Vietnam Challenges in Development
“What are the major obstacles in your country’s development to achieve long-term and sustainable growth and in addressing such obstacles what public policies need to be put in place, particularly in relation to national technology and innovation capability?”
Vietnam’s reform process named Doi Moi (Renovation) since 1986 witnessed success of market-oriented changes. Not only has Vietnam been one of the world’s fastest growing economies (averaging over 7 per cent p.a. GDP growth), it has made great strides towards eliminating poverty, achieved national food security and become a major exporter of agricultural commodities. However, the process of shifting from agricultural dominance to industrial dominance has also created number of negatives effects for the country that public policies should be put in place to address.
Three main obstacles, which Vietnam has to face up with, are those issues of growth, society and environment:
Firstly, the country’s economic growth primarily is factor-based and quantity-based while knowledge-based development accounts for minimal proportion. The growth made by input capitals (foreign investment, natural resources) makes the results do not deserve with investment. IMF experts make a comparison of Vietnam case with Thailand and Philippine in the past 2 decades, when two country experienced same position as Vietnam currently, 30-40% total revenue of the nation created 12% growth rate, while Vietnam’s investment up to 60% of total revenue but growth rate is only 6-7%/year. It’s the time to pay attention on economic effectiveness rather than just targets setting.
Secondly, economic growth in short time has lead to series of social issues. Inequality and the gap between rich and poor, rural and urban, plains and mountainous areas has been widened not only in terms of income but also living standards and chances. The rapid growth of urban economy and industry has not been linked harmoniously with rural economy and society.
Vietnam’s reform process named Doi Moi (Renovation) since 1986 witnessed success of market-oriented changes. Not only has Vietnam been one of the world’s fastest growing economies (averaging over 7 per cent p.a. GDP growth), it has made great strides towards eliminating poverty, achieved national food security and become a major exporter of agricultural commodities. However, the process of shifting from agricultural dominance to industrial dominance has also created number of negatives effects for the country that public policies should be put in place to address.
Three main obstacles, which Vietnam has to face up with, are those issues of growth, society and environment:
Firstly, the country’s economic growth primarily is factor-based and quantity-based while knowledge-based development accounts for minimal proportion. The growth made by input capitals (foreign investment, natural resources) makes the results do not deserve with investment. IMF experts make a comparison of Vietnam case with Thailand and Philippine in the past 2 decades, when two country experienced same position as Vietnam currently, 30-40% total revenue of the nation created 12% growth rate, while Vietnam’s investment up to 60% of total revenue but growth rate is only 6-7%/year. It’s the time to pay attention on economic effectiveness rather than just targets setting.
Secondly, economic growth in short time has lead to series of social issues. Inequality and the gap between rich and poor, rural and urban, plains and mountainous areas has been widened not only in terms of income but also living standards and chances. The rapid growth of urban economy and industry has not been linked harmoniously with rural economy and society.