Regarding the determination of strategic breakthroughs in Vietnam’s socio-economic development strategy for the period 2021 - 2030

ASSOC PROF. DR. BUI VAN HUYEN
Institute of Economics, Ho Chi Minh National Academy of Politics
Monday, January 11, 2021 10:00

Communist Review - The ruling Party and the State need to build a socio-economic development strategy with comprehensive goals, perspectives and solutions for the nation’s prosperous development. In that sense, strategic breakthroughs should reflect macro-level, decisive, strategic choices. Simultaneously, they also imply the impact on key and core stages, issues and contents to successfully implement the country's socio-economic development strategy. Determining "right" and "winning" strategic breakthroughs is of utmost importance to the country's mightiness and prosperity.

Politburo member, Prime Minister Nguyen Xuan Phuc visits an exhibition displaying technology products _Photo: vietnamplus.vn

Several ways to determine breakthroughs in socio-economic development strategy

There are many different approaches to identify breakthroughs in the socio-economic development strategy, with specific advantages and disadvantages of each approach.

Determination of strategic breakthroughs based on priority goals

Based to the prioritized goals, the approach to determination of strategic breakthroughs can be understood as the activities of choosing key stages, contents, and issues that have decisive significance in the successful implementation of the national priority goals.  The approach consists of three contents. The first content is to identify priority goals and arrange them in a pecking order because priority goals at different times are different. However, consistency should be ensured during strategy implementation. The second one is to identify comprehensive solutions and policies for the realization of the goals. The third one is to select the most essential solutions and policies, which decides the success of the goal implementation. In essence, the process of identifying the breakthroughs need to be made completely to achieve established priority goals.

This approach has several advangtages. The proactiveness and the high probability of success can be obtained if the priority targets are oriented and correctly defined. State and social resources are focused on solving key, vital and non-fragmented targets, which easily creates the unity in perception and action of the entire political system.

However, in terms of its own disadvantages, strategic breakthroughs depend on the identification of the priority targets. Therefore, when the incorrect identification of the priority targets may lead to the misidentification of the strategic breakthroughs, loss and waste of resources. In addition, it is easy to meet with negative reactions from groups with different viewpoints and interest when prioritized socio- ecomic and environmental goals are imperatively arranged in a pecking order.

Determination of strategic breakthroughs based on overcoming “bottlenecks”

“Bottlenecks” in management are understood as one or more pinch points that hinder the nation’s socio-economic development, weaken, or partially even completely delay the development, but also obstruct the normal functioning of an economy. A “bottleneck” can be identified in various ways, such as a “bottleneck" in terms of resources, “bottleneck” in socio-economic development institutions, mechanisms and policies, "bottleneck" in the development of economic sectors, "bottleneck" in the development of each market and the whole market, the "bottleneck" in the operation and growth of businesses ... A pinch point in the short-term occurring due to temporary problems is capable of being immediately treated and repaired. A pinch point in the long-term occurring continuously, hindering the efficiency of socio-economic activities in both the short and long periods of time is difficult to be overcome and improved in the short time.

The approach based on overcoming “bottlenecks” is to determine solutions for removing difficulties, breaking down barriers caused by those "bottlenecks”, and then eliminating the "bottlenecks" and promoting socio-economic development. Based to the current state of the economy and the widely held view, the first step of the approach is to identify the basic weaknesses. Because unless the weakness is overcome, the economy will not achieve the strategic goals. The second one is to identify a range of the causes of the "basic weaknesses", after that to propose the system of solutions. The next step is to select the solutions having the greatest positive impacts on the causes from the system of solutions.

The approach offers the advantage of easily identifying the "bottlenecks" in socio-economic activities based on the observation of the performance of the economy, through market feedbacks of enterprises and of investors. The reactions of the market, investors and enterprises to the "bottlenecks" are often quite drastic, creating pressure that requires the state to deal with, so breakthrough solutions for the "bottlenecks" are often real, feasible. Strategic breakthroughs are often specific and aimed at solving pressing problems and real-world obstacles.

However, this approach has several disadvantages. The passive approach causes the state to be in a responsive position in dealing with shortcomings, barriers in practice. The identification of "bottlenecks" in the long term often encounters great challenges, requiring predictive ability and strategic vision, meanwhile, the sustainable growth of the economy does not only depend on short-term solutions but also on long-term factors.

Determination of strategic breakthroughs based on development driving forces

Under this approach, policy makers can choose strategic breakthroughs as one of the driving forces for a nation's growth and development. The first step of the approach is to identify the right factors that are the driving force for the country's socio-economic development. This is the basis for determining strategic breakthroughs. There are many grounds to determine, such as the ground based on one / several economic sectors, type of enterprise, the one based on material and non-material resources, the one based on economic region and the one based on internal forces. To assess exactly which factors are the driving force, the next step can be based on the contribution extent of these factors to socio-economic development, such as the contribution to grow the gross domestic product (GDP), to create jobs, and to increase exports ...

On the one hand, this approach often creates quite large impulses, activates on key points, and often creates strong, remarkable, explosive development for a country. The development of driving areas, domains and regions has a spillover effect on other fields. The motivations are often easily identifiable through their socio-economic indicators, such as contributions to economic growth, income generation, social employment, ability to spread, and active and supportive impact for the remaining areas.

 On the other hand, this approach tends to dedicate a lot of resources, preferential mechanisms and superior policies to the areas with potential development, which can create a sizable difference in development among regions. It is difficult to persuade and reach consensus among population groups and managers on prioritizing more, better, and superior resources and mechanisms, policies to regions, domains and branches which are considered as the driving forces of the national socio-economic development. In addition, the disparity of regional development affects equity.

Determination of strategic breakthroughs based on the selection of modes of socio-economic development.

The approach in term of resources, the mode of socio-economic development is a way of using resources to promote economic growth. Accordingly, there are a number of development modes, such as the mode based on resource extraction, cheap labor and investment capital, corresponding to an economy with a structure focusing mainly on resource-intensive industries, capital and cheap labor; the modes based on labor productivity, science - technology, innovation, corresponding to an economy with the structure focusing mainly on knowledge and technology intensive industries.

The first steps of the approach is to clearly define the mode of national socio-economic development in a given period based on natural conditions and political, economic - social, philosophy development. The second one is to associated the identification of strategic breakthroughs with the selected development modes.

The approach based on the choice of the socio-economic development modes facilitates to closely link and adhere to the socio-economic development strategy of each country, associated with the economic growth model. It is the proactive approach which has clear goals and purposes, and ensures the consistency with the nation’s overall development goals and solutions.

However, it is difficult to identify specific breakthrough contents. The approach only determines the general strategic breakthrough direction. The choice of the modes of socio-economic development is subjective, willful, or even influenced by political views, so it may be inappropriate or ineffective.

Determination of strategic breakthroughs based on opportunities and challenges

The countries that want to achieve a strategic breakthrough in growth and development must exploit opportunities and overcome challenges. The approach consists of two steps. Step 1 is to clarify opportunities and challenges that are faced in the medium and long terms, especially those created by the international context, such as globalization, industrial revolution, scientific and technical advances. Step 2 is to select breakthrough sectors, fields and contents to best exploit opportunities to rise up and limit challenge.

Because opportunities and challenges are often new issues, taking advantage of opportunities will open a new turning point for development, and overcoming challenges will set the stage for future development steps. Due to the trend of the times, and urgent, real and existing issues, this approach is often easy to reach a consensus from a breakthrough proposal to an implementation.

However, opportunities and challenges are only external context factors and are only one of the bases for defining strategic breakthroughs. Based on opportunities and challenges alone, there will not be enough information to identify strategic breakthroughs, or will incorrectly identify strategic breakthroughs. This approach is therefore often used in conjunction with other means to identify a country-specific strategic breakthrough. Because opportunities and challenges are ever-changing, emerging and lost.

Determination of strategic breakthroughs based on growth poles and competitive advantages.

The approach to competitive advantages and growth poles implies that a country can make a strategic breakthrough in growth and development by focusing on growth poles, and industries, fields, and regions with competitive advantages. According to this approach, identifying strategic breakthroughs also includes two steps. Step 1 is to identify growth poles and national competitive advantages. These must be industries, sectors, localities and regions with competitive advantages based on absolute or comparative advantages associated with specific natural, socio-economic conditions. Step 2 is to consider growth poles or competitive advantages of each country in each period as a strategic breakthrough of that country. Focusing on attracting investment, and creating favorable conditions to promote competitive advantages will help growth poles to break out and lead to the growth and development of industries, sectors, localities and other regions.

The approach to growth poles and competitive advantages has the following advantages. It can be easy to identify high-growth and competitive sectors and industries through their contributions to the national economy. In addition, it can bring into full play the competitive advantages, absolute advantages and comparative advantage of each country in general, of each sector, field, and locality in particular in growth and development. It is able to create growth poles, sectors and fields which develop faster with superior competitiveness compared to the national common ground and with international competitiveness. It is also suitable for the limited resources and investment capacity of each country, especially in developing countries, because only a few sectors, fields, and some localities need to be invested in as growth poles.

However, this approach has some disadvantages. Strategic breakthroughs based on growth poles and competitive advantages can lead to uneven growth and development among industries, sectors, localities and regions, causing to problems of social inequality and overloading urban infrastructure. Identifying growth poles and competitive advantage may be inaccurate if based on subjective desires and wills. It may be difficult to create consensus on sectors, fields, regions that are the growth poles, even encounter political problems, conflicts of interest among branches and among localities.

Suggestions for Vietnam

The need for a strategic breakthrough for the 2021 - 2030 period:

Firstly, the need stems from the requirements set out in the new context.  In the coming time, the world and regional situation will continue to have rapid changes and complicated developments, in which special attention should be paid to the shift of political power among major countries, strategic competition in many regions of the world, including Southeast Asia. At the same time, the trend of protectionism and trade liberalization will be maintained and will compete fiercely. The fourth industrial revolution is a global trend that is strongly influencing and creating opportunities and challenges in development strategies of countries. Besides, climate change is also becoming more and more serious, impacting a series of environmental and social problems around the world. The covid-19 pandemic, with its consequences, can lead to an economic recession or crisis on a global scale.

Secondly, it stems from the desire to develop quickly and sustainably. The reality of national development shows that the fast and sustainable development requirements set out in the Vietnam Socio-Economic Development Strategy for the period 2011 - 2020 continue to be relevant to the next phase. The sustainable development is a cross-cutting requirement in the development process of Vietnam in the coming period.

Thirdly, it stems from the scarcity of resources. The resources for socio-economic development are limited, so it is necessary to focus on solving the weaknesses and "bottlenecks" that are hindering the development. The path for Vietnam to become a developed economy has just begun, and the achievements in recent years do not guarantee success in the future. The impact of early development paradigm and institutional reforms appears to have reached its limit. An urgent issue is adjusting and changing the growth model so that Vietnam can overcome the middle-income trap, become a middle-income country by 2030 and a high-income country by year 2045.

Finally, it stems from the fact that efficient exploitation, use and promotion of resources will create a new impulse, have the power to spread, and unleash all potentials for socio-economic development of the country. Vietnam is a country with great diversity in economic structure. This is an advantage, but also brings many difficulties in the national development process, requiring a flexible management of diversity and a breakthrough in development in order to create the spread to the whole economy.

Requirements in identifying breakthroughs in the socio-economic development strategy for the period 2021 - 2030:

Firstly, strategic breakthroughs should focus on key stages. Based on the approach to determine the development strategy of countries around the world, it can be seen that breakthroughs to affect economic development focuses on key stages of the economy. These are factors that have a strong and decisive impact on the output quality of the economy, such as human resources and capital. Human development is the core foundation, also the highest goal of economic development, and a factor for all development. In addition, the capital factor also plays a very important role in developing countries like Vietnam. Total Factor Productivity (TFP) also accounts for an increasingly large share of the contribution to economic growth. The factors affecting TFP can be mentioned, such as labor productivity, science - technology level, and economic institution. They are all important stages of the economy, become the foundation for the "machine" to operate smoothly, spread to other parts of the economy, and help the rapid and stable economic growth.

Secondly, strategic breakthroughs should focus on solving economic “bottlenecks”. As mentioned above, an economy always has to solve many problems in order to grow. However, resources for that are finite and scarce. Therefore, choosing how to use resources properly is also very important. To do this, it is necessary to determine what is the "bottleneck" of the economy, which is the "bottleneck" that hinders the development of the country. As a result, it is possible to find suitable solutions and focus on investment, solve and remove difficulties for that field, and avoid spreading investment causing loss, waste and inefficiency.

Thirdly, strategic breakthroughs need to catch up with opportunities and resolve challenges in the development process. In order to identify a strategic breakthrough for the economy, it is necessary not only to pay attention to the national characteristics and conditions, but also to understand the future international situation and context. It is also necessary to clarify the political - economic - social trends in the coming time to make forecasts and hypothetical situations, and propose the most appropriate national development path. Recognizing the country's advantages and disadvantages, seizing opportunities, preventing and addressing development challenges will be an important key to a country's development success.

Fourthly, strategic breakthroughs need to promote and maximize competitive advantages. National competitive advantages are always emphasized in socio-economic development strategies, not only in developing countries but also in developed countries. This is a decisive factor to restructure the economy, transform the growth model, ensure rapid, efficient and sustainable development. Identifying national competitive advantages to offer new strategic breakthrough solutions can maximize these advantages.

Finally, the implementation of strategic breakthroughs should create driving forces to promote development and realize the goals in the socio-economic development strategy. The development strategy always sets the path and is concretized with the basic goals and indicators of not only the economy but also the fields of culture - society, environment and defense - security. To achieve this, the identification of breakthroughs should pay attention to the important indicators in the fields of the development strategy, as it is the clearest measure of the success of the national development.

Proposed strategic breakthrough options for the period 2021 - 2030:

Looking back at three strategic breakthroughs in the 2011-2020 period shows that Vietnam is prioritizing the selection of strategic breakthroughs based on the “bottleneck” approach. This is the right choice in the past 10 years. The practical implementation of the socio-economic development strategy 2011 - 2020 shows that Vietnam has achieved many achievements, creating a premise for the socio-economic development in the next stages. However, in the face of new requirements and new contexts, the approachs to strategic breakthrough options for the period 2021 - 2030 need to ensure clearing of the "bottlenecks", while activating the driving forces for growth. At the same time, priority goals should be achieved within finite resources. Because of that requirement, selecting the focuses of previous breakthroughs, and adding new content, new breakthroughs must be the necessary and urgent requirements in the current period.

The breakthroughs in the coming period need to inherit strategic breakthroughs proposed in the 2011-2020 period. At the same time, because the reality of the domestic and international situation has many changes, they have to be concretized and supplemented with some new contents.

Firstly, supplement the content on perfecting the socialist rule of law State, and to build a clean, streamlined and efficient state apparatus. This content emphasizes more on the improvement of the socialist-oriented market economy institution in Vietnam, with the center being the socialist rule of law State. Accompanying the content is a compact management apparatus, with a team of cadres and civil servants who have ethical qualities, integrity, purity, professional ability, creativity, wholeheartedly serving the country and serving the people. These are the most important conditions for ensuring an improved institutional quality.

Secondly, concretize and supplement the content on developing high-quality, skilled human resources to meet the requirements of the country development in the context of the Fourth Industrial Revolution; strongly promoting innovation capacity; and focusing on training, fostering and attracting talents. In the last years of the last decade, the achievements of the fourth industrial revolution have had wide and profound impacts on all fields of socio-economic life. New technological achievements, such as artificial intelligence, big data analytics, Internet of things, robotics, biotechnology and new materials, have created means, modes of production, communication, and activities that were unprecedented in human history. They also have been promoting the formation and development of completely new models of socio-economic development, organization, governance, management, .... On that basis, the requirements for the quality of high-quality human resources must change and be associated with the new context. Accordingly, human resources require new skills, in which innovation is the decisive factor. Along with the development of high- quality human resources, the policy of fostering and attracting talents should be carried out in a basic and methodical manner.

Thirdly, concretize and supplement the content on promoting the cultural values, the strength of the Vietnamese people; and arousing patriotism, the strength of great national solidarity, development aspirations and creativity of the people. Vietnam's history as well as the practice in successful developed countries in the world shows that the strength of a nation is determined by human factors. The strength is formed by both material foundations and spiritual values of which the spirit of patriotism, national solidarity, especially development aspirations and people's creativity can be taken as examples. The development of Vietnam in 2030, 2045 and the following years depends on the overall, long-term and comprehensive socio-economic development strategy. However surely, future success requires Vietnamese people to have a strong aspiration to develop, ceaseless creativity and passionate patriotism.

Fourthly, supplement the content on enhancing connectivity with the region and the world, strongly developing infrastructure, especially information technology infrastructure, the national database system, and creating a foundation for the development of the digital economy. In the coming years, Vietnam's transport infrastructure needs to continue to connect with the region and the world in order to go further and access many markets. Infrastructure facilities of information technology, natural resources and digital data need to be developed adequately and in response to the digital economy development trend.

The final supplemented content is a breakthrough for strongly developing of science and technology; for formulating and organizing the effective implementation of policies to promote technology application and improve research and development capacity; for forming a national innovation system, an innovative start-up ecosystem which takes business as a center of research, development, technology application and transfer. The theory and the practice in countries have affirmed the important role of science and technology in improving productivity, quality and efficiency in all fields of socio-economic activities. Science and technology decide not only "what to produce" but also "how to produce". This is also the factor determining the difference as well as the development level of the countries./.