Finding new momentum for Vietnam's economy

Promoting divestment of state-owned enterprises

Economist, Dr. Phung Duc Tung, Director of the Mekong Institute for Research and Development, said that the Government is raising the issue of maintaining and setting a double-digit growth target; boosting public investment, especially faster infrastructure development; resolving institutional bottlenecks, creating an open operating environment for enterprises (DN) with the purpose of what the State does not prohibit, enterprises and people have the right to do. Mr. Tung emphasized: "These issues are not entirely new, but in the current context, these are important issues, creating growth momentum. In particular, I focus on exploiting and boosting public investment".

According to experts, promoting public investment is the driving force for growth. In the photo: Long Thanh airport passenger terminal under roof construction

PHOTO: LE LAM

Dr. Phung Duc Tung wondered: "If we accelerate public investment further, where will the investment capital come from? There is one important thing that has not been mentioned and clarified in the ideas to unblock the driving force. That is to divest all state-owned enterprises. Our market economy development strategy has long set out a plan to divest state-owned enterprises, especially those in fields unrelated to national security. Currently, the resources from state-owned enterprises are extremely large. According to the Ministry of Finance, the value from this sector reaches over 400,000 billion VND, equivalent to nearly 20 billion USD. If we divest, the national budget will collect a large amount of finance, enough to solve major national problems, helping to grow strongly. In history, we have divested from some very successful state-owned enterprises such as Vinamilk, Sabeco... When state-owned enterprises are operated by the private sector, they will certainly be more efficient, even helping to collect higher taxes, contributing to GDP growth.

That is also the goal set by the state, that is what the private sector can do, not related to national security, the state should not keep it. It should be noted that enterprises that have divested capital should not keep a few dozen percent of state capital anymore, that is not necessary. The money earned from this divestment continues to be used for public investment, infrastructure development without having to borrow much from abroad, helping the economy grow better. Thus, this is an important driving force to help the economy grow by double digits."

Dr. Phung Duc Tung cited that state-owned enterprises in fields such as chemicals, mining, and even electricity can all divest early. Vinamilk still has state shares, so it should divest all of them. Or in the banking sector, the number of banks with large state capital holdings should be reduced. Dr. Phung Duc Tung emphasized: "State divestment must be mentioned and included in the drastic implementation plan for the next 5 years. It must be done more drastically, not just selling a few dozen percent of state capital and then saying it's done."   After divesting, we must go into substance. We must let the private sector hold a large proportion, let the private sector participate in operations and decisions according to world standards and practices, have better profits, help attract foreign investment to increase faster. Besides, help resources for infrastructure investment become more abundant."

Boost export market, accelerate domestic market

According to the General Statistics Office, 2025 is the final year of the 2021-2025 medium-term public investment plan, with a record public investment of up to VND 791,000 billion (equivalent to 6.4% of GDP) approved by the National Assembly. The Government has clearly stated that this year's public investment plan continues to have many innovations, in which priority investment will be focused on important and key sectors and fields of the economy, allocating concentrated capital for important national and key transport projects with spillover effects, promoting socio-economic development...

Associate Professor, Dr. Nguyen Thuong Lang, senior lecturer at the Institute of International Trade and Economics, commented: If public investment disbursement is increased by 10% compared to last year, it will also help the economy grow much better. However, it is necessary to create a playground for private capital to flow into innovation through the financial market. Previously, private capital flowed into gold and savings were very large. "We should not let money sleep, do not let people fall asleep in the mindset of saving. It is very necessary to stimulate consumption and create a playground for private capital to participate," Mr. Lang proposed.

This expert also believes that if we just renew the existing driving forces, exploit them more deeply and more intelligently, the growth rate can approach 9%, not from 8% as the Government set. Associate Professor, Dr. Nguyen Thuong Lang emphasized: The driving force of an economy always comes from domestically and internationally. With an international market of over 8 billion people, there is still a lot of room to expand sales abroad.

"Vietnam is one of the countries with a large economic openness. Up to now, Vietnam has signed almost all free trade agreements (FTAs) with important markets from multilateral to bilateral. We often talk about export advantages by expanding markets, bringing key goods to large markets, but it seems that this effort lies in a number of enterprises, is still fragmented, without deep participation and improving the position of Vietnamese goods in the world supply chain at the national level. Our exports of just over 400 billion USD are too small compared to the global market that is spending 7,000 - 8,000 billion USD to buy goods. Thus, the motivation to deeply exploit and improve the position in foreign markets is very large. Second, with the domestic market, in 2024 we will spend more than 380 billion USD importing goods from abroad for consumption and production. The motivation to reduce imports, self-sufficiency in raw materials and goods to serve the domestic market needs to be exploited to the maximum. "Supposing that only 1/4 of that 380 billion USD is spent domestically, we will have nearly 100 billion USD that does not have to flow abroad," Mr. Lang said.

Policies at this time need to focus on supporting workers and businesses in the export sector to increase competitiveness and maintain production even in an unfavorable context. Currently, interest rates are low, so there is not much room for further interest rate reduction. The State Bank may need to prepare a plan to continue extending debt for businesses if necessary.

Dr. Nguyen Duc Do, Deputy Director of the Institute of Finance and Economics (Academy of Finance)

Dr. Nguyen Duc Do, Deputy Director of the Institute of Finance and Economics (Academy of Finance), also agreed: The economic growth target that Vietnam sets for this year and the coming years can be achieved if the world economic context is favorable. In particular, export is the main driving force of the economy, because this is the output of many other industries. In 2024, we will achieve a record export turnover of over 400 billion USD, especially in which many key products have grown beyond expectations. Currently, our biggest advantage is participating in many bilateral and multilateral FTAs. That is the basis for businesses to promote the development of new markets.

However, to achieve the goal, Vietnam needs to prepare plans to support the economy in case the global economic situation suddenly worsens. "Policies at this time need to focus on supporting workers and businesses in the export sector to increase competitiveness and maintain production even in unfavorable circumstances. Currently, interest rates are low, so there is not much room for further interest rate reduction. The State Bank may need to prepare plans to continue debt extension for businesses if necessary," Mr. Do noted.

The government is determined to implement major programs and projects such as the North-South high-speed railway, nuclear power, and attract "eagles" in the technology sector. These programs will have a profound impact on the economy. Enterprises in the fields of infrastructure construction, construction materials such as steel, cement, asphalt, logistics, civil real estate, and industrial production activities are expected to benefit from public investment projects.

Thanhnien.vn

Source: https://thanhnien.vn/tim-dong-luc-moi-cho-kinh-te-vn-18525021020512762.htm