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How do you evaluate the growth drivers of Vietnam's economy in recent times?

Despite recent global geopolitical fluctuations, Vietnam's economy is still outperforming most emerging countries of its scale and attractiveness. Vietnam's economic growth drivers have contributions from the agriculture, forestry, fishery, services, industry and construction sectors. In particular, new growth drivers such as the digital economy, the contribution of TFP to GDP growth, labor productivity growth rate, green economy, etc also offer a solid business climate and vision for its future.

However, the Vietnamese economy has been following the old model for a long time, not escaping the extensive growth model. In addition, the economic structure has shifted towards modernity and increasing services but in the last 5 years there have been signs of slowing down. In fact, agriculture, forestry, and fishery still account for a large proportion of contributions; the role of TFP growth is still weak. The gap in regional development and regional linkages has not been dealt with.

In particular, growth based on innovation, technology, skills and participation in global value chains is still very limited. Moreover, the growth model still relies on manual labor, there is a dual economy (foreign and domestic), the spillover of the foreign-invested sector is still limited, especially the technological capacity and export of the FDI sector accounts for 71%.

Vietnam's investment in science, technology and innovation comprises for only one-quarter of the world's average (about 0.56% of GDP compared to 2.2%). Furthermore, the institutions for science, technology and innovation are still inadequate and without breakthroughs. Private enterprises' investment in research and development (R&D) is low (only 0.44%), while in Korea it is over 80%... Therefore, there have not much improvement in terms of labor productivity. It can be seen that in the period 2016-2020, labor productivity increased by an average of 5.8% per year, in the period 2011-2015 it increased by only 4.3%... Currently, Vietnam's labor productivity is considered the lowest in the region (only above Laos).

Another “disadvantage” of Vietnam growth model is that the private economic sector has not developed commensurate with its potential (accounting for 44% of GDP), Vietnamese enterprises are still small, with few large corporations... In addition, the green growth model has not contributed much to sustainable development. The circular economy is still in its infancy and has not yet developed and the blue ocean economy is still mainly in its potential form... Although recent institution reforms, there are still many bottlenecks, a lack of breakthroughs and pilots, especially for science, technology and innovation and for new economic forms (sharing, fintech, data...). Regional connectivity is poor, and has not been fully exploited. Low technology and skills limit participation in global value chains and limit the growth in scale and quality of Vietnamese enterprises.

What are Vietnam’s advantages in renewing its growth model and what solutions do we need to implement to change Vietnam's growth model in the coming time, sir?

In my opinion, Vietnam's growth model is exposed to many renewing opportunities such as: new technology trends (Industry Revolution 4.0), green and digital becoming objective; innovation movement; startup movement; young population structure, good access to technology; smarter production, distribution, consumption... We also have the advantage of being a latecomer to learn from experience.

To innovate the growth model, we need to rely more on new growth orientations and drivers, such as: science, technology and innovation; digital transformation; green transformation.

At present, these issues must be optimized in a quality growth model instead of just discussing. Accordingly, we need a breakthrough in science and technology, quality human resources and linking with innovation to create higher labor productivity, go fast, go smart.

Specifically, it is necessary to have policies to attract high-quality human resources both domestically and internationally, and improve the quality of human resources. Realizing the vision of becoming a green power and digitalizing the economy with institutions for development are also important factors in the process of renewing the growth model. Accordingly, it is necessary to approach the green ecosystem, digital ecosystem, innovation, creating subject linkages in the ecosystem to ensure the ecosystem resources. Perfecting institutions and policies, having pilots, specifics, and breakthroughs. Being creative in mobilizing resources, especially non-state resources.

Along with that, investing in infrastructure, including digital infrastructure, digital platforms, digital applications such as AI, blockchain, etc. to create digital products with Vietnamese brands is also a must. At the same time, there needs to be a mechanism to encourage investment in science, technology and R&D in businesses, farms... Sharing, connecting databases and digital resources, applying in management, operation; regional linkage, chain linkage, industry clusters. In addition, it is also necessary to pay attention to the social aspect in digital transformation, green transformation and the environment such as resource management and pollution, emissions... Pilot institutions, specific to dual transformation (building and piloting practical models such as digital banking, fintech, sharing economy, circular economy...) Creating a creative cultural foundation for innovative startups, dual transformation, sustainable consumption, green living culture...

Thank you very much!