The third Annual Vietnam Reform and Development Forum (VRDF 2020) takes place in Hanoi on September 29. (Photo: VNA)Hanoi (VNA) – Though Vietnam has doneexceptionally well in quickly containing COVID-19, the pandemic has takenunprecedented toll on its economy. However, it is notable room for the countryto further accelerate reforms and climb up global value chain to meet itslong-term development goals, heard at a forum on September 29.
The third Annual Vietnam Reform and Development Forum (VRDF2020) was co-held by the Ministry of Investment and Planning and the World Bank(WB) in Hanoi to discuss how to harness opportunities emerging from the COVID-19 tosupport a robust recovery and sustain long-term growth.
In his remarks at the event, Minister of Investment andPlanning Nguyen Chi Dung said despite the negative economic impact of COVID-19,Vietnam’s GDP grew 2 percent in the first half of this year and FDI inflowsinto the country are bouncing back after being stagnant in the first few monthsof the year. Vietnam was the 12th strongest financially out of 66emerging economies following the devastation caused by the pandemic, he added.
To protect its development gains, Vietnam must be wellprepared for strong recovery and make most of the new emerging opportunities,according to Dr. Vu Thanh Tu Anh, Senior Lecture at HCM Ciy-based FulbrightSchool of Public Policy and Management.
Anh pointed out the fact that despite being one of the mostopen economies in the world, Vietnam’s participation in global and regionalvalue chains remains limited. Vietnam’s level of participation in global supplychains remains well below its ASEAN peers, such as Singapore, Thailand, Indonesia,Malaysia, and the Philippines, he said, adding that the level of Vietnam’ssophistication in participation remains low, particularly in manufacturing andthe country needs to move up to improve productivity.
Anh cited a WB report as saying that a 1-percent increase in globalvalue chain participation boosts per capita income levels by more than 1percent – about twice as much as conventional trade, so strengthening globalvalue chain participation will be important for accelerating Vietnam’sproductivity and growth.
He suggested that in the short-term, the diversification ofmultinational corporations depends on the recovery prospects of alternative production bases. “In themedium-term, being well-prepared for the ‘new normal’ of global value chains isimportant,” he said. “Supply chains cannot be established overnight, andcompanies still have to overcome the expensive and time-consuming process of relocation."
For that, Vietnam can take measures to enable strongerlinkages between FDI and domestic enterprises. In the longer-term, Vietnamneeds to narrow the productivity gap and move towards the productivity frontier,he stated./.
VNA
