What advice do experts give to help Ho Chi Minh City escape the middle-income trap?

Standing Committee of Ho Chi Minh City People's Committee chaired the scientific conference - Photo: HUU HANH

On the morning of August 24, speaking at a scientific conference to consult on the orientation of socio-economic development in Ho Chi Minh City in the period of 2026-2030, Mr. Phan Van Mai - Chairman of Ho Chi Minh City People's Committee - said that Vietnam must escape the middle-income trap in the next 10 years, otherwise there will be no more opportunities. And Ho Chi Minh City must take the lead in this.

Ho Chi Minh City seeks solutions to escape the middle-income trap

Mr. Mai suggested that experts base on the task groups assigned to Ho Chi Minh City by the Politburo in Resolution 31 to suggest directions and tasks. From there, Ho Chi Minh City will propose solutions to overcome challenges in growth, not set safe goals and then go around in circles.

The head of the Ho Chi Minh City government said that according to many organizations, Vietnam has 10 years to escape the middle-income trap. In this regard, Ho Chi Minh City must be the leading locality and join the whole country in escaping the middle-income trap.

"According to the assessment, if Ho Chi Minh City cannot escape the middle-income trap in the next 10 years, it will be very difficult to have another opportunity," said Mr. Mai.

To do this, the Chairman of the Ho Chi Minh City People's Committee said that the city must persist in the target of an average growth of 9% in the 2025-2030 period. The solutions he proposed include mobilizing social investment capital, increasing capital absorption capacity, restructuring the economy and improving the implementation capacity of the team...

According to Resolution 31, the target by 2030 is that Ho Chi Minh City's average growth must reach about 8-8.5%/year, GRDP per capita must be about 14,500 USD, and the digital economy must contribute 40% to GRDP.

Dr. Tran Du Lich gives comments at the workshop - Photo: HUU HANH

Speaking at the workshop, Dr. Tran Du Lich - member of the National Financial and Monetary Policy Advisory Council - assessed that Ho Chi Minh City has not yet made a breakthrough in economic restructuring to participate in the production stage with high added value. Industrial parks, export processing zones and industries have not created a difference in productivity, and the technology content in the value structure is still low.

Recently, Ho Chi Minh City has been trying to resolve projects and constructions that have existed for many years, but most of them are stuck in legal issues, so the results are still limited, causing waste of resources...

Mr. Tran Du Lich said that the city strives to achieve growth of 7.8% in 2024 and 8.5% in 2025. In the period of 2026-2030, it is necessary to increase public investment and attract private investment, striving to achieve total social investment of 35% of GRDP. Labor productivity must increase by 7-8%/year during this period.

Besides, the city needs to actively transform digitally and industrially to create a breakthrough in labor productivity...

Attracting social investment is very important.

Mr. Nguyen Khac Hoang - Director of Ho Chi Minh City Statistics Office - speaking - Photo: HUU HANH

According to Mr. Nguyen Khac Hoang - Director of the Ho Chi Minh City Statistics Office, in recent years, the labor force in Ho Chi Minh City has increased but labor productivity has tended to decrease.

"There is a feeling that labor productivity is saturated without strong motivation. If we want to overcome the middle-income trap, we must increase labor productivity," said Mr. Hoang.

The Director of the City Statistics Office said that if the labor structure is shifted between industries, it will no longer be effective, so economic shifts within industries should be encouraged.

Besides, the efficiency of investment capital is on a downward trend. If in the period 2011-2015, 1 dong of public investment capital disbursement could attract about 6-7 dong of non-state investment, then in this period it is only about 5 dong. Mr. Hoang said that it is necessary to re-evaluate the efficiency of current investment capital, because this is one of the reasons for the decrease in the average income per capita of the city.

Mr. Hoang suggested that Ho Chi Minh City study the restructuring of export processing zones and industrial parks, and develop Ho Chi Minh City into service, trade, cultural, medical, and educational centers for the country and the region.

Associate Professor, Dr. Tran Hoang Ngan - Assistant to the Secretary of the Ho Chi Minh City Party Committee - gave his opinion - Photo: HUU HANH

Associate Professor Dr. Tran Hoang Ngan - Assistant to the Secretary of the Ho Chi Minh City Party Committee - said that in the period of 2011-2015, the total social investment capital of Ho Chi Minh City was 1.1 million billion VND, an average of 238,000 billion VND per year. In the period of 2016-2020, the social investment capital was 1.9 million billion VND, an average of 390,000 billion VND per year. But in the past 3 years, the average per year was only about 335,000 billion VND.

"Investment capital is a lever, determining 40% of growth. If capital decreases but GRDP still increases, then capital use efficiency is very good. But the problem here is that capital decreases but growth is not equal to previous years, so efficiency must be reconsidered. The solution to increase social investment capital is very important," said Mr. Ngan.

In addition, Mr. Ngan said that from now until the end of 2025, Ho Chi Minh City must try to spend 170,000 billion VND on public investment to stimulate social investment capital. If all of this is disbursed, it will create economic and social infrastructure, serving as a launching pad for growth.

Ho Chi Minh City needs to attract 4.4 million billion VND in social investment capital in the 2026-2030 period.

Chairman of the Ho Chi Minh City People's Committee Phan Van Mai said that to achieve the growth target of 8.5-9% by 2030, Ho Chi Minh City needs 4.4 million billion VND of social investment in the 2026-2030 period. Thus, each year Ho Chi Minh City needs about 800,000 - 900,000 billion VND.

Mr. Mai believes that Ho Chi Minh City is fully capable of doing this, but the core issue is to identify the source from the beginning and have a policy mechanism to attract social resources. Mr. Mai suggested that the Ho Chi Minh City Department of Planning and Investment and other departments and branches research and propose practical solutions.

Source: https://tuoitre.vn/chuyen-gia-hien-ke-gi-de-tp-hcm-thoat-khoi-bay-thu-nhap-trung-binh-20240824130522206.htm