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Investment to drive nation forward
Increasing investment capital will drive Vietnam’s economic growth in the next five years and accelerate infrastructure and human resources growth.
According to a draft socio-economic development plan for 2011-2015, released by the Ministry of Planning and Investment (MPI), total social investment capital during the next five years has to be at least 41.5 percent of gross domestic product (GDP).
The MPI estimates the total investment capital for economic development during next five years would be about $300 billion, 1.9 times more than for 2006-2010.
A huge amount of capital will be used to improve infrastructure and human resources to generate sustainable growth, according to the draft. The average economic growth is set to be 7.5-8 per cent from 2011 to 2015.
“Though Vietnam is out of the under-developed status, its economy is still at a low level. Thus, it still needs more investment capital to pump into infrastructure, health and education projects,” said Bui Ha, Director of MPI’s Department of National Economic Issues.
“It is true that our economic growth should be more based on the services and hi-tech industries, but we cannot change it immediately and increasing investment capital still contributes to economic growth,” he added.
Though Vietnam has developed its infrastructure and education sectors, they still remain biggest obstacles hindering economic development. MPI vice minister Cao Viet Sinh said increased investment capital in those sectors would ensure a high growth, but also “create favourable conditions for a sustainable growth in the country.”
The MPI estimates that 70 per cent of social investment capital comes from domestic sources and the remainder from foreign capital. The target for disbursed foreign direct investment capital will $56 billion and disbursed official development assistance at $10-$12 billion in the next five years.
Adam McCarty, chief economist at Mekong Economics, said the priority for infrastructure and human resource development, the big constraints of the economy, was suitable to current development requirements. But, he warned that the targets could not be reached unless the government resolved a number of economic issues.
“The economic plan remains stressed on investment quantity and I hope the government details measures to improve investment quality,” McCarty said.
While focusing on infrastructure and human resource, the MPI said priority would be given to the industry, construction and services sectors to make Vietnam become an industrialised country by 2020.
According to the draft, by 2015, the proportion of industry and construction sector would account 40-41 per cent of the country’s GDP, the service sector is 40-41 per cent, and agriculture, forestry and fisheries sector is 18-19 per cent, compared to 40.3, 39.79 and 19.9 respectively estimated in 2010.
Industrial fields like energy, electronic and mechanical manufacturing and environment friendly fields and services fields like telecommunication, education, finance, logistic and business services will be prioritised, said the draft.
The draft said the average value-added growth in the industrial and construction sectors was expected to be 7-8 per cent, while the average industrial production value growth would be 12.5-13.5 per cent. Apart from prioritising industrialisation and modernisation, the draft also pointed out targets for poverty reduction and environment protection.
The government aims to reduce poverty by about 2 per cent each year from 10 per cent estimated in 2010. By 2015, the Vietnam’s average income per capital was estimated to be $2,100 as the GDP would be $200 billion, according to the draft.
vietnamnet, VIR
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