to work in factories as a result. But the fact that most materials for production are imported from China is a weakness, he added.
When the Covid-19 pandemic broke out, borders were closed and there was commercial tension, Vietnam’s exports were affected, Dapic said.
Vietnam’s trade turnover with the U.S. may reach $100 billion this year. Such a figure might be small for the U.S., but Vietnam should take note to remain in constant communication and avoid being accused of currency manipulation, he advised.
Nguyen Thi Hong, head of the State Bank of Vietnam, said economic integration may bring many opportunities, but there were many challenges as well. Banks should increase their forecast and analytic capabilities to ensure consistent, appropriate policies, and not use currency as a competitive advantage in commerce.
“Vietnam’s control of inflation is very impressive, going hand in hand with a fairly high growth speed. The foreign currency market is stable, and is an opportunity for Vietnam to raise its credit ranking,” Hong said.
Regarding the digital economy, Dapic said FDI, international commerce and education and training cooperation were essential. Attracting FDI was getting more difficult, and for Vietnam’s economy to be trustworthy and reputable, it needs to avoid investment sources that don’t make it competitive, he said.
The economy must also be open, especially in information exchange do as to attract more talents and make investors more comfortable with the business environment, he added.
One characteristic of Vietnam is the fact that many localities are located far away and don’t have accessible infrastructure to attract FDI. Vietnam should experiment with real estate taxation and allow localities to impose such taxes and use the money gained for investment instead of relying on the national budget, Dapic said.
Nguyen Chi Dung, Minister of Planning and Investment, said sustainable development required more than a sustainable economy. It needs a sustainable culture, society and people. Vietnam therefore puts human beings at the center of its policymaking.
“Vietnam sees that quick and sustainable development must rely on new driving forces. Besides institutions and infrastructure, there also needs to be the drivers of science and technology, innovation and cultural values,” Dung said.
PM Chinh is in the U.S. to attend the U.S.-ASEAN Summit, pay an official visit to the country and work with the United Nations. on May 12 and 13. The week long visit is expected to end May 17.
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