Vietnam’s shift from a centrally planned to a market economy has transformed the country from one of the poorest in the world into a lower middle-income country. Vietnam is now considered one of the most dynamic emerging countries in East Asia.[1] Vietnam is one of the greatest development success stories of our time.[2]
Vietnam’s development over the last 30 plus years since Doi Moi, in 1986, has been quite remarkable with average per capita increasing from US$ 200 to US$2800 in 2018 and the poverty rates reduced from 70% in 1996 to below 6% in 2019. GDP growth exceeded 7% in both 2018🦩 and 2019, one of the fastest in the region and globally. GDP was projected at close to 7% for 2020 but due to the impact of Covid 19 first quarter GDP fell to 3.8% and World bank recently revised their GDP growth projection to 4.9% for 2020.
In a recent release from World Bank (“WB”) on May 27th 2020[3] the WB warned that Vietnam is now at a ‘turning point” and some of the traditional drivers are gradually weakening. Vietnam now needs a productivity-driven model combining innovation and balanced development and allocation of privaﷺte, public, human and natural capital will be the key for Vietnam to achieve its goal of becoming a high-income economy by 2045.
The WB report argues that to thriv🌳e Vietnam needs to give priority to 4 areas:
Dynamic Business: encouraging competition and easing the conditions for establishing and operating businesses will ensure the flow of resources and the most innovative and productive firms. This will only happe♋n if Vietnam meets its repeated promises to ensure easier access to finance, transparency, reduced conditions for businesses and legal protections.
Efficient Infrastructure: Vietnam 💯needs to focus on im🌺proving efficiency and sustainability of infrastructure services including financing and operational maintenance.
Skilled workers and opportunities for all: Whilst the country scores well on basic education꧂ it will now need to promote university and vocational-technical skills which are badly needed to increase productivity. This in conjunction with faster automation.
Green economy: Sustainable development requires more effective management of renewable natural resources and stricter pollution controls, particularly 🍰major urban centres.
I believe that the relevant Government authorities fully appreciate the need to adapt, as outlined in the report, as supported by Vu Viet Ngoan former head of the Economic Advisory Group[4].
Kenneth M Atkinson
Founder and Senior Board Adviser
Grant Thornton Vietnam
[1] World Bank April 27th 2020
[2] Ousmane Dione 🅘World Bank country Director Vietnam
[3] Vibrant Vietnam, 🐓Forging the Foundation of a High Income Economy. World Ba🦹nk
[4] Vietnam Express May 28th 2020.