WB economist pinpoints main pillars for Vietnam’s growth

Date posted: 21.06.2016

Sandeep Mahajan, lead economist of the WB in Vietnam, speaks at a workshop in HCMC on June 16 - PHOTO: VAN NAM

HCMC - Vietnam’s economy should grow based on three main pillars of environmental protection, social equity, State capability and accountability, said the lead economist of the World Bank (WB) in Vietnam.


Speaking at a workshop on Vietnam’s development of a dynamic private sector and the need for institutional reforms in HCMC yesterday, Sandeep Mahajan described the three pillars as a tripod which serves as a firm foundation for Vietnam’s economy to reach growth targets between now towards 2035. 


Mahajan said Vietnam’s growth may cool if one of the three legs is broken. This means that market principles must be respected and the State should not interfere too much in the market. The State should be accountable before the public.


However, there are many challenges for Vietnam to overcome in order to realize the targets the country aims for in the coming years, Mahajan said at the workshop organized by the WB, the Vietnam Chamber of Commerce and Industry (VCCI), and the Ministry of Planning and Investment.


Mahajan noted Vietnam has achieved high growth since 1990 and succeeded in poverty reduction.


Looking to the next decades, Mahajan said if Vietnam targets reasonable economic growth with annual gross domestic product (GDP) per capita expanding around 4%, the country would be as developed as China does now in the period of 20 years.


Vietnam would be like South Korea today if it achieves growth of 7% annually in the period.


Earlier, the Government called on ministries and agencies to do whatever it takes to make the 2016 GDP growth of 6.7% a reality despite slower growth in the first months of this year compared to the same period last year. The slowdown was due partly to the severe impact of protracted drought and saltwater intrusion in parts of the country.


Mahajan advised Vietnam not to solely focus on GDP growth but attach growth to the three said pillars.


In the long term, he called for the country to create a breakthrough in labor productivity improvement, promote innovations, and back enterprises to invest more in new technologies.