Samson: Việt Nam to take the lead in economic growth in Southeast Asia: Nikkei Asia
26th February, 2021
Việt Nam is predicted to record positive growth this year, especially in the context of US-China trade tensions that may persist in the coming years.
As a leading financial newspaper run by Japanese media giants Nikkei Inc, Nikkei Asia stated that: “Southeast Asia’s growth leader in 2021 may well be Việt Nam,” during a recent article detailing ASEAN’s GDP forecasts for the year ahead. According to Nikkei, the country recorded economic growth of 2.9 per cent last year due to its success in containing the novel coronavirus (COVID-19), in addition to robust exports of electronics and other consumer products, with the nation reportedly targeting a growth rate of 6.5 per cent this year.
Gareth Leather, senior Asia economist at Capital Economics, said that Vietnamese exports should continue to be supported by tariffs imposed by the US on Chinese goods. He noted that: “To avoid US tariffs, importers have shifted demand from China to alternative suppliers. With US-China relations likely to remain strained over the years ahead, this trend is likely to continue.” The newspaper also stressed that before the pandemic, Southeast Asia achieved collective annual growth of approximately 5 per cent over the course of many years, therefore making it one of the world’s best-performing regions in economic terms.
According to media reports, the region has become an attractive investment destination, with a relatively young population that drives demand and provides plenty of manufacturing labour. Although these factors can be viewed as advantages that can boost economic growth, the region’s top priority in the short term is to stamp out COVID-19.
Previously, many Japanese and international newspapers made positive forecasts about Việt Nam’s economic prospects. In the article entitled Overcoming the COVID-19 pandemic, Việt Nam’s economy grows favorably, Dr. Bùi Mạnh Hùng attributed Việt Nam’s successful control of the COVID-19 pandemic to three main reasons: absolute trust in the Vietnamese Government’s direction, strict compliance with the Government instructions, and people’s unity and awareness of the dangers of the pandemic, and that has attracted great attention of Japanese readers.
The article said that the COVID-19 pandemic is causing terrible impacts on the socio-economic development of countries around the world and many countries have suffered negative economic growth. But, Việt Nam’s economy in 2020 achieved a surprising growth of 2.91 per cent and is forecast to continue to grow at a high level in 2021, becoming a bright spot of the world economy, according to an article published in Japan’s journal Security Anpo, January edition.
The author quoted Prime Minister Nguyễn Xuân Phúc in emphasising Việt Nam’s economic growth of 2020 with a stable macro economy, low-level inflation, positive growth and improved economic balance. Although investment and trade shrank due to the pandemic, the economic growth was still at a high level compared to other countries in the region and around the world.
With its success in pandemic response, Việt Nam has worked out effective policies and measures to restore the economy, according to Security Anpo. The article highlighted Việt Nam’s success in signing international economic agreements.
On November 15, 2020, ASEAN, including Việt Nam and five partner countries Japan, China, India, Australia, and New Zealand signed the Regional Comprehensive Economic Partnership (RCEP). This agreement is expected to promote the formation of global supply chains to contribute to the economic development of member countries including Việt Nam. Previously, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Free Trade Agreement with the EU (EVFTA) was also signed, demonstrating Việt Nam’s determination in implementing its economic commitments.
The author said Việt Nam is attracting great attention from foreign investors. Signing many international agreements, Việt Nam commits itself to create favourable conditions for foreign investors. Many investors from the US, Japan, and South Korea want to move their businesses to the Vietnamese market or plan to start a business in Việt Nam, the article said.
The author said that there were many forecasts about Việt Nam’s economic growth in 2021. A reputable UK bank forecasted that by 2021, the Vietnamese economy would likely reach 7.8 per cent growth, while Asian Development Bank (ADB) forecasted 6.3 per cent. Many other experts and prestigious economic organisations were also optimistic about Việt Nam’s economic growth in the coming years. LINK
Samson: Việt Nam, West Virginia bolster bilateral co-operation
26th February, 2021
Representatives from the Vietnamese Ministry of Industry and Trade (MoIT) and the US state of West Virginia signed a memorandum of understanding (MoU) on Thursday to accelerate co-operation in the economy, trade, and energy.
The two sides aim to form a comprehensive co-operation framework to facilitate bilateral trade and investment ties in industry and energy while increasing the exchange of information on business opportunities and supporting co-operation projects and businesses of both sides.
Addressing the signing ceremony, Minister of Industry and Trade Trần Tuấn Anh highlighted the special Việt Nam-US partnership while lauding the role and effort of Congresswoman Carol Miller and Governor Jim Justice of West Virginia in promoting the US’s economic and trade ties with Việt Nam in the US Congress and government. “This is a suitable time for the two sides to boost the partnership to speed up economic recovery and cope with the COVID-19 pandemic,” Anh said, stressing that the US is an important and long-term partner of Việt Nam in energy. He described it as an important foundation for strengthening ties in the long term.
According to Vietnamese Ambassador to the US Hà Kim Ngọc, Việt Nam-US relations have seen strong progress in all fields since the comprehensive partnership was established in 2013. For her part, Miller expressed her hope to boost bilateral co-operation in industry and trade, especially energy.
Việt Nam and the US have seen growth in bilateral trade and investment relations over the years. Two-way trade exceeded US$90 billion for the first time last year and the figure is expected to reach $100 billion this year. The two nations have designed an action plan featuring a range of solutions, towards a harmonious and sustainable trade relationship. LINK
Samson: Vietnam transitions from successful pandemic containment to strong economic recovery: AMRO
22nd February, 2021
Việt Nam’s gross domestic product (GDP) is expected to rebound to 7 per cent in 2021, riding on a recovery in external demand, a resilient domestic economy and increased production capacity, according to the preliminary assessment by the ASEAN+3 Macroeconomic Research Office (AMRO) after its virtual annual consultation with the Vietnamese authorities in the last two months.
Amid heightened uncertainty, continued policy support is essential to bolster the nascent economic recovery and facilitate the transition to the post-pandemic “new normal”. “Việt Nam’s economic growth slowed to 2.9 per cent in 2020 due to the pandemic but is expected to rise to 7 per cent in 2021,” said AMRO’s lead specialist Dr. Seung Hyun Luke Hong. “The rebound is expected to be underpinned by a recovery in external demand, a resilient domestic economy, capital inflows, and increased production capacity,” Hong said.
After a disrupted second quarter, Việt Nam’s economy started to pick up in the third quarter of 2020 thanks to the rebound in manufacturing activity, which was boosted by robust export growth. Meanwhile, domestic consumption also bounced back following the relaxation of mobility restrictions, along with the recovery benefited from acceleration in the disbursement of public investment.
However, the AMRO team also pointed out some risks and vulnerabilities for the rebound in 2021. They include uneven recovery of the global economy which may jeopardise the recovery in external demand, susceptible domestic demand to the risk of further waves of COVID-19 infection, impairment of the balance sheets of the business sector and the hit on unemployment and labour market.
On the financial front, there is a risk that a deterioration of the banking system’s asset quality will erode its relatively thin capital buffers. Vulnerabilities may also emerge from the sizeable consumer loan segment and from a sharp rise in the holdings of corporate bonds by banks. The team recommended the Vietnamese Government provide greater fiscal support through both revenue and expenditure measures to bolster the nascent economic recovery if the growth momentum were to weaken.
Targeted support to micro, small and medium enterprises and low-income households also needs to continue and be regularly reviewed for its relevance and effectiveness, it said.
Meanwhile, given the benign inflation outlook, it is essential that monetary policy remains supportive of economic recovery, keeping financing costs affordable for households and businesses. On the external front, with high uncertainties in the post-pandemic global recovery, the authorities should strengthen the external buffer through greater flexibility in the exchange rate.
Lastly, the team said it is essential to ensure continued support for long-term development issues, such as infrastructure development, human capital development, social safety net, and particularly public health, while carefully managing risks to long-term fiscal sustainability. LINK
Việt Nam aims for GDP per capita of $5,000 by 2025, developed country status by 2045: 13th Party Congress’s Resolution
26th February, 2021
The Communist Party is aiming for Việt Nam to reach GDP per capita of $5,000 by 2025 and to be a developed country by 2045. The goals are part of the Resolution of the 13th National Party Congress held from January 25 to February 1, the entirety of which has just been released by the Office of the Party Central Committee.
The Resolution noted the highlight of the 12th tenure was the successful handling of the COVID-19 pandemic resulting in significant economic achievements – including stable macroeconomics, controlled inflation and high GDP growth, while people’s living standards were improved. The fight against corruption, loss and waste was intensified, while the socio-political situation remained stable, foreign relations deepened and Việt Nam’s profile on the international stage grew.
However, numerous shortcomings – including slow modernisation and industrialisation, shifting in the growth model, limited competitiveness and quality and productivity of the economy, inadequate adaptation to climate change and environment protection demands, drawbacks in Party building and rectification, that science and technology has not been the driving engine of socio-economic growth and the lives of certain groups of people remain difficult – of the 12th tenure have been identified in the Resolution.
The achievements of 35 years of implementation of đổi mới (Reform), 30 years of implementing the 1991 Party Platform and in the 10 years of implementing the 2011 Revised Party Platform have proved that the country’s path towards socialism is consistent with Việt Nam’s practical situation and the times’ development trends, with the Party’s righteous leadership the leading factor in Việt Nam’s revolutionary victories, the Resolution reads. Amid rapidly shifting and complex developments in the global scene, the Party Platform continues to serve as the ideological flag to gather the collective strength of united peoples for the goal of a “prosperous-people, strong-nation, democratic, equitable, and civilised” Việt Nam.
Development vision and orientations
In the coming years, the challenges and opportunities of a complicated world demand the entire Party and Vietnamese people to “unite” and continue to have major changes in mindset and make correct and timely forecasts of the situation to prepare and deal with any circumstance, to “bring the country forward on the path of rapid, sustainable development” and the attainment of many orientations, goals, and tasks.
The Resolution lists major guiding orientations of the years forward, including “persistent and innovative” implementation of Marxist-Leninism and Hồ Chí Minh ideology, persistent pursuit of socialism and independence and upholding national interests based on the principles of the United Nations’ Charter and international law and the spirit of equal and win-win co-operation, with national defence and security in mind.
It also aims to enhance patriotism, the spirit of resilience, national unity and people’s aspirations to develop a prosperous and happy nation, promoting socialist democracy, enhancing the quality of human resources and promoting innovation and science and technology – especially the achievements of the Fourth Industrial Revolution – in service of the country’s sustainable and rapid development. In addition, Party building and governance are goals, working towards a streamlined and effective Party system with quality cadres and civil servants.
The “general objectives” are identified as improving the Party’s leadership and ruling capacity; building a pure, strong and comprehensive Party and political system; consolidating and raising people’s confidence in the Party, the State and the socialist regime; fomenting aspirations to develop a prosperous and happy country; promoting the will and strength of national solidarity; promoting comprehensive and synchronous đổi mới (reforms), industrialisation, and modernisation; building and firmly defending the Fatherland, maintaining a peaceful and stable environment; and striving to become a developed country with socialist orientations by the middle of the 21st century.
The “particular objectives” are set on Việt Nam becoming a developed nation with a modern industrial base and leaving the ranks of lower-middle-income countries by 2025 – the year marking the 50th anniversary of the liberation of the south and national reunification. By 2030, when the Party celebrates its 100th founding anniversary, Việt Nam is hoped to become a developing country with a modern industrial base and upper-middle incomes. By 2045, the 100th anniversary of the establishment of the Democratic Republic of Việt Nam, now the Socialist Republic of Việt Nam, Việt Nam is hoped to become a developed, industrialised nation with high income.
In 2021-25, the Resolution sets a target for average GDP growth of 6.5-7 per cent, GDP per capita by 2025 reaching $4,700-5,000, the contributions of total factor productivity (TFP) in economic growth reaching 45 per cent, the labour productivity increase hitting 6.5 per cent a year, urbanisation reaching 45 per cent, the ratio of processing and manufacturing industries in the GDP exceeding 25 per cent, and the digital economy accounting for 20 per cent of the country’s GDP.
In this time frame, the Resolution aims for agricultural labour ratio staying at 25 per cent, the ratio of trained labour reaching 70 per cent, urban unemployment kept at below 4 per cent, the rate of multidimensional poverty maintaining a decrease of 1-1.5 per cent year-on-year, aiming for 10 doctors and 30 hospital beds for every 10,000 people, striving towards 95 per cent of the Vietnamese population being covered under the State’s health insurance, life expectancy reaching 74.5 years, and the ratio of communes obtaining new rural standards reaching at least 80 per cent, including 10 per cent meeting the requirements of exemplary new rural standards.
In terms of environment, by 2025, the goals are to have 95-100 per cent of the urban population and 93-95 per cent of rural population having access to clean and hygienic water, 90 per cent of urban waste properly collected and treated, 92 per cent of active industrial-processing zones outfitted with proper wastewater treatment facilities; 100 per cent of all businesses polluting the environment punished; and upholding the national forest coverage at 42 per cent.
The 13th tenure has “six central tasks”, with the first being Party building, building rules-based socialist State, with effective, corruption-free governance. The second task is controlling the COVID-19 pandemic, ensuring COVID-19 vaccination coverage, while engaging in economic recovery, pursuing the transformation of growth model and economic restructuring, implementing national digital transformation strategy, raising labour productivity and innovation, and third is upholding independence, improving the effectiveness of foreign affairs and international integration, building modern and elite armed forces, and maintaining peaceful and stable environment for development.
The fourth central task is inspiring patriotism among the people to develop a prosperous and happy nation, promoting the role of cultural values and the strength of Vietnamese people in nation-building and defence, with detailed policies to develop the culture of ethnic minority groups, carrying out social policies and ensuring social security for the people, raising living standards and happiness indexes of the Vietnamese people. Fifth is perfecting the legal system, institutions, and policies to promote socialist democracy. The final central task is to strictly manage, reasonably and effectively use land and natural resources, protecting the environment, and implementing adaptation measures to cope with climate change and natural disasters.
To achieve the goals, the Party sets three major breakthrough strategies – completing development institutions, developing human resources, and building modern infrastructure.
Regarding institutions, the Party identifies the need to improve development institutions for a socialist-oriented market economy; reforming State governance towards modernity and competitiveness; improving the legal system and institutions to create a favourable, healthy, and fair business and investment environment for all sectors of the economy where innovation can foster; mobilising, managing and using all resources – especially land, finance, public-private partnership – for development purposes; bolstering reasonable decentralisation, while enhancing inspections and keeping powers in check via the legal system.
For human resources, the Party wants a priority on high-quality human resources for leadership and management and key positions, based on “comprehensive and radical transformation of education and training quality in tandem with recruitment and incentive policies”; promoting research, transfer, application and development of science and technology, innovation; promoting the aspirations for national development, people’s sense of unity and national pride in nation-building and defence efforts.
The Resolution also states the demand for “modern and synchronous” social and economic infrastructure, with a focus on national key transport projects, climate adaptation projects, and information and communications projects to serve national digital transformation and the development of a digital economy and society. LINK