WB expert deems capital accumulation as key growth driver
Vietnam’s economy is facing the shortage of capital and capital accumulation would therefore act as a significant growth driver for the country in the next phase of development, a World Bank economist said at a workshop held in Hanoi on 7 June.
Speaking at the workshop themed “Achieving Quality Growth in the 2021-2030 period: Policy Options and Priorities”, Sebastian Eckardt, the World Bank (WB)’s lead economist on Vietnam, said there is not huge room for the country to enjoy benefits from the golden population structure. Population aging along with low investment and productivity growth has affected the country’s medium-term growth potential.
Eckardt added that Vietnam needs to boost investment and labour productivity in order to recreate its growth momentum and grow into a high-income country by 2045.
The country needs to continue carrying out extensive reforms, improving investment efficiency, and expanding the capital market while greater efforts must be made to better the local business environment and untangle bottlenecks facing the private sector.
Vietnam’s growth potential is lower than that of other fast-growing economies in East Asia, including the Republic of Korea. The Southeast Asian country’s economic growth will gradually decrease without extensive reforms, the WB economist noted.
He recommended that in order to increase the quality of growth, measures should be taken to create more favorable conditions for boosting corporate development, upgrading local infrastructure, and developing qualified workforce. He also underscored the significance of optimizing the sustainable use of natural resources, promoting low carbon growth, and taking climate – change adaptation.
Nguyen Chi Dung, Minister of Planning and Investment, asserted that the implementation of the country’s socio-economic development strategy for the 2011-20 period and the 2016-20 development plan has so far reaped an array of positive results.
Most notably, the country has managed to maintain its macroeconomic stability while enjoying quite good economic growth and undertaking economic restructuring in association with the renewal of growth model.
These outcomes still fall short of expectations due to unfavorable developments of the global economy, admitted the minister, adding that the productivity and competitiveness of the Vietnamese economy remains modest with no major breakthroughs made.
In the next phase of development, he urged for the issuance of breakthrough orientations and policies aimed at bolstering overall economic growth, with a focus placed on a wide range of fields, including human resources, infrastructure, sustainable development, and green growth.