New thinking is needed to establish a sustainable economic structure.

Economic structure has not changed significantly

Dr. Vu Thanh Tu Anh speaks at the Vietnam economic conference in 2024 and prospects for 2025. Photo: TH

According to Dr. Vu Thanh Tu Anh, senior lecturer at the Fulbright School of Public Policy and Management, Fulbright University Vietnam, in Vietnam, when talking about economic structure, we often talk about structure by industry, by field, by labor... However, a very important structure in terms of technology, added value and productivity is not really captured by the statistical system.

“Looking at Vietnam's export basket 20, 30 years ago, crude oil accounted for about 20%. Now crude oil accounts for less than 2%. 20 years ago, we could not export a single mobile phone, now mobile phones account for 20% of total export goods... Obviously the structure of goods has changed but the very important ratio that we want, which is added value and productivity, has not changed,” Dr. Vu Thanh Tu Anh stated in a roundtable discussion at the National Scientific Conference: "Vietnam's economy in 2024 and prospects for 2025: Promoting economic institutional reform in the new era".

Also discussing, Associate Professor Dr. Bui Tat Thang, former Director of the Institute of Development Strategy, said that the economic restructuring has been over for 15 years, but the results have not been as expected. Overall growth is relatively good but has not created a new development model, a new growth model.

“We always put the issue of restructuring in conjunction with the formation of a new economic growth model, but basically, after 15 years of restructuring with great efforts at all levels, in all sectors, and in all localities, we still have not found the shadow of a new growth model that is much different from before restructuring,” this expert frankly stated.

Agreeing with the view of Associate Professor, Dr. Bui Tat Thang, Dr. Vu Thanh Tu Anh analyzed that, in general, the economy must go through a growth phase based on input factors, specifically related to concentrating resources on investment to increase labor.

The second phase begins to focus on productivity growth, where technology must be introduced, infrastructure must be modernized, institutions must be developed, markets must be used as the main resource allocation mechanism…

In the third phase, the phase of innovation and technology transfer, there must be something unique to Vietnam and large corporations and enterprises.

“Vietnam has now passed the first stage and is in the second stage but has not yet moved to the third stage. Failure to move to stages 2 and 3 will create a middle-income trap. Therefore, it is impossible to increase the value-added content of its products, including high-tech export products,” said Dr. Vu Thanh Tu Anh.

Need to put private economy in central position

Economic experts participated in a roundtable discussion at the workshop.

Discussing the efforts in restructuring the economy, Dr. Vu Thanh Tu Anh said that it is necessary to reposition the sector that plays the role of a pillar and focus in development. That is to return the private economic sector to its important position. When this is done, it will increase the value-added content in Vietnam's export products and receive technology transfer as well as self-invent technology more effectively.

Developing the private economy and considering it as the most basic internal force of the Vietnamese economy is one of the solutions to solve the middle-income trap problem for Vietnam. If we look at the FDI investment sector and the export sector, although it brings Vietnam many conditions to become prosperous, it is also the sector that will be immediately affected and can leave Vietnam quickly.

Experts say that the State should choose to support industries or enterprises that have demonstrated at least their competitiveness in the initial stages. The role of the State is to support and help enterprises have a higher launch pad and more energy through financial mechanisms, research and development fund mechanisms, and institutional support mechanisms.

At that time, businesses and industries began to break through to mature and lead the economy, instead of lacking conditions and remaining stagnant or even gradually failing.

With the view that the State plays a constructive role, society will be formed, Associate Professor, Dr. Bui Tat Thang believes that this is the foundation to help form a new economic structure and a new growth model, in which relationships have a more reasonable ratio.

Currently, we should not emphasize too much on restructuring the old model and must have a new mindset, establish a new economic structure model, in order to achieve sustainable development speed, including industry structure, technology structure, development space structure of the entire economic system; territorial space includes both mainland and islands, including forests, plains, urban and rural areas.

“In short, we need a completely new way of thinking about structure, economic structure as well as supporting institutional structure, to hope for rapid and sustainable development for the country,” Associate Professor, Dr. Bui Tat Thang stated.

Source: https://hanoimoi.vn/can-tu-duy-moi-de-xac-lap-co-cau-kinh-te-phat-trien-ben-vung-698552.html