The Vietnamese income per capita is nearly $2,400

The latest report from GSO (General Statistics Office) shows that Vietnam’s economy is valued at VND5,007.9 trillion in 2017 (in accordance with the current price) and the GDP per capita is VND53.5 million, or $2,385, an increase of $170 compared with 2016.

The report emphasized the high GDP growth rate of 6.81 percent, pointing out that the figure is higher than the 6.7 percent target.

However, CIEM’s (Central Institute of Econommic Management) head Nguyen Dinh Cung, an economist, said at a conference recently that $2,400 per capita is a low level.

Le Cao Doan from the Vietnam Economics Institute commented that the figure should be seen as an important indicator which assesses the changes of the national economy in the last 30 years, since Vietnam began shifting from a centrally planned economy to a market economy. This also reflects the thinking and economic management capability.

“If you look at the economy from the two perspectives, you will understand why Cung said income per capita is sad,” Doan commented. 

Minister of Planning and Investment Nguyen Chi Dung, speaking at the Vietnam Sustainability Forum held on January 18, also admitted that income per capita of over $2,300 is a low level.

“The doi moi changed the face of the national economy. With stable high growth rates, people’s lives have improved and Vietnam has become a low middle income country,” he said. 

“However, Vietnam’s GDP is just over $2,300, while the figure for China is $8,000 and the country strives to reach $10,000 by 2020,” he commented. “If we can raise the figure to $10,000-12,000 by 2030, other countries will also see their income per capita increase further.”

“Other countries don’t wait to walk abreast with Vietnam,” he said.

Talking about the weak points of Vietnam economy, Doan said Vietnam has overcome big difficulties and it is no longer a poor country. However, it is stuck at the middle income level, while other countries have been marching forwards. This shows problems in the management and growth model.

The middle-income trap is a problem that international experts have warned against. 

“If Vietnam continues relying on cheap labor force and low land rent as competitive edges and cannot improve productivity, it won’t be able to escape the middle-income trap,” Doan said.

He went on to say that while the government encourages investors to do business, it still cannot offer the most favorable conditions for businesses to develop. The private sector which needs to be the foundation of the economy is still developing at a slow pace.

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Thanh Mai