With the theme "Promoting policy mechanisms and strongly implementing new growth drivers", the Forum was jointly organized by Vietnam Economic Magazine and the Ministry of Foreign Affairs .
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| Deputy Foreign Minister Nguyen Minh Hang delivered the opening speech at the 16th Annual Vietnam Economic Scenario Forum. (Photo: Quang Hoa) |
The world will shape the “new rules of the game”
Assessing the prospect that the world economy will continue to face difficulties, many risks, and the risk of recession, Deputy Foreign Minister Nguyen Minh Hang said that entering 2024, the global economy is forecast to continue to emerge with some notable trends.
First, the world economy is still in a period of profound and pivotal transformation. Uncertainty, instability, and uncertainty will continue to increase in 2024 with more than 70 elections taking place in many countries, forecast to entail many notable economic policy adjustments.
The World Bank’s Global Outlook report released on January 9 forecasts global economic growth to slow to 2.4% in 2024. This is the third consecutive year of decline and is 0.75% lower than the average of the previous period. Global trade growth is only half of what it was before the pandemic. In addition, the World Bank believes that the world has an opportunity to turn around the current growth situation through the implementation of coordinated policies to trigger “investment booms”.
“Developing countries are estimated to need to invest 2.4 trillion USD/year by 2030 to achieve sustainable development goals, so it is necessary to further assess the impact on Vietnam,” the Deputy Minister noted.
Second, global geopolitics continues to evolve in a complex manner, with increasingly increasing conflict hotspots, posing multi-dimensional consequences for the global economy, especially deepening economic fragmentation. The theme of the 2024 WEF Davos Conference on “Restoring Trust” demonstrates the current urgency of maintaining cooperation, controlling risks in major power competition, and promoting the role of international solidarity and multilateralism.
Third, international economic linkages are changing strongly in line with the trend of green transformation and sustainable development. “Many comments say that the current adjustments of economic linkages are taking place at a rapid pace, with increasingly complex content, including many issues beyond national borders, while at the same time shaping ‘new rules of the game’ that create pressure to enforce, affecting the competitiveness and adaptability of developing countries. Therefore, it is necessary to analyze the new trends affecting the development of Vietnam’s economy,” the Deputy Minister pointed out.
Recalling a conversation with a senior economist of the World Bank (WB), Dr. Can Van Luc, a member of the National Monetary and Financial Policy Advisory Council, said that the overarching trend of the past year was economic uncertainty, risks and slowing growth. According to the latest forecast of the WB, in 2023, the global economy will grow by about 2.6%, while the International Monetary Fund (IMF) estimates a growth rate of 3%.
Entering 2024, the three keywords "risk, uncertainty, caution" will continue to cause the world economy to continue to grow slower by about 2.4%, mainly due to the slowing growth of the US and China. However, according to this expert, the European region is expected to recover better this year and offset the decline of major economies.
Four major risks and challenges
Compared to other countries in the region, Dr. Can Van Luc said that Vietnam's economy grew by 5.05% last year, although lower than planned, it was still relatively high in the region, only behind India with a very good growth rate of 6.3%, slightly lower than the Philippines, equivalent to China and the average growth rate of the Asia-Pacific region.
From a context that is still subject to many fluctuations, Dr. Can Van Luc summarized some major risks and challenges for the world economy and Vietnam in 2024: geopolitical conflicts are still extremely complicated and strategic competition between major countries is increasing; financial and monetary risks, the collapse of some banks in the US and Switzerland; debt, including public debt and private debt, is high in the world, and the risk of bad debt and default is increasing.
Meanwhile, the situation in Vietnam is more stable. Food security and energy security are still a big problem for the world, including Vietnam; global prices, inflation, and interest rates have decreased but are still high, financial and currency risks have increased, causing the global economic recovery process to slow down (subdued growth).
“The world’s largest economy continues to slow down, partly due to the persistence of high interest rates that will last into 2024. This will negatively impact Vietnam’s exports, investment, consumption, international tourism and financial markets,” Dr. Can Van Luc noted.
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| Overview of the 16th Annual Vietnam Economic Scenario Forum. (Source: VnEconomy) |
Identify growth drivers
In the context that world growth in 2024 is forecast to be lower than in 2023, although the "headwinds" may decrease, Prof. Dr. Hoang Van Cuong does not hide his concern when Vietnam sets a rather high growth target, from 6% - 6.5%, higher than in 2023. "That shows that we need to make great efforts to be able to go against the trend", Prof. Dr. Hoang Van Cuong acknowledged.
From the discussion with experts at the Forum, it can be seen that Vietnam is facing many new opportunities, but if it only relies on external resources or export resources, it will be difficult to overcome and go against the general trend. Therefore, it is necessary to effectively exploit internal resources, how to turn that into a real driving force for growth to rise up. At the same time, it is necessary to have specific actions to "seize" the huge opportunities that are opening up, for example, green transformation, digital transformation, etc. These factors will create fundamental changes in the structure of the economy.
Among the important growth drivers, Prof. Dr. Hoang Van Cuong said that it is impossible not to mention the determination of the Party, National Assembly, and Government to focus efforts to support businesses with the determination to create new development steps in 2024.
“In this, we not only attract investors but also need to accompany them. To do that, we need to strongly reform institutions, create a legal environment and create opportunities, not remove obstacles,” Prof. Dr. Hoang Van Cuong frankly said.
Sharing the same view, Mr. Dau Anh Tuan, Deputy General Secretary of the Vietnam Federation of Commerce and Industry (VCCI), said that the National Assembly and the Government need to focus on solving the problem of how to make it less difficult for businesses.
“I don’t like the phrase ‘resolving difficulties’, because by resolving difficulties we just keep running after difficulties and the proactive and leading role of the State is greatly reduced,” Mr. Tuan expressed his opinion and suggested that we should switch from “resolving difficulties” to “creating favorable conditions”.
According to Mr. Tuan, this is a better approach, clearly demonstrating the role of readiness in facilitating business activities of enterprises, perhaps something that needs to be done at many levels. "This is the key to regaining trust, improving the business environment more strongly and quickly, most proactively", Mr. Tuan shared his opinion.
Mr. Phan Duc Hieu, Standing Member of the National Assembly's Economic Committee, highlighted four policy highlights showing the Government and National Assembly's determination to act to promote economic growth this year.
Firstly, regarding the direction of promoting socio-economic development in 2024, the resolutions of the National Assembly and the Government all emphasize the priority of promoting growth and stabilizing the macro-economy. In particular, the Government emphasizes 16 golden words with four action messages: Discipline and responsibility - Proactiveness and timeliness - Accelerating innovation - Sustainable efficiency.
Second, the Resolutions of the Government and the National Assembly both highlight solutions to take advantage of the great achievements in economic diplomacy of the past year. In particular, two key groups of solutions are to continue promoting the manufacturing and processing industry and human resource training.
Third, focus on prioritizing FDI attraction. Notably, the National Assembly has passed a resolution on additional corporate income tax in accordance with the regulations on preventing erosion of the global minimum tax base, while at the same time assigning the Government to soon establish an investment support fund from this additional income tax source.
Finally, the policy is oriented towards the business community. The National Assembly Resolution emphasizes Resolution 41-NQ/TW dated October 10, 2023 of the Politburo on building and promoting the role of Vietnamese entrepreneurs in the new era, thereby promoting the motivation of the business community.
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