Responding to Thanh Nien Newspaper at the end of the year, which is also the milestone marking 1,000 days of operation of the current Government, Dr. Tran Dinh Thien (photo) assessed that the economy is gaining momentum and potential. That is the advantage of the Government after 1,000 days of successfully overcoming difficulties. Promoting the current way of thinking and approaching actions is the factor that ensures real success for 2024 and the following years.
The economy is stable and turning around
What exactly is the "space full of fierce events" that the current Government has just experienced, sir?
It can be said that in the nearly 40 years of Vietnam's renovation, there has never been a time as difficult as the past 3 years. 1,000 days have been filled with extraordinary events of historical and human scale: the terrible Covid-19 pandemic; the prolonged global economic disruption; the trend of economic recession and rare high inflation; the unpredictable movements of money and capital flows around the world... All taking place in an environment of war and conflict, in a trend of increasing instability...
Of course, the negative side is only one side of the story. The unprecedented rapid technological change – the boom in the electric car market, the emergence of artificial intelligence, typically Chat GPT; the trend of shifting to renewable energy and green economy; the race and competition in the field of semiconductor chips and rare earths, along with digital and high-tech risks… are strongly influencing the direction of shaping the structure of the modern global economy.
Prime Minister Pham Minh Chinh and delegates cut the ribbon to inaugurate the North-South expressway project, eastern section Mai Son - National Highway 45.
It can be seen that the world is being formatted by three attributes: abnormal, unstable and uncertain. Not to mention the "headwinds" that are raging in the short and medium term. Along with the trend of climate change that is putting humanity in front of existential challenges, the Covid-19 disaster is probably just a warning incident.
In that world, Vietnam is behind, still has many weaknesses, but is the most open economy, of course it will suffer strong impacts from both sides, both positive and negative. Vietnam also went through the painful years of Covid-19, the economy had to struggle with the situation of global chain and circuit breakage, facing the disease of high inflation - high interest rates and unstable exchange rates.
Those objective factors, combined with the economy's own "diseases" and "diseases" that have not been thoroughly addressed, have created a development situation with many rare paradoxes and difficulties. The Covid-19 pandemic has at times pushed the market economy back to a state of "blocking rivers and banning markets". Efforts to disburse public investment capital have run into a wall of procedures. The economy is "thirsty for capital" to the point of "drying up blood". Many businesses have lost their ability to absorb capital...
It is an environment that challenges the capacity and governance of the Government, literally. The space full of fierce events that I speak of is also quite literal.
In that space, what do you think is the greatest result the Government has achieved?
The greatest results of the Government's past 1,000 days of operation can be summarized in two words: Standing firm and turning the situation around. The economy "stood firm" during the Covid-19 pandemic, overcame the situation of simultaneous chain disruption, created the foundation to change the rhythm, confidently entering a new development trajectory - high technology, high-level international integration. I think these are great successes, worthy of recognition.
Can you explain that statement more clearly?
Shifting the mindset and policy to fight the Covid-19 pandemic, from the method of "hunting and quarantining", relying mainly on "administrative - coercive" measures to a "national vaccination campaign" quickly, in extremely difficult and urgent conditions at that time, can be considered a typical example of "turning the situation around". Although it was not the first time, nor the first Government to apply the principle of "unusual situation, unusual solution", the recent pandemic response affirmed both the courage and capacity to "remain constant, respond to all changes" successfully of the Government led by Prime Minister Pham Minh Chinh.
Prime Minister Pham Minh Chinh (second from left) and Deputy Prime Ministers Tran Hong Ha (left cover) , Le Minh Khai and Tran Luu Quang (right cover)
VNA - Nhat Bac - Nam Long
Also following the logic of "abnormal - unusual" and achieving promising initial results, we can mention the efforts to disburse public investment. I still say this is an attack on the "impossible" stronghold of the "ask - give" mechanism and "process - procedure". Although the progress is slow, the results are not really much, but the positive trend is certain.
The Government's macro management during the recent turbulent period also revealed to some extent the capacity and mettle of the Government and the Prime Minister. Maintaining the growth rate and ensuring macro stability for an open economy in the context of a broken world and high inflation is a truly meaningful achievement. It is the result of flexible management and administration, in the spirit of positive "ever-changing". I still believe that it is very difficult to achieve such success in an economy that is heavily based on the "ask-give" mechanism and has a "dualistic" structure.
There are other "turns" that are very interesting, both successful and unsuccessful; some of them are opening up bright prospects, along with great challenges.
For example, the aspiration to build Vietnam into a "global semiconductor chip manufacturing base" and the way the Government is taking action to achieve that goal by 2023 is impressive. It is inspiring, instills confidence and conveys a message about the shift from the usual "linear" development logic to "non-linear" logic. The commitment to develop a green economy, achieving zero carbon by 2050 is also a somewhat unusual approach to action.
Setting highly challenging tasks, first of all to test the capacity and mettle of the Government itself, seems to be a new way of orienting action. If so, this is indeed a meaningful turning point in thinking. The logic is simple: challenging the Government will pave the way for innovation in institutions, mechanisms, and policies, creating opportunities for businesses and the economy.
Development momentum is rising in many localities.
My Thuan 2 Bridge was recently inaugurated.
The Prime Minister has just directed that the North-South Expressway must run all the way to Dat Mui, which means an additional 90 km compared to the old plan. Looking back at the 1,000 days of the current Government's term, the length of expressways nationwide has reached nearly 2,000 km while nearly 20 years ago, the whole country only had 1,163 km of expressways in operation. How do you evaluate this number?
It is truly amazing. In recent years, we have witnessed efforts to unclog the national infrastructure, not at a few points, at a few bottlenecks, with a few separate solutions. This is a system-wide solution, in the entire economy, on all routes - highways, airways, seaports, and recently high-speed railways. This is not an effort to unclog individual bottlenecks, with the motive of making achievements to celebrate, but a way to unclog the system, create the position and strength for national and regional development, to achieve the goal of turning around the development situation.
The number of kilometers of highways completed nearly doubled in less than 3 years is an impressive achievement, with breakthrough significance. But more important than the numbers is the development momentum established in the localities.
From the difficult Mekong Delta provinces to the leading southeastern provinces, to the remote northern mountainous provinces that are very poor and difficult, everyone can see a strong rising spirit. Clearly, the new approach is opening up prospects.
But on the other hand, it is necessary to properly assess the consequences and unwanted impacts of massive infrastructure construction. The skyrocketing price of construction materials, the financial plans of urban transport projects being threatened, the pressure to clear land and the resulting policy risks... are "trade-offs" that must be taken into account more closely in the "cost-benefit" problem at the strategic level.
Changing strategy, promoting the role of public investment as the driving force to promote economic growth instead of private investment as before, do you think is the key for Vietnam's economy to become a bright spot in the global economic picture after the Covid-19 pandemic and the current global economic crisis as assessed by many prestigious international organizations, sir?
First of all, it is necessary to affirm the fundamental role of private investment in the growth and development of the market economy in Vietnam in recent years.
On the other hand, it must be seen that in the past decade, a "paradox" has emerged: despite attracting the largest private investment, both domestic and foreign direct investment (FDI) in the country, the growth rate and economic proportion of the Southeast region - the economic locomotive of the country - has declined sharply. The main reason is the congestion of connecting infrastructure, which is mainly due to the sharp decrease in public investment.
Meanwhile, regions with marked improvements in national status - typically the Red River Delta and the Northern midlands and mountainous region - are all part of the trend of increasing the role of public investment leading private investment.
Initiated more than ten years ago, from the experience of Quang Ninh, the approach of "public investment leading private investment" has great strategic significance. It helps create national strength resonance, link public and private strength, and open up new development momentum for the economy.
The market-based "public-private" approach is leading the institutional reform process, with the PPP Law, Investment Law, Enterprise Law, Real Estate Business Law, and efforts to disburse public investment capital... taking place.
However, I still have to note the slow progress in the effort to restructure the financial and monetary markets; the difficulties in the process of "decentralization - empowerment" between the Central and local levels... still send out warning signals that cannot be ignored.
Breakthrough in both gameplay and scope
Despite many successes, the economy still has many problems, some of which are worrying. The domestic sector is facing unprecedented difficulties; real estate, along with the banking sector, and more broadly, the entire economy, are facing a shortage of capital, increasing bad debt, poor capital absorption capacity, and a sharp decline in market purchasing power. How do you explain this situation?
There is no doubt about the Government's great efforts to relieve the stagnation and congestion in the economy. The approach to solving the problem - resolute, decisive, fast and strong - clearly shows the Government's motivation to act for the economy, for the goal of opening up the market and supporting businesses.
The rapid recovery of the economy from the state of paralysis caused by the Covid-19 pandemic is a clear proof. A series of strong solutions - tax exemptions, cutting procedures, lowering interest rates, promoting public investment disbursement, pumping capital into the economy, increasing wages for workers... were carried out urgently, almost simultaneously, demonstrating the determination in the Government's actions.
However, the capital market is cruel. With it, every delay comes at a price. The economy is in a "vortex", with tremors from "major cases" - the profound consequences of maintaining the imbalanced and distorted state of the markets for too long. This situation is not easy to resolve in a day or two, especially in the current difficult context.
But there is reason to hope for the economy's ability to "escape". "There is no problem that cannot be solved" is what the Prime Minister has repeatedly affirmed; and the economy has succeeded many times with that approach.
Highways, vaccines, macroeconomic stability... for you personally, what is the most outstanding achievement in the 1,000 days of the Government, and why?
The achievements are all outstanding, each in its own unique way, each with its own value.
Personally, I have a special impression of the semiconductor chip breakthrough effort taking place in 2023. It is truly a breakthrough, both in scope and in the way of playing. The scope of high-tech play, "standing shoulder to shoulder with the great powers"; the way of playing is to approach the "dual swords" of the Government - enterprises, following the logic of "strategic partnership", adhering to the principle of "harmonizing interests, sharing risks".
At the beginning of the year, Vietnam received a delegation of American businessmen, including representatives of 52 leading technology corporations. Near the end of the year, Prime Minister Pham Minh Chinh went to open the US high-tech market right after the two countries upgraded their relationship to a comprehensive strategic partnership. At the end of the year, there were visits, surveys and investment commitments from technology corporations, especially semiconductor chip manufacturing corporations.
Those events signaled the "opening" of a practical process, the process of realizing the country's development path according to the logic of progress, the orientation of the digital economy - high technology and the new FDI Strategy that Vietnam has begun to implement in reality. Both the "horizon" and the "flying man" for Vietnam, of Vietnam - the endless worries of poet Tran Dan before - now, both things have appeared.
It won't be easy, but the momentum is set!
2023: Record number of highway projects
2023 is a year with many breakthroughs in investment in developing transport infrastructure, especially the expressway system with many new expressway projects completed and started in more than a decade.
Of which, 20 projects were completed and put into operation, including 9 expressway projects with a length of 475 km, bringing the total length of expressway put into operation nationwide to nearly 1,900 km.
At the same time, about 1,700 km of highways are being constructed, striving to complete and exceed the target of the whole country having about 3,000 km of highways by 2025, and 5,000 km of highways by 2030.
Don't put too much hope in high growth rates.
2024 may still be difficult, and we cannot be overly optimistic. The world is still unstable; the recovery prospects of the Chinese economy are unclear. In that context, we should not put too much hope on high growth rates. Growth achievements are always important, but they can easily come at a high cost when growth conditions are unfavorable. The cost of achieving 1% growth in difficult times will be significantly higher than in normal conditions. Our country is still poor, and Vietnamese enterprises are very weak.
Meanwhile, the room for institutional reform - restructuring of the financial - banking market, the need for a Land Law suitable to the market economy, the requirement to reform the mechanism for disbursing public investment capital... are very urgent, these are things that need to be done immediately to release the potential capacities of the economy. Not to mention the rapidly increasing pressure of the demand to build institutions to support the transformation of energy structure and green economic development.
Besides institutions, preparing the basic material conditions for the new economy - connection infrastructure, energy infrastructure, digital infrastructure, technology human resources, chip manufacturing engineers... will be vital issues in the near future of the country.
Focusing on these two groups of issues instead of being overly "hypnotized" by high growth "speed" is considered a wise strategic choice, even in the medium and short term vision.
Dr. Tran Dinh Thien
Mai Son Expressway - National Highway 45, Thanh Hoa - Ninh Binh section
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