Reform or lag behind: Vietnam 2035 report
The strong message the economists – the authors of the Vietnam 2035 Report – want to convey is that Vietnam needs to carry out reform, or it will lag behind, according to Pham Chi Lan, a renowned economist, a member of the report preparation team.
VietNamNet Bridge - The strong message the economists – the authors of the Vietnam 2035 Report – want to convey is that Vietnam needs to carry out reform, or it will lag behind, according to Pham Chi Lan, a renowned economist, a member of the report preparation team.
Lan said the economists tested economic models and found that if Vietnam carries out institutional reform and increases productivity, it would obtain income per capita of $7,000 per annum, or $18,000 if considering purchase power parity.
But if Vietnam does not carry out reform, its income per capita by 2035 would be $4,500 per annum at maximum, or $12,000 if considering the purchase power parity.
Lan emphasized that If the country tried to gain a global higher average income level at over $7,000 per annum, or $15,000-18,000 if considering purchase power parity by 2035, Vietnam has no other choice than improving its productivity.
“If the productivity cannot be higher, we will surely not have this level of average income,” he said.
Investment capital and the number of workers – factors which help push up the economic growth – have been used up. Vietnam will no longer receive ODA (official development assistance) in the future, while the number of workers will not increase because the Vietnamese population is aging.
Vietnam needs to carry out reform, or it will lag behind
What does Vietnam 2035 says about key industries?
The report says that Vietnam would become an industrialized country by 2035 approaching modernization.
However, it only shows the concept of ‘industrialization’, while it cannot suggest which industries should be the ‘key industries’ for Vietnam to focus on.
There are three criteria for a country to be recognized as an industrialized country. First, industries and services must make up at least 90 percent of GDP. Second, the labor force in industries and services must account for 75 percent at minimum. Third, urban dwellers must account for 55 percent at least.
WB’s economists, when asked about ‘key industries’, said it was difficult for Vietnam to take the initiative in deciding what would be key industries, because this depends on countries with higher development levels. They choose where they will set up their production bases.
What Vietnam can do is to prepare its labor force, infrastructure and material facilities.
Lan, mentioning Samsung, said there was goods news for Vietnam. “A Samsung senior management official said the number of Vietnamese engineers in Samsung Vietnam has increased from 300 to 2,000,” she said.
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