Bottlenecks limiting Vietnam’s economic growth from OECD perspective
The Organization for Economic Co-operation and Development (OECD) has analyzed some problems that limit Vietnam’s economic development, and proposed solutions to help Vietnam in building a socio-economic strategy from 2021 to 2030.
Analyzing the main confine on Vietnam's sustainable growth path, the OECD noted that the country should focus on improving labor productivity to ensure national economic prosperity.
In terms of capital, OECD supposed that reliance mainly on banks’ funding given the underdeveloped capital market has resulted in inefficient resources being channeled into the domestic private economy.
The OECD’s Multi-dimensional Country Reviews (MDCR) also mentioned some bottlenecks related to institutional issues that hindered Vietnam’s aspiration towards rapid and sustainable development such as lack of transparency in law enforcement, weak governance at state-owned enterprises, and informal costs.
In addition, according to the organization, Vietnam is facing other problems including inefficient use of resources; environmental pollution and serious waste disposal; limited access to education; unsustainable pension system, among others.
Therefore, Vietnam is recommended to develop a more integrated and efficient economy, focusing on investing in the highly-productive sectors and adopting environmentally-friendly production technology.
Vietnam needs to improve the linkage between domestic enterprises and the foreign-invested sector, guarantee a more transparent and reliable institutional environment, with a focus on building human capital as a key to the development as the modern technology is evolving rapidly.
Vietnam is also advised to improve financial capacity for the development in the context of population aging, which leads to the increase in investment and spending needs.
Besides, Vietnam needs to further better its governance for sustainable growth regarding government administration, wage regime, coordination between agencies and local governments, social security benefits, and urban and environmental management.
According to Director of the OECD Development Center Mario Pezzini, Vietnam should consider finding inspiration from the experiences of other developed and developing countries as there is no unique model or manner to achieve development goals.
He also stressed that the final goal is to bring welfare and happiness to the Vietnamese people.
After 30 years of reform (Doi Moi), Vietnam has made great strides in its development with many significant achievements.
Recent international assessments showed a positive growth prospect of the country’s economy, among the fastest-growing ones in the region, at about 6%.
The United Nations (UN) also valued Vietnam among six nations in the world that have achieved many Millennium Development Goals and is actively implementing Sustainable Development Goals.
However, the country needs to have objective, deep and multidimensional assessments to provide coherent solutions in tackling with difficulties and challenges. Hanoitimes