Vietnam targets sustainable growth

Impressive results

Gross domestic product (GDP) growth in the first quarter of 2018 reached 7.38 percent, the highest growth rate for the first quarter over the past decade. The industry and construction sectors posted a 9.7 percent growth rate, with the manufacturing and processing industry contributing a 13.6 percent growth to this surge. The agro-forestry-fishery sector increased by 4.05 percent, while the service industry climbed 6.7 percent in the January-March period. Foreign direct investment (FDI) projects in Vietnam disbursed US$5.1 billion during the first four months, a year-on-year increase of 6.3 percent.

Trade value reached US$144.13 billion for the first four months of the year, a year-on-year rise of 14.4 percent, with exports accounting for US$73.76 billion, up 19 percent compared to a year ago. Import turnover was calculated at US$70.37 billion, up 10.1 percent compared to the same period last year, resulting in a trade surplus for the first four months of US$3.39 billion.

Vietnam’s business and investment environment has also improved, with business and investment procedures reduced by administrative reforms to create favorable conditions for business development. In the first four months of the year, the number of newly established enterprises topped 41,000, and over 11,000 businesses resumed operations.

Big challenges

Despite high GDP growth in the first quarter, growth drivers like those of 2017 will be difficult to repeat. The imposition of anti-dumping tariffs on Tra fish by the United States, trade tension between the US and China, and the need to tighten quality control and food safety and hygiene may affect Vietnam’s trade activities.

In addition, the manufacturing and processing industry appears to be experiencing a slowdown, while the mining sector is facing difficulties. Domestic products are facing tough competition with imported goods, both in price and quality. Excess of fruit and vegetables in some localities has pushed down prices. Most Vietnamese businesses are mainly small and medium-sized, with low competitiveness. Technology application and administration remain weak, while capacity to participate in the regional and global value chains remains low. Some ministries have failed to introduce administrative reform, while equitization of state-owned enterprises remains slow.

There are limitations and inadequacies in policymaking, too. The implementation, propagation and dissemination of legal documents in some areas remain limited. Building e-government and deploying national database are slow. The rate of providing online public services remains low.

Focusing on key tasks

In order to bring into play advantages and overcome shortcomings, the government has formulated key tasks to promote economic development in the remaining months of 2018 and the following years.

The government is directing all levels, especially ministers, heads of ministerial-level agencies and chairmen of provincial people’s committees to be aware of their responsibilities and thoroughly grasp the spirit of “discipline, integrity, action, creativity and efficiency”. They are asked to continue rapidly implementing the tasks set forth in the resolutions of the party, the National Assembly and the government, to be active in monitoring the domestic and international situation so as to provide appropriate policies and solutions promptly and to closely monitor work progress. All senior officials are told to take the initiative in settling problems, resolving difficulties and obstacles in sectors and domains under their authority and to create driving forces for socioeconomic development.

Ministries, sectors and localities are urged to implement effectively the objectives of macroeconomic stabilization, inflation control, and economic growth promotion.

Also among the tasks assigned are effective implementation of export promotion measures, strengthening trade promotion and market expansion, simplifying administrative procedures, deploying trade remedies and technical barriers in accordance with international commitments; enhancing import control; and improving the situation of trade deficit with key partners.

The government also urges strong development of the domestic market, building a synchronous and efficient distribution system, promoting links between businesses, distributors and farmers, strengthening market management and preventing trade fraud and smuggling.