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South Korea co-operates on development experience
South Korean researchers expect that Viet Nam will quickly shift from an agriculture-based economy to an industry and service-based one in the next 10 years. The insights were presented at a two-day Senior Policy Dialogue starting on Thursday between Vietnamese and South Korean policy researchers.
According to a report co-produced by the Korea Development Institute (KDI) and the Vietnamese Development Strategy Institute since June 2009, Viet Nam's GDP share of agriculture is projected to decline continuously from about 19.8 per cent in 2008 to 14.5 per cent in 2019. The GDP share of industry however will increase from 41.9 per cent to 44.1 per cent, while that of services will increase from 38.3 to 41.4 per cent during the same period.
Hahn Chinhee from the Korea Development Institute said with the transition forecasted, Korean researchers suggested that the country's legal framework needs to be continually amended and improved while public governance and the quality of education and training needs to be improved.
The research also projected that the Vietnamese annual average GDP growth rate for the period 2010-19 would decrease slightly and is expected to be 6.51 per cent in 2019. The slowdown is said to likely come from the slowdown of both capital and labour input.
Chinhee discussed several aspects of Viet Nam's development model for the coming period including attempting to establish efficient markets of all types; developing a system of efficient "hard" infrastructure and accompanying "soft" services; stimulating creativity and preventing macroeconomic problems such as inflation and high unemployment; and continuing to strengthen international linkages.
Besides evaluating Vietnamese development and growth potential up to 2020, four other topics were also discussed. They included monetary and financial policy for stability, efficiency and sustainability; nation-wide land use strategy; industrial technology development, and efficient and harmonious enterprise policies.
For monetary and fiscal discipline, Kim Joonk-kyung, a professor of the KDI School of Public Policy and Management proposed some recommendations including the stability of money flows should be examined regularly and that fiscal discipline remained a necessary condition to maintain the credibility of monetary discipline.
Korean researchers also suggested that Viet Nam should participate in the ASEAN+3 to contribute its financial co-operation initiatives, including the Chiang Mai Initiative, which was taken in 2000 by China, Japan and South Korea to expand an existing set of currency swap arrangements and establish a network of currency swap-and-repurchase arrangements.
The Vietnamese Government has had strong support in research and development (R&D), according to South Korean researchers. A rational approach to science and technology is necessary with increased R&D investment.
Suh Joong-hae from the same institute reported that in 2007, Viet Nam's expenditure on science and technology was VND612 billion (US$32.2 million), which accounted for 0.19 per cent of the GDP. The majority of funding to support R&D came from the government, which accounted for 66 per cent. About 18 per cent of the funding came from universities and 15 per cent from business.
His research suggested that Vietnamese government should increase investment in R&D to 1 per cent of the country's GDP and the state should get more enterprises involved in investing in this field. The investment for R&D should be contributed equally by governmental and private sectors.
The researchers also made recommendations to the Vietnamese government to build a land management information system in order to increase the efficiency of land use planning and land usage related policy.
Other research and policy recommendations on governance of economic groups and technological human resource development were also presented at the forum.
Ngo Doan Vinh, President of the Vietnamese Development Strategy Institute, co-chair of the forum said that he appreciated the valuable recommendations made by the South Korean researchers and his institute would take them into consideration while consulting the Government on relevant policy making processes.
All the research was co-conducted by the Korea Development Institute and the Vietnamese Development Strategy Institute under the Knowledge Sharing Programme sponsored by the South Korean Ministry of Strategy and Finance. The programme, which started in 2004, aimed to provide policy consultation to developing partnership countries on the basis of Korea's development experiences.
Speaking at the forum, the South Korean ambassador to Viet Nam said he hoped that the programme would be expanded in the future and its research would cover more fields including Vietnamese applied science and agriculture.
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