Ho Chi Minh City enters the new year 2024 with negative impacts from the outside and limitations and shortcomings from within; advantages and difficulties, challenges intertwine but challenges are greater.
How can the "economic locomotive" Ho Chi Minh City overcome challenges and return to the development trajectory? VietNamNet reporters had an interview with Dr. Truong Minh Huy Vu, Deputy Director of the Institute for City Development Studies, about this issue.
'Overcome yourself'
- In the first quarter of 2023, Ho Chi Minh City's economy "hit rock bottom" with a growth rate of 0.7%, but by the end of the year it reached its destination with a growth rate of 5.81%. What does that number say, sir?
Dr. Truong Minh Huy Vu: Although the city's economic growth in 2023 did not reach the set target (7.5-8%), Ho Chi Minh City is still the locality with the highest budget revenue in the country, estimated at 446,545 billion VND, equivalent to 95.07% of the estimate. This is a result that shows the city's comprehensive efforts.
Because in 2023, the impact from the external context and global conflicts will cause the raw material area, distribution area, and consumption area to all be broken; the replacement capacity, although there is, is still not enough.
Those impacts caused Ho Chi Minh City's economy in the first quarter of 2023 to hit rock bottom with a growth rate of 0.7%. However, with the relentless efforts of the entire city and reasonable solutions, the economic situation gradually increased each quarter and reached the year-end milestone of 5.81%.
This is not a race for targets, but the issue is to comprehensively review the targets that have not been met, review whether the budget collection is correct and sufficient, whether there is any evasion, trade fraud, smuggling to have direction...
Of course, that is also a big challenge for 2024 for the city to continue to surpass itself and fulfill its tasks with the national budget.
- “Surpassing oneself” has been the mindset of Ho Chi Minh City throughout its development over the past 50 years. So, in 2024, what will the city focus on to return to its inherent development trajectory?
The most important solution now is to stimulate aggregate demand.
To stimulate aggregate demand, it is possible to affect four components: Domestic consumption, investment (both public and private investment), government spending and purchases, and net exports.
Of the four factors above, domestic consumption is the solution that can help the city escape the current economic stagnation and create the driving force to maintain sustainable development in the long term.
Ho Chi Minh City has a stronger tendency to “consume” than other places due to its large population and the highest average income in the country. The city is also a locality that demonstrates the potential and purchasing power of the market.
Promote credit shopping
- But to stimulate domestic consumption, some tools such as tax cuts or subsidies are often used, but these tools are beyond the city's authority. So, in your opinion, how do we resolve this?
Yes. So the city needs to design similarly effective policy tools to increase the disposable purchasing power of its citizens. Credit shopping is an effective tool that many countries have adopted.
Credit can help consumers have more disposable income in the short term and increase their shopping needs.
For high-value items, beyond the consumer's ability to pay immediately, credit shopping programs such as interest-free installment purchases or credit cards with various denominations will help consumers have the ability to spend immediately.
In addition, it is necessary to create online shopping channels to connect buyers and sellers on a large scale.
To achieve this effectively, e-commerce is the key direction, specifically online shopping programs. This model is booming strongly with the city government in 2023 taking the lead in organizing many different promotional activities and events.
- In the first quarter of 2024, what should and needs the city do for that campaign?
Ho Chi Minh City is planning to organize Tet fairs/events combining shopping and promotions to stimulate consumption, tourism and entertainment at the end of the year.
These events will integrate live and online formats. Promoting events and livestream sales markets is not just a support tool, but must be a "main front" for trade, service and tourism exchanges.
These activities go hand in hand with focused promotional programs, from issuing vouchers and discount coupons for workers and students to promoting consumer credit channels.
Credit shopping programs, such as interest-free installment purchases (for 10 or 12 months); credit cards with various denominations, enable people to spend immediately during the peak Tet holiday period.
In the immediate future, it is necessary to "embed" digital content and e-commerce on social networking platforms into existing credit - loan programs and bank - business connections.
In addition, trade and tourism activities between Ho Chi Minh City and other regions of the country have been strongly promoted in the past 2 years, especially in the Southeast and Mekong Delta regions, which are the focal points of commodity transactions.
- In the long term, what do you think should be prioritized to stimulate domestic consumption?
Future results start with current actions. As early as 2024, it is necessary to strengthen consumer confidence in ensuring the quality and origin of goods; enhance the ability to prevent tax losses and prevent smuggling from items sold online.
Continue to implement the project to turn the city into the largest "e-commerce center on social networking platforms" in Vietnam.
Projects to restructure wholesale markets and traditional markets are being developed and need to be implemented in practice; as well as surveying the "adaptation and transformation" process of retail and distribution units in the face of the strong wave of e-commerce.
Along with that, moving to “phase 2” of the regional connection and linkage task on trade promotion. That is promoting investment to complete the logistics - transportation system and apply digital technology. This is the foundation for forming a “HCMC regional consumption market” when market information, goods and services can be easily traded and transported, linked together in a fixed time.
With the goal of "Determination to effectively implement Digital Transformation and Resolution No. 98/2023/QH of the National Assembly", in 2024, Ho Chi Minh City will develop 18 main socio-economic development targets in 2024 with 5 economic targets; 4 social targets; 4 urban targets; 2 targets on administrative reform and 3 targets on national defense and security. Some important targets include: GRDP from 7.5-8%; 100% completion of state budget revenue target; total tourism revenue of 190 trillion VND and 6 million international visitors; 100% of information technology infrastructure reviewed and upgraded. Top in the group of 5 provinces/cities leading in provincial digital transformation index. Striving to put into operation 3 gateway hospitals. Striving for 100% of administrative procedures to meet the requirements of providing online public services throughout the process. |
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