Many expectations for Vietnam's economic growth

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Ousmane Dione, Country Director for the World Bank (WB) in Vietnam: Vietnam's economy becomes more “flexible"

Vietnam's economy has experienced an impressive year of growth thanks to its imports, exports and domestic consumption. In particular, Vietnam's export growth was impressive in 2019, expected to increase by eight percent– nearly four times higher than the globalaverage. Accompanied by the high growth was astable macro economy, low inflation, and enhanced foreign economy.

In the next year, there will be many favourableconditionsfor Vietnam’s economic development, including the impacts of Free Trade Agreements (FTAs). However, how the FTAs impact and become a growth engine is still a matter of debate, including whether Vietnam should rethink the appropriate form of the FTAs.

In addition, the manufacturing sector has made an important contribution to economic growth, but Vietnam must take advantage of it to enhance service and manufacturing activities, to increase the potential contribution of this sector to the economy.The development of Vietnam's economy is a parabola, so we have to look at "the top" and "the bottom" to form the supply and service chain, not focusing on manufacturing and processing. This issue requires innovation as well as a spirit of cohesion to create resources to support Vietnam.

To improve competitiveness, become more attractive, grow stronger and reach out to the world, Vietnam must rely on the FTAs to create an open economy and attract foreign direct investment (FDI). However, we must look at the long term for a successful and sustainable development strategy, not only based on FDI, but also on domestic economies, industries and businesses.Therefore, Vietnam's future policies and strategies for economic development are very important to help private and state enterprises expand to foreign markets and dominate the external market to create value, which will bebrought back Vietnam for development and investment.

Eric Sidgwick, Country Director of the Asian Development Bank (ADB) in Vietnam: Vietnam has made remarkable achievementsin terms of economic growth.

In Asia and Southeast Asia, Vietnam has made remarkable achievements in terms of economic growth, such asgood growth in domestic consumption, stable FDI inflows, low inflation, strong balance of payments as well as prudent fiscal and monetary policies.However, the biggest challenge of Vietnam's economy is how to successfully transform the economic growth modelthat relies heavily on land resources, capital, labor and low added value productioninto efficient production. Vietnam must also adapt and transfer to adigital economy, grow highly in a more comprehensive and sustainable manner.

In the future, Vietnam's economy will have many areas that need to be addressed.One of the priority areas is the promotion of infrastructure development, both the quantity and quality of infrastructure must be better, and both hard and soft infrastructure needs to be improved accordingly.At the same time, training human resources should be a focus, especially those who can cope with the transition to a digital economy; and reform development of financial markets should be accelerated continuously.

Another important priority is the need to strengthen the institutional and policy effectiveness so that the regulatory environment in Vietnam becomes easier and more convenient for production and business activities. There are still many complex regulations, including inconsistent ones between authorities. They need to be consistent and simplified, and then the business environment is more favorable.

Mr. Hong Sun, Vice Chairman of the Korea Chamber of Business in Vietnam (KorCham): Destination of investors

Vietnam will continue to be an attractive destination for foreign investors in general and Korean investors in particular in 2020. The attractiveness of Vietnam is itsstable and breakthrough economic development in 2019, so it is forecasted that from 2020 onwards, Vietnam will continuously have outstanding development. Moreover, the development of Vietnam's economy is also supported by the signed Free Trade Agreements (FTAs) and the benefits gained from the shift of investment flows from China. Therefore, investors will not only invest in new projects but also expand their investments in many other sectors and industries in Vietnam.

In the past, Korea mainly invested directly through building factories and real estate projects. Next year, Korean investors will invest indirectly in areas such as finance, information technology, telecommunications services, and smart cities.

The problem that not only Korean investors but also many investors from other countries are concerned about is the shortage of high quality human resources in Vietnam. As many foreign investment projects come into Vietnam, production and business will be raised to new heights, according to international standards. Hence, the demand for trained and skilled human resources, especially human resources in the fields of finance and technology are very high. Therefore, Vietnam must make short-term, medium-term and long-term plans for training high-quality workers to timely supplement the development of the economy.