Vietnam: Asia's Rising Star

Dreams and ambitions are necessary, but action is sufficient for the dream of Vietnam becoming an Asian star.

Before Independence Day, September 2, we received a letter from Professor Carl Thayer introducing a book called “Vietnam: Asia’s Rising Star” that he is co-authoring.

In the introduction, Professor Thayer, a Vietnam scholar currently living in Australia, wrote that the authors of the book are primarily interested in one question: Does Vietnam have the necessary elements to become Asia's next tiger economy, and if so, what elements will help Vietnam do that?

In the introduction of the book, the professor does not attempt to answer that key and complex question, perhaps implying that the reader will find out for themselves in the book. However, he writes that “Vietnam’s growth story” has spanned the past three decades. During this period, the Vietnamese economy has grown steadily every year with double-digit trade growth and significant foreign direct investment (FDI).

There have also been some ambitious predictions and statements about the country’s potential. For example, the auditing firm PwC published a long-term forecast report saying that Vietnam will move up 12 places in the GDP rankings to become the world’s 20th largest economy by 2050. The Vietnamese Prime Minister declared that achieving high-income status by 2045 is a national imperative.

Vietnam is entering a new stage of development, with many difficult challenges but also opening up many opportunities.

The aspirations and perceptions that Vietnam is a dragon, a tiger, or a rising star in Asia appeared in many foreign newspapers many years ago, when we joined the WTO, but then fell silent.

Only recently have those optimistic assessments re-emerged. For example, the World Bank (WB) commented: “The sun is still shining in Vietnam.” The International Monetary Fund (IMF) has identified Vietnam as a bright spot “in the gray picture” of the global economy.

The consequences of the Covid-19 pandemic, escalating wars and conflicts have shaken the global economy. Some international organizations have lowered their growth forecasts for Vietnam, but the outlook remains positive.

The Organization for Economic Cooperation and Development (OECD) forecasts Vietnam's economy to grow at 6.5% in 2023 and 6.6% in 2024. The ADB forecasts Vietnam's economic growth at 6.5% this year and increasing to 6.8% in 2024. The WB forecasts Vietnam's GDP growth at 6% in 2023. The IMF has lowered its forecast for Vietnam's GDP growth this year from 5.8% to 4.7%.

Looking back at 2022, Vietnam's GDP grew by 8.02%, among the highest in the world, with a GDP scale of 409 billion USD, rising to 37th place in the world. Import-export turnover in 2022 reached a new record of over 732 billion USD, among the top 20 in the world. The business community has grown to a scale of approximately 1 million enterprises, an unprecedented number in the country's history.

However, with achievements that the world praises, we cannot "rest on our laurels".

To reiterate some interesting figures, for example, there are up to 16-17 thousand businesses “withdrawing from the market” each month. The resilience of domestic businesses, after a long period of being affected by the Covid-19 pandemic, is still weak, many businesses have reached the limit, especially small and medium enterprises.

Since the end of the third quarter of 2022, the economy has encountered many problems due to many sudden policy changes, making it more difficult for businesses in the context of a shrinking world market and declining orders.

The decline in import demand from major trading partners has affected production, especially export production in our country. Garment, leather and wooden furniture enterprises have reported having to reduce production; lay off workers or reduce working hours; export and industrial production indexes have continuously decreased every month in statistical reports on the socio-economic situation.

In 2023, Vietnam's economic growth in the first quarter is low compared to some countries in the region. Specifically, the Philippines is 6.4%, Malaysia is 5.6%, Indonesia is 5.3%, India is 6.1%, China is 4.5%... Growth in the first half of this year only reached 4.14%, much lower than the growth target of 6.5% for the whole year.

Vietnam's economy is currently facing difficulties in many aspects, from the real economic sector to the financial sector, from the private enterprise sector, FDI to the state economy; difficulties come not only from the outside but also from within.

Economist Nguyen Dinh Cung calculated that our country's economic growth is declining rapidly; every 10 years, the average GDP growth decreases by more than 0.5 percentage points.

In the first 10-year period (1991-2000), the average GDP growth rate was 7.56%; in the second 10-year period (2001-2010), it was 6.61%; in the third 10-year period (2011-2020), it was 6%; and currently, the first 3 years of the fourth 10-year period are expected to be 5.6%. If we want to achieve the term target (2021-2025) of an average of 7%, then in 2024 and 2025, we must achieve an average of 9%/year. This is a very challenging task at present.

Vietnam is entering a new stage of development, with many difficult challenges but also opening up many opportunities. With a long-term vision, great ambition, and high determination, Vietnam aims to become a high-income developed country by 2045.

Those goals need to be accomplished as the title of the book “Vietnam: Asia’s Rising Star” suggests. Dreams and ambitions are necessary, but action is sufficient for the dream of Vietnam becoming an Asian star.

According to VietNamNet

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