Communist Review - Being at a key turning point for rapid and sustainable development, Viet Nam needs to set proper targets and pathway to realize the 10-year Socio-Economic Development Strategy (2021-2030 period) and the 5-year Socio-Economic Development Plan (2021-2025 period).

35 years of Doi Moi in Viet Nam has seen relatively impressive development, which is manifested in several great, comprehensive and historic achievements. The current economy is 40 times larger than the 1990’s. The material and spiritual living standards have been significantly improved. Never before has the country enjoyed the current wealth, potential, position and prestige. However, there are various difficulties and challenges persisting within the economy.

Firstly, Viet Nam is still in the lower-middle-income group, far below the world average. In 2019, although the gross domestic product (GDP) per capita reached 2,715 USD, the gap between Viet Nam and other countries was not significantly narrowed. To be more specific, this figure was only 50% the average of the middle-income group and 4.4 times lower than the world average of 12,000 USD.

Secondly, the foundation for fast and sustainable economic growth has basically been formed but unstable. The pace of industrialization and modernization remains slow without the participation of fundamental industries (mechanics, manufacturing, materials), core technology and source technology. In addition, the role of the state-owned economic sector has not well realized in this field.

Thirdly, major processes, including economy restructuring, strategic breakthroughs implementation, growth model renovation, labor productivity, economic autonomy, adaptability and resilience improvement have changed but slowly and without clear results.

Fourthly, traditional low-efficient factors are still widely exploited, such as investment increasement, labor intensification, and the heavy dependence of the economic growth on the foreign direct investment sector (FDI).

Fifthly, competitiveness, especially the important criteria for sustainable future development, is still at the world average. Export, trade and investment heavily depending on FDI enterprises account for 70% of the country's total export turnover, while FDI accounts for more than 50% of industrial production. Moreover, supporting industries have not yet developed and not well connected to the FDI sector. Besides, intermediate inputs still depend on several markets.

Sixthly, there remain numerous issues in policy formulation and implementation, including unsynchronized, inconsistent and overlapping legal provisions, slow and weak and policy implementation.

Development mindset and vision

Economically, to seize the opportunities, take advantage of the country's position and power, and keep in pace with global development, one of the major solutions is to innovate development mindset and vision, which is clarified as follows:

Firstly, a new positive way of thinking and approaching is of paramount importance, especially in the post COVID-19 pandemic period. The pandemic has profoundly changed the economic structures (production, trade, investment, etc.) and the world order. Therefore, thanks to its successful disease control and stable environment, Viet Nam will stand the chance of taking a quantum leap.

Secondly, there should be accurate and timely policies. It is essential for the reformation and restructuring of sectors, fields and the whole economy to be sped up. Furthermore, investment in infrastructure, competitiveness, high-quality human resources training, digital transformation, science - technology, and innovation need to be enhanced. These will enable Viet Nam to immediately adapt to the new order, without falling behind or being an outsider in the upcoming game.

Thirdly, connectivity and sharing enhancement are two important requirements to integrate and adapt to the rapid changes of the Fourth Industrial Revolution. Therefore, decisions should be made accurately and timely, of which people's awareness is both the subject and the target of. Accordingly, it is mandatory for state policies to revolve around or focus on people’s happiness.

Fourthly, it is of necessity to maintain a harmonious relation between stability and development. Stability is a prerequisite for rapid development, while rapid development is essential for stability. The combination is to promote the country's rapid and sustainable development and build an economy of high autonomy in the context of extensive international integration.

Fifthly, human resources should be utilized for development, especially in the "golden population structure" period. Resource allocation should be done in association with efficiency and market mechanism; economic growth should go hand in hand with solving social problems and ensuring social justice. A favorable environment should be created, especially regarding institutions and resources, to enable rapid development in dynamic regions, which will in turn enhance development in others towards long term balance. Rapid growth should mainly rely on dynamic regions, green and smart cities, especially large ones. International financial hubs should be built and formed in Ho Chi Minh City and Da Nang City to take advantage of the global movement of capital flows and be able to compete with global and regional financial centers.

Sixthly, issuing consistent policies on capital accumulation, using capital economically and effectively, reducing recurrent expenditures, and increasing spending on large and essential infrastructures. Regions of harsh natural conditions, which are unfavorable for investment attraction and economic development, should focus on the central and persistent political mission of protecting territory, forests and people (ensuring national defense and security, protecting sovereignty over sea and islands and territorial integrity; maintaining social order and safety; creating employment, generating incomes and enhancing people's material and spiritual well-being) without placing too much emphasis on economic development and budget revenue improvement.

Seventhly, national management and governance should be changed from mainly controlling and allowing (pre-inspection) to mainly supporting development (post-inspection). What’s more, an appropriate legal framework should be gradually formed to promote creativity and development.

Eighthly, regarding public debt management, the efficiency of use and debt repayment capacity should be considered the core measurements, instead of the public debt ceiling, as many developed countries have a relatively high public debt-to-GDP ratio, such as Japan with over 200%, USA with over 100%. An emphasis should be placed on promoting growth to increase GDP and thereby reducing the public debt rate, rather than on controlling the public debt rate without paying attention to investment and development to increase the size of the economy.

Ninthly, agriculture should be developed smartly, efficiently and sustainably, toward high-efficient agriculture. And productivity optimization should go hand in hand with product optimization.

The Communist Review, online version ( August 20, 2021)