On December 13th, the Vietnam Development Forum (VDF) 2017 themed “Leveraging productivity growth for sustainable development”, was held in Hanoi. The Forum was co-chaired by the Minister of Planning and Investment Nguyen Chi Dung and the World Bank Country Director in Vietnam Ousmane Dione.
Prime Minister Nguyen Xuan Phuc attended and delivered a keynote speech at the VDF 2017. From the line ministries and agencies, the participants included Deputy Governor of the State Bank of Vietnam Nguyen Thi Hong. In addition, the VDF 2017 was also attended by many ambassadors of foreign countries in Vietnam; chief representatives of development partners, international organizations, foreign non-governmental organizations; representatives of various research institutes, leading economic experts at home and abroad; Representatives of many Business Associations and investors.
A snapshot of Vietnam Development Forum 2017
The topics discussed focused on the trends of global productivity growth and the challenges for Vietnam; Leverage productivity for Vietnam’s sustainable development. VDF 2017 aimed at analyzing the current situation and obstacles for increasing productivity in Vietnam, thus offering specific solutions to boost productivity, one of the long-term solutions for Vietnam's development, overcoming the middle income trap and catching up with developed economies.
The forum consisted of 2 sessions. Session 1 entitled "Productivity Growth - Global Trends and Vietnam challenges ", discussed the issues related to productivity growth, the basics of productivity growth in the world and the reality in Vietnam. Session 2 entitled “Unlocking Vietnam’s productivity growth for sustainable development”. In addition, the international experts also showcased solutions to increase productivity in important sectors of Vietnam economy.
The theme of "Leveraging productivity growth for sustainable growth" of Vietnam Development Forum 2017 is considered to be a very practical approach and timely with Vietnam current situations, especially when Vietnam's economic growth continues to decline. The report at the Forum showed that in 1990-2000 period, the average growth rate was 7.3%; in 2001-2010 period, the rate was reduced to 6.7%, and in the period 2011-2016, it increased only by 6%.
Participants speaks at the Forum
In the last five years, and following the global recession, Vietnam has achieved a commendable growth recovery. However, a continuing trend of weak productivity growth remains a concern. Experts said that in the past years, Vietnam has grown mainly based on the width, that is, capital-based, resource exploitation dependent and labor-intensive. As a result, slower labor productivity has resulted in slow economic growth. That growth pattern is no longer appropriate in the current context, as the global and domestic situations have changed, the industrial revolution 4.0 may bring many opportunities but also many challenges, which requires that Vietnam strives to grow more in depth.
Vietnam's average labor productivity growth rate is about 4%. This is lower compared to the rates above 7% for China and 5% for Korea (Republic) when these countries were at similar levels of development as Vietnam is now. Current productivity growth rate is unlikely to deliver the sustained rapid growth that could see Vietnam follow the development trajectory of countries like Korea and Singapore.
"In that context, the old paradigm cannot help us grow faster and more sustainably. In order to raise the standards of living for people and narrow the development gaps with other countries, increasing productivity is the key to sustainable growth. This is one of the core issues for Vietnam economy today", Minister of Planning and Investment Nguyen Chi Dung emphasized.
Similar to the Vietnam Business Forum 2017 which took place on December 12th, participants at the VDF 2017 once again emphasized need for domestic businesses to have closer ties with FDI enterprises, by becoming a ‘link’ in the production and commercial chain; as well as becoming part of the global value chain.
Moreover, it is necessary to have solutions to raise the awareness of line ministries, agencies, local authorities, and especially enterprises on investment in research and application of science and technology to increase the values of products and enhance productivity.
VA