Việt Nam’s 2021-25 economic restructuring plan needs drastic action amid challenges

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Phan Đức Hiếu

Restructuring the economy is an important and urgent issue for Việt Nam, especially as the Government is endeavouring to innovate the growth model for rapid and sustainable development as well as taking advantage of opportunities post-pandemic. Phan Đức Hiếu, a standing member of the National Assembly’s Economic Committee, shares his view on Việt Nam’s economic restructuring plan for the 2021-25 period in the Economic Focus programme of Vietnam News Agency Television.

Lawmakers have adopted Việt Nam’s economic restructuring plan for the 2021-25 period. Could you tell us what’s new about this plan?

The economic restructuring plan this time has two noteworthy parts. First, in terms of goals, there is inheritance and extension from the last programme, which means the objectives that we have yet to accomplish will continue to be completed.

Also, in the new plan, we place more emphasis on qualitative changes, focusing on three groups throughout the plan, including institutional reform, digital transformation and innovation. We consider these breakthroughs from which we lay out a number of key tasks – which were mentioned elsewhere but have not yet been considered important – that is forming economic spaces that really promote regional, urban and rural linkages to create growth poles in the urban economic development model.

Second, as we know that the current business trend is leaning towards sustainability, green development and adopting economic models that enhance efficiency and productivity, thus the plan must also focus on these changes.

How do you evaluate the results achieved in the 2016-20 economic restructuring programme?

First of all, I highly appreciate the Government’s objectivity and comprehension in assessing results that we have achieved and not achieved in the last restructuring programme. In the 2016-20 period, we completed 17 out of 22 targets. However, the Government also pointed out five areas that have not attained good results, especially three key restructuring groups including credit institutions, state-owned enterprises and public investment.

There have been positive changes in these areas but they have not really achieved the planned targets. For example, regarding public investment, which we have heard a lot about recently, the ability to absorb capital and the efficiency or the planning of public investment remain big challenges in the completion of the plan, not to mention improving quality and efficiency. Although we have made many positive changes, especially in allocating public investment which is also very scientific and effective, the results have not yet met expectations. Other problems such as state capital divestment and equitisation of state-owned enterprises have also slowed down.

The incomplete tasks are all related to the public sector. How do you assess these limitations?

There are many reasons for this problem, both objective and subjective. I noticed that the Government was very straightforward and pointed out many reasons, including objective reasons and among them, the significant impact of the COVID-19 pandemic on our reform process is undeniable.

But the Government also highlighted subjective reasons that concerned many stakeholders, especially the determination and drastic efforts in the implementation of all ministries and agencies. As we know, the effectiveness of the reform process requires the uniform movement of all relevant ministries and agencies, where if one agency does well and the others do not, the results will obviously fail to meet expectations.

The 2021-25 economic restructuring plan comes as the global economy and Việt Nam face great changes, especially the COVID-19 pandemic. How does this create challenges in implementation?

I think it’s very challenging, but here it has to be seen broadly that challenges accompany opportunities.

First of all, the challenges from the last plan may still exist and remain obstacles if we do not make improvements or take more drastic action in the implementation stage. So far, we’ve seen that the pandemic is basically under control in the world and all countries have somewhat adapted to the new situation, but unpredictable developments are still expected, so this is still a challenge in terms of execution.

However, in my opinion, there are still many opportunities because we keep seeing that in the past period, it was also due to the impact of the pandemic that we saw reforms, especially institutional reforms, become increasingly important, particularly when the National Assembly and the Government discussed the adoption of a monetary and fiscal policy to support the introduction of the economic recovery programme.

We discussed institutional reform, or the so-called specific mechanisms to make policies come to life in the fastest, most effective and fairest way. This requires a lot of reforms, so here’s the opportunity that reform is the right thing to do, especially under pressure both from practice and the heads of the National Assembly and the Government.

One of the important parts of this reform programme is speeding up digital transformation and innovation. What solutions are needed in this regard?

Digital transformation and innovation are clearly regarded focal tasks in this plan. Implementing this group is not just about restructuring the economy but concerning the overall programme related to digital transformation and innovation promotion. However, in the process of economic restructuring, the State, Government and agencies play a very important role in organising implementation, but good results cannot be achieved if there is no movement and change from the two sides – the state agencies and the business community.

For state agencies, it is very important to organise the implementation at a fast and timely pace, but the process also requires movement from businesses. Enterprises must be active and proactive because this reform is first of all for their benefit. If the two parties move together, cooperate and resonate, the results will be very good.

What suggestions do you have for this plan to be implemented effectively?

I know that the Government is working hard and endeavouring to develop a detailed action plan which I hope will be introduced soon as it is the gauge for ministries, stakeholders and even the business community to develop their own action plans.

In the meantime, the relevant ministries and agencies can also work to develop their detailed programmes so that when the government’s plan is introduced, ministries and agencies can immediately issue theirs.

Besides, the tasks needed to develop the economy are varied, so in my opinion, we should organise the implementation in a cohesive and inseparable system so that ministries and agencies can implement these tasks in an overall programme to have more effective results.

The last thing I really want is to have great pressure for effective enforcement; the oversight of society and stakeholders are also very important. Therefore, relevant agencies such as the Fatherland Front, business associations, and Việt Nam Chamber of Commerce and Industry are encouraged to promote their responsibilities in supervision. — VNS

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