World Bank rep lauds Vietnam’s economic stability

09:04 | 23/02/2019 Cooperation

(VEN) - Ousmane Dione, Country Director for the World Bank (WB) in Vietnam, shared his views on the Vietnamese economy with Vietnam Economic News’ Nguyen Huong. He said he was impressed by Vietnam’s economic development and believes the country would achieve even greater success if it accelerated reforms.

world bank rep lauds vietnams economic stability
Ousmane Dione, Country Director for the World Bank (WB) in Vietnam

In a recent semiannual report on Vietnam’s economic development, the WB forecast Vietnam could realize its economic growth target of 6.8 percent for 2018. What impresses you about the growth of the Vietnamese economy?

The results Vietnam achieved in 2018 were impressive in the context of hard-to-predict changes in the global economy. In our semiannual report on the Vietnamese economy in the first half of 2018, our growth forecast for Vietnam was 6.3 percent. However, we had raised this forecast to 6.8 percent, while maintaining our forecast for new emerging economies in East Asia and the Pacific at 6.3 percent. In fact, Vietnam even achieved a growth rate of seven percent in the second half of 2018.

I was impressed by Vietnam’s successful efforts to maintain macroeconomic stability and low inflation, especially in the context of many other middle-income countries, such as Turkey and Argentina, facing crises, and the domestic legal framework restricting the implementation of major projects due to slow disbursement.

Vietnam is capable of withstanding external “shocks”. It did not suffer the adverse impact of recent trade tensions and even took advantage of this situation to achieve higher growth. This is a prerequisite for Vietnam to stand firmly against new challenges, which has a positive impact on investors.

Vietnam has signed various free trade agreements (FTAs), including two new-generation FTAs: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA). What do you think of Vietnam’s ability to implement its commitments?

First, I would like to emphasize Vietnam’s important role in promoting the signing of the CPTPP, especially its hosting of the meeting of the trade ministers of 11 Asia-Pacific countries on the sidelines of the 2017 APEC Summit in the city of Da Nang.

These FTAs have contributed to increasing investor trust in Vietnam. The implementation of commitments to the CPTPP and EVFTA will create excellent opportunities for Vietnam to take a shortcut to reform and development like other countries. Competition also creates a motive for Vietnam to further its reform efforts.

However, reforms cannot be carried out overnight. They are a process. The question is not what to do but how to do it. For example, if Vietnam deals with bankruptcy procedures or matters related to the reorganization of state-owned enterprises and state capital withdrawal according to international standards and with strong determination, it will succeed in implementing commitments to the two FTAs.

world bank rep lauds vietnams economic stability

What do you think Vietnam should do to achieve the 6.6-6.8 percent growth target set by the National Assembly for 2019, in light of the difficulties facing the global economy?

In my opinion, Vietnam needs to keep a close watch on the trend of the global economy and take advantage of opportunities. It should get ready to cope with external “shocks”. In addition, Vietnam needs to continue accelerating reforms, especially in the field of banking and bad debt treatment. Policy makers should make the most of favorable conditions to promote economic restructuring in order to increase private investment along with improving public investment efficiency.

Successful implementation of these tasks will enable Vietnam to achieve the 6.6-6.8 percent economic growth target set by the National Assembly for 2019, or even a higher growth rate.

However, I think Vietnam needs to pay greater attention to the quality of reforms rather than quantity. Specifically, it should concentrate on increasing investment in education, science, technology and improving the quality of human resources, especially the digital workforce.

Further, Vietnam needs to attract quality foreign investment projects, especially in the fields of science and high technology. In the electricity sector, for example, Vietnam can encourage private investment in clean energy resources, such as solar power, wind power and bio-energy. The country should pay greater attention also to urban infrastructure development and improving the quality of farm produce.

Nguyen Huong