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BUSINESS REPORT

middle incomes by 2030, and a developed economy. “Through monitoring the banking
country with high incomes by 2045. Mr. system, we were concerned about the economy’s
Tran Hong Quang, Director of the Vietnam capital absorption ability in the second quarter
Institute for Development Strategies at the of last year. Although the SBV lowered interest
Ministry of Planning and Investment, said rates three times prior to September, credit
GDP growth is projected at 7 per cent annually growth had been only 4 per cent until July but
for the next decade, which would take per began to increase again from August, rising
capita income to $4,700-5,000 by 2025 and rapidly in November and December and ending
$7,500 by 2030. the year at 12.13 per cent thanks to business’s
In order to realize this goal, he suggested capital absorption,” he told the seminar.
that three targets - institutions, human Vietnam will need to carry out further
resources, and infrastructure breakthroughs institutional reforms and improve its invest-
- be the focus. Vietnam will also need to con- ment and business environment to attract
tinue to boost key economic sectors as well investors, according to Mr. Dang Hoang Hai
as restructure its State-owned enterprises. Anh, senior economist at the World Bank in
Dr. David Gray from the Center for Policy the US. “The first factor is to control Covid-
and Economic Research at the University of 19, as if the pandemic is not controlled it will
Lincoln, said a host of opportunities will cause a lot of turmoil in the economy,” he
come Vietnam’s way in 2021 from free trade said. “The second factor is domestic pur-
agreements (FTAs), including its agreement chasing power, as Asian countries have a
with the UK. The EU-Vietnam FTA (EUVFTA) high rate of savings in the population so this
has now come into effect, and Vietnam has is a resource for economic development.
also joined the Regional Comprehensive Eco- There has been a large flow of capital among
nomic Partnership (RCEP). This shows that citizens so we should emphasize developing
it is increasingly open to free trade and will the local market and restoring domestic pur-
attract more FDI. chasing power. This is the key to development.”
The country’s successful containment of
Elements for success the pandemic, positive economic growth, and
Drivers for success in 2021 will include ratification of recent FTAs reassured investors.
institutional reform, an open business invest- “Foreign investors often say Vietnam is going
ment environment, improvements to the slowly, but I explain that it is going gradually,
ICOR (Incremental Capital-Output Ratio), not so quickly that it makes mistakes,” he
economic restructuring, especially trans- told the seminar. “Business administration
formation, enhancing workplace produc- is also very important, ensuring equal rights
tivity, exploiting the advantages from signed to local and overseas shareholders, as is pro-
FTAs, public investment, applying digital tecting intellectual property rights in a digital
technologies, and urbanization, according economy. All these factors help make the
pHoto: VIet tUAN
to Mr. Nguyen Bich Lam, former General country a highly recommended alternative
economic stability. This is the first time in Director of the General Statistics Office for relocations in Southeast Asia.”
the last 30 years the country has been affected (GSO). Internally, impetus will come from One of the most significant trade events in
by global uncertainties but still maintained macro stability, mutual support in the busi- 2020 was the EVFTA coming into effect on
macro steadiness. ness community, a listening government, August 1, according to experts, paving the
Mr. Thanh expects many highlights in and technological capital. way for increased trade between the EU and
2021 as the country continues to stabilize its In addition, the most important factor Vietnam by eliminating almost 99 per cent of
economy, maintain low interest rates, and helping Vietnam maintain positive growth customs duties. This will benefit Vietnam’s
step up negotiations with major trading part- in 2021 will be the persistent efforts of key export sectors, including smartphones
ners to sustain growth as it continues to enterprises, reflected in economic growth and other electronics, textiles, footwear, and
restrict international travel due to the pan- and higher exports. A survey by the GSO in agriculture. Ms. Bui Kim Thuy, member of
demic. The government should focus on 2020 on the impact of Covid-19 revealed the Harvard Advisory Council for Asia and
recovering investment in the private sector that businesses have made substantial efforts the Pacific, noted that Vietnam has signed 16
and boosting infrastructure investment, while to boost cooperation. FTAs with partners - the second highest in
other highlights would be a strong return of Another key factor is public investment. ASEAN behind Singapore. %
foreign investment as well as a recovery in The GSO has proposed this be increased
domestic purchasing power. because every VND1 of public investment
“Vietnam’s role, position, and brand were attracts private investment of up to VND4.2.
strengthened significantly last year due to its “The most important factor is the efforts of At the annual Vietnam Economic Scenario
Forum 2021 with the theme “Shaping
success in containing the outbreak and posting businesses and public investment,” Mr. Lam Investment - Business Strategies in a New
positive economic growth,” said Mr. Chu Van said. “Regarding exports, most of Vietnam’s Context”, core issues of the economy, key
Lam, Editor-in-Chief of the Vietnam Economic are essential items.” pillars, new growth drivers, and extraordi-
nary opportunities and challenge in the new
Times magazine. “Vietnam is the only econ- Mr. Pham Thanh Ha, General Director of context were discussed and analyzed by
omy in Southeast Asia and one of only ten in the Monetary Policy Department at the State leading local and international economic
the world to post growth.” Bank of Vietnam (SBV), said the central bank experts. It provided an important venue for
It aims to become a developing country would ensure the stability of the monetary businesses to capture more information and
shape their strategic investment and busi-
with modern industry by 2025, a developing market and the operation of credit institutions ness plans for 2021 and subsequent years.
country with modern industry and upper and promote non-cash payments and the digital

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