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Dynamic economic growth requires quality and quantity
Deputy Director of the Central Institute for Economic Management, Nguyen Dinh Cung talks to Nguoi lao dong (The Labourer) newspaper.
You're one of the several authors of a proposal to restructure the national economy. What are the main arguments of that proposal?
Yes. People often refer to the proposal as a project to restructure the economy. The main proposal is to continue the current renewal process while speeding up the process of economic restructuring to achieve high efficiency and strong competitiveness.
Economic restructuring is vital to an economy in transition from mineral resources exploitation to multi-sector, value-added, industrial production.
The contents of the proposal are comprehensive and cover different aspects of the economy, including how to achieve high growth rates and balance at the macro level.
Restructuring the economy requires changes in both scope and scale. These changes should be based on: high growth rates (7.5-8.5 percent) over consecutive decades; the existence of a durable and long-term macro economy, that will win the confidence of the people and the market; and a stable socio-economy.
From the three above-mentioned goals we propose specific measures to reform state-owned enterprises, develop the private sector, raise the level of human resources and expand access to international and domestic markets.
Projects that should be prioritised during the implementation process include:infrastructure projects, administrative reform and human resources development -those areas that have been identified as the bottlenecks of the economy.
But how we should start remains unclear. With regards to infrastructure development, we must address the whole spectrum: Roads, railways, sea routes, rivers and ports. Infrastructure connections for Mong Cai in the far-north and Ca Mau in the far-south also need attention in the context of limited resources. That's why we have to set priorities.
The public administrative reform carried out in the past three years could be described as a start of the overall reform process. In 2010, the government has committed to reducing 30 per cent of administrative procedures. This decision can be regarded as a breakthrough, but more will be needed to remove administrative bottlenecks.
Human resources development is a long story that cannot be solved overnight. We have to find out what areas are in urgent need of skills and what training they require.
In our proposal, we have not mentioned much about social issues. But social issues are closely associated with economic development, particularly in the areas of institutional and economic structures.
Can this economic restructuring be understood as a radical reform in Viet Nam?
Yes! It is a major reform in the country.
More than 20 years ago, in 1986, we already implemented one major reform. From this, the Vietnamese economy, which was a command economy at the time, gradually shifted to a market-based economy.
The first reform was divided into several stages. The first stage (1986-90) was considered a test. The second (1990-2000) saw the Government begin to liberalise the economy along market lines. And the third stage (2000-present) saw a new wave of economic liberalisation that began with the signing of the Viet Nam-US Trade Agreement, followed closely by Viet Nam's accession to the WTO and the issuance of the business law to encourage private sector activity.
At present, we continue to open our economy to the outside world through market expansion while consolidating state power and competency to better control the market.
Timing is very important. Over 20 years of market reforms we have learnt many lessons –both good and bad. Increased risks and failures highlight the importance of the role of the state in steering the economy.
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