Institutional reform deemed crucial for economic growth

09:34 | 14/06/2018 Society

(VEN) - While Vietnam’s indexes have improved significantly, and the economic outlook for 2018-2020 is looking up, institutional reform is one of the top priorities for accelerating economic growth in the short and long term. This was the bottom line of a seminar held on May 15 in Hanoi to discuss directions for Vietnam’s economy.

institutional reform deemed crucial for economic growth

In the first quarter of 2018, gross domestic product (GDP) growth reached 7.38 percent, the highest first-quarter increase of the past decade; an estimated US$5.1 billion in foreign direct investment (FDI) was disbursed, up 6.3 percent from the same period last year; and the trade surplus reached about US$3.39 billion.

Minister of Planning and Investment Nguyen Chi Dung told participants these were encouraging signs, reflecting the country’s deepening integration into international economic communities. Dung pointed to additional achievements, among them efficient reform and innovation policies, an improved business environment and stronger domestic demand, and positive impacts of free trade agreements (FTAs). However, to ensure all targets are reached, authorities at all levels and all economic sectors must increase their efforts, he added.

Seminar participants agreed that institutional reform is the core and most important factor to motivate economic growth. Phan Duc Hieu, Deputy Director of the Central Institute for Economic Management (CIEM), said institutional reform is lagging behind the business sector’s expectations. While the government has ordered the elimination of much red tape since August 2017, few ministries and sectors have seriously implemented this direction, Hieu conceded.

He said the quality of legal documents must be improved and a more favorable business environment created. Hieu added that an important element of institutional reform requires changed thinking not only of senior officials but also of staff members in organizations.

Nguyen Anh Huy, General Director of the Thaioil Group, said Vietnam needs to adopt a legal framework to facilitate international trade if it is to attract big investors. Stable, consistent and favorable conditions and institutions are essential in attracting foreign investors, Huy said.

Bui Tat Thang, Director of the Ministry of Planning and Investment’s Development Strategy Institute (DSI), said

although it has progressed, institutional reform has mostly improved in terms of efficient problem solving. This is the

first stage, and the second phase requires a switch on the part of institutions to a more service-oriented approach.

Hai Linh