Political Draft Report for the 12th National Party Congress specifies that: “to effectively combine width and depth of development, focusing on the depth, improving the quality of growth and competitiveness”; “innovating growth model in which there is a dramatic change in resources, from dependence in export and foreign investment to equal development of foreign investment, export and domestic market”. The direction for innovation of growth model aims to take productivity, effectiveness of the use of sources and competitiveness as the leading objective to develop both a sustainable economy and society, ensuring social equity and protecting the environment, which is absolutely sound.
It is necessary to maintain a high growth rate of 6.5%-7% per year so that in the year 2020 per capita income will be USD 3,200 – 3,500. Vietnam’s per capita income is now ranked number 7 in 11 Southeast Asian countries, number 36 in 50 Asian countries and territories, number 138 in 182 countries and territories in the world. In spite of high growth rates and successful achievement of poverty alleviation target, there still exists the risk of a further backward economy. Thus, we have no other choice than to speed up the growth rate, continue renewal and restructure the economy. This is a continuous, urgent, and long-lasting process. The economy is to exploit its current competitive edge and facilitate the forming and building of competitive edge in the future for the fields of high-tech, modern industry, potential services to gradually bring our economy to higher level and finally make it a developed one. Changing the economic structure into integration and export direction; integrating our economy with regional and global economy; improving the status of each entrepreneur, each sector, and the whole economy in global value chains, at the same time attaching more importance to domestic demand for consumption.
Changing the growth philosophy
Effectively combining width and depth of growth. In long term, it is necessary to put an end to the growth model set by increased investment, simple and low-quality labour, exploitation of natural resources, and raw material export; instead, gradually changing into an effective and sustainable growth model with a focus on the objective of long-term quality. Specifically, it is necessary to enhance the effectiveness of investment and Total Factor Productivity, maintaining growth rate in a long term and the economy’s competitiveness; combining development with protection of environment, improved social welfare, and hunger alleviation and poverty reduction.
Increasing the effectiveness of growth targets, specifically improving the quality of human resources and level of science and technology; heightening the effect of Total Factor Productivity; enhancing the effectiveness of the use of capital and productivity; shifting the economy to sectors and fields with increased value; proactively manufacturing and exporting high-tech products, on the basis of taking advantage of the country’s potential; synchronizing exploitation and manufacture of products. That requires increased investment in depth for the factor of sources which are the basis for long-term and sustainable growth; at the same time, increasing investment in facility and technique. Increased investment in human resources is best directly manifested in education and training field as “investment in education and training is an investment in development”. Investment in science and technology must focus on their main points to make a breakthrough in a number of high-tech fields, having positive effects on the enhancement of economic competitiveness and effectiveness.
Attaching growth to producing positive domino effect on its objects, especially the target of human development. This matter requires economic growth be directed to the target of sustainable development; maintaining appropriate growth rate in a close bond with the conditions of natural resources, environment and social issues. The new growth model must aim at the environmentally friendly target: developing economics but using natural resources economically; increasing the capability to regenerate natural resources; preventing and controlling environmental degradation and pollution; attaching great importance to the development of a green economy, encouraging clean, sustainable production and consumption. The developing of economics must be frequently and closely controlled, by attaching social development to human development; in which the focal point is hunger alleviation, poverty reduction, creation of employment, social equity, people’s increased living standards, and targets related to human development, such as education, health, sports, racial and gender equality and so on.
Perfecting the mechanism to operate the country’s economy. In this regard, it is necessary to both quickly create mechanisms of free market competition and maintain the State’s intervention at appropriate levels. The intervention and management must comply with and respect regulations of market economy. The two sides are considered as two hands (invisible and visible ones), which should be implemented at appropriate degree and extent to gain effectiveness. The mainstream is to loose and vigorously reduce the State’s direct intervention, enhancing the regulation of market for production and business in steps which the market could regulate more effectively. The State focuses on playing its directive role to accelerate breakthrough development of several prior sectors and territories, being the motivation for growth, further creating and enhancing competitive edge for the whole economy.
Prof, Dr. Chu Van Cap
Ho Chi Minh National Academy of Politics and Public Administration