2019: Ready for a breakthrough

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The scale of Vietnam's economy has risen to about 5.5 million VND. Source: Internet.

Many fundamental motivations are created

Different from previous years, right on the first day of 2019, together with the issuance of Resolution No. 01/NQ-CP on the tasks and major solutions to implement the Socio-Economic Development Plan and the State Budget Estimation in 2019, the Government also issued Resolution No. 02/NQ-CP on continuing to perform the main tasks and solutions to improve the business environment, improve national competitiveness in 2019 and orientation to 2021.

According to Mr. Nguyen Bich Lam, Director General of the General Statistics Office, if 2018 was a pivotal year to implement the 5-year socio-economic development plan for 2016-2020, 2019 could be considered a "breakthrough" year for creating momentum for Vietnam's economy to reach its destination in 2020. The key 2019 economic task is to moderate macroeconomic stability, and to drastically implement measures to accelerate the pace of restructuring. Economically, innovation is more substantive than the growth model to maintain the current growth momentum. With the GDP growth target of 6.5% -7% of the National Assembly set for the 2016-2020 period, we have reached more than half of the roadmap plan with positive results during the 2016-2018 period with an average growth of 6.7%, and the target of GDP growth for 2019 of the National Assembly is 6.6% - 6.8%.

Judging by the motivations for the 2019 breakthrough year, all experts said that in 2018, the Vietnamese economy created the fundamental drivers for economic growth in 2019 and the following years, that will contribute to boosting the economy in 2019 to achieve high results. According to Mr. Nguyen Bich Lam, besides the challenges, Vietnam's international economic integration moved to a new stage, closely linked to the regional and global economy, marking the time when our country completed its plan to join the World Trade Organization and cut tariffs under the ASEAN Trade in Goods Agreement, to begin implementing FTA commitments with deep reductions. Vietnam has signed and prepared to deploy a new generation of FTAs, such as CPTPP and EVFTA, with deep commitments, high standards and expansion in many fields. These FTA agreements motivate our country's economic growth with a high degree of openness in the economy, while enhancing opportunities to attract and utilize FDI inflows in 2019 and subsequent years.

Many opinions also said that the motivation makes ready a 2019 breakthrough. Accordingly, a strong development of the private economy will be an important foundation for a great contribution to Vietnam's economy. The startup wave has mobilized capital for the economy. If in 2016 there were more than 110 thousand new enterprises established, in 2017 there were nearly 127 thousand enterprises, in 2018 there were more than 131 thousand newly established enterprises, if including the new registered capital and the additional registered capital, then in 2018, enterprises are estimated to supplement nearly 3.9 million billion VND to the economy.

Not to mention, many new production capacities are to be added to the economy in 2019. Expected in 2019, in addition to more than 3 million m2 of floor area to build houses and commercial centers, many projects and big projects will be going into production, businesses such as: Vinfast Factory Complex in Hai Phong with a capacity of 250,000 vehicles/year; investment project of Hau River Power Plant in Hau Giang Province with a capacity of 1200 MW; BOT Bac Giang - Lang Son project with a length of 63.9 km; La Son - Tuy Loan highway project in Thua Thien - Hue with a length of 78 km... Besides, many food processing factories are expected to come into operation in 2019 and a series of works and projects. Other project will be an important driving force to boost economic growth and ensure social security in 2019. Notably, right from the beginning of the year, the 3 big projects with total investment value of nearly 1 billion USD of Quang Ninh province invested from private capital was inaugurated including: Van Don international airport, Ha Long international passenger ship port and Ha Long - Van Don expressway route, creating trust and inspiration for investment and economic development.

Economic expectations 2019

Talking about motivation coming from the CPTPP Agreement, Dr. Tran Toan Thang, Head of the World Economic Division, National Center for Information and Forecasting of Socio-Economic Affairs (NCIF), said, “In general, the overall implementation of CPTPP is beneficial for Vietnam and the impact of CPTPP on Vietnam is estimated at 1.3% of GDP. If there are larger openings on services, the increase in GDP growth may reach 2.1%. These figures do not take into account the impact of investment as well as the pressure of reforming the domestic investment and business environment.” According to Dr. Tran Toan Thang, 2019 will be the first year to implement CPTPP. Some product groups will start with zero tariffs, some groups will start with a longer reduction schedule. However, it is worth mentioning that foreign investors can increase their expectations on better economic prospects in Vietnam, domestic enterprises also expect to increase domestic growth, which will lead to increased demand for goods. Therefore, the expected increase will lead to increased investment, which could create good potentials, opening a huge room for growth in 2019.

Recently, at the Government Conference with localities, General Secretary and State President Nguyen Phu Trong requested, in 2019, it is necessary to strive for higher targets than 2018. Agreeing with this goal, according to the Prime Minister Nguyen Xuan Phuc, the size of Vietnam's economy has risen to about 5.5 million billion VND, so growth higher than 2018 is not easy. Therefore, the Prime Minister asked ministries, branches and localities to seriously, creatively, promptly and drastically implement the contents of Resolution No. 01 and Resolution No. 02 of the Government.

Determining the large role of the private economy, Resolution 01 clarifies the business investment environment, the development of the private economy is a driving force, a breakthrough for the upcoming economic growth. Accordingly, the Resolution focuses on measures to create a non-corrupt environment, such as promoting non-cash payments, strictly enforcing public and transparent regulations in public services, cadre work, especially bidding for investment projects. Reportedly, in the coming time, the decree to support creative startups will soon be issued to promote creative start-ups.

Speed up the reform of the apparatus is a key breakthrough

Besides, the Government soon issued Resolution 02 right from the beginning of the year instead of March and April as in previous years, with the new name, Resolution 02 - replacing the Resolution 19 and with new purpose. The new Resolution shows a spirit of high determination right from the beginning of the year in implementing solutions for economic development in 2019. According to Dr. Nguyen Dinh Cung, Director of the Central Institute for Economic Management, Resolution 02 continues implementing solutions that the Government has focused on, but one of the strategic breakthroughs is institutional reform, improving business environment, and enhancing national competitiveness. With 5 groups of solutions with 4 key areas selected by the Government, the Prime Minister gives priority to this direction, and if it can be improved, it will surely give an impetus for strong progress in the business environment and competitiveness.

In order to promote the efficiency of growth drivers, while improving the competitiveness of the economy, the government's reform and action orders have also been affirmed. The Government has also identified 7 major solutions in economic development 2019, emphasizing that the Government and localities throughout the country should focus on reviewing, supplementing and completing institutions, substantially reducing business conditions that are a barrier to business activities. It is expected that these solutions will be implemented effectively and consistently, which will bring achievements for 2019.