Vegetables grown in a glass house (Photo VNA)

Hanoi (VNA)♑ - The Vietnamese economy urgently needs to find new driversfor growth in the period from 2018-20 to achieve rapid but sustainabledevelopment, Deputy Prime Minister Vuong Dinh Hue said at a conference held bythe Vietnam Academy of Social Sciences in Hanoi on November 15.

Hue said that the economy was growing butuncertainty about the future lingers, given the challenges posed by tradeliberalisation, technological change, the impacts of climate change andconstraints on fiscal and monetary policies. “There’s no other way but to transform to aninnovation-led growth model and hasten economic restructuring,” he said. “We’vetalked a lot but little has been done.” Vietnam has strengths in many sectors, such asagriculture, the digital economy and tourism. “But if we choose too manysectors to be spearheads, there will be no spearhead at all,” Hue said. “Willagriculture be the new driver?” Hue also expressed concerns about the lack oflinkage between the foreign direct investment (FDI) and domestic sectors,adding that there was disparity in the developments of the two sectors. The policies for attracting FDI must aim atpromoting the domestic sector and establishing value chains to prevent thedevelopment of two sectors in one economy, or even two economies in onecountry, he said. In addition, he said, there is a lack ofindicators to evaluate growth quality, as statistical figures still lackedreliability. Tran Dinh Thien, Director of the VietnamInstitute of Economics, said Vietnam should not chase growth targets everysingle year but rather focus on the growth quality of a whole period. “The newperiod will need new drivers,” Thien said. “We need comprehensive changes inthinking and methods.” Targets should be based on the internationalcommitments and technology advancements, he added. Thien added that the most important goal isbuilding a transparent Government. According to Sebastian Eckardt, the WorldBank’s Lead Economist for Vietnam, the Vietnamese economy was experiencinga cyclical uptick in growth accompanied by macroeconomic stability. But it alsofaces emerging structural headwinds, including slower labour force growth,weaker investment and lower productivity growth. Vietnam should take advantage of cyclical uptickto strengthen macroeconomic resilience and enhance structural reforms to boostproductivity growth and lift potential growth, he said. Eckardt said that it was critical to enhance thebusiness environment, deepen State-owned enterprise reforms and developeffective factor markets to modernise institutions and create a level playingfield, including for the domestic private sector. Besides, investing in people and innovation isimportant to meet the demands of a modern industrial and increasinglyknowledge-based economy, he said. According to Nguyen Dinh Cung, Director of theCentral Institute for Economic Management, ministries should abolish at leastone third to half of existing business prerequisites in 2018. They should alsocut in half the number of items subjected to specialised checks for import andexport. “2018 should continue to be the year of costcutting for businesses,” Cung said, adding that further cuts in interest ratesand logistics costs must be put into consideration.-VNA