Institutional breakthrough, increased productivity = high growth

New institutions need to be built synchronously and quickly for the formation and development of the digital economy, green economy, and circular economy.

Metro Line 1 elevated section through Thu Duc City - Photo: CHAU TUAN

The draft political report submitted to the 14th Party Congress set two challenging and extremely ambitious targets for Vietnam's economic growth target for the 2026-2030 period, which are to achieve an average annual GDP growth rate of 10% or more and GDP per capita of 8,500 USD by 2030.

To realize this dual goal, Vietnam cannot continue to rely on traditional capital and labor accumulation.

Instead, the economy must shift to a growth model based on productivity and innovation, with the breakthrough requirement that the contribution of total factor productivity (TFP) must reach over 55% as the target stated in the draft.

And to achieve this revolutionary transformation, breakthrough solutions need to focus on renewing core growth drivers accompanied by synchronous support solutions; drawing on experience from implementing 3 strategic breakthroughs in the period from 2013 to 2025, especially in what is considered the most important stage: institutional breakthrough.

The first institutional breakthrough solution that needs to be mentioned is creating incentives to activate the private economy.

According to Resolution 68 of the Central Committee, the private sector has been considered a key driving force of the economy and also the main driver of growth.

Therefore, strong policies and solutions are needed to achieve the goal of having at least 2 million enterprises, contributing 55-58% to GDP as stated in the draft political report.

Solutions need to focus on persistently improving the equal and transparent business environment, building a modern legal framework, ensuring property rights security and implementing fair competition policies among economic sectors (state, FDI, private).

At the same time, there is a classification to implement appropriate business support policies, from minimizing legal compliance costs and administrative procedures to preferential land mechanisms (reserving clean land in new industrial zones and clusters for small and medium enterprises) and flexible credit (for example, supporting 2% interest rate/year for green investment projects, circular economy).

In addition, the draft political report also emphasizes the process of restructuring growth drivers, focusing on science and technology, innovation and digital transformation - identified as key drivers for growth in the coming period.

To do so, new institutions need to be built synchronously and quickly for the formation and development of the digital economy, green economy, and circular economy.

Reforms must also aim to improve the quality of education, make use of talents and high-quality human resources to serve science and technology and national digital transformation, thereby realizing the goal of increasing the average labor productivity growth rate to over 7% per year.

Thus, the possibility of realizing the ambitious goals in the draft report is completely realistic if Vietnam is determined to carry out extensive institutional reforms to unlock resources and improve the health of private enterprises, while creating breakthroughs in growth quality by shifting to a model based on productivity, science, technology and innovation.

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Source: https://tuoitre.vn/dot-pha-the-che-tang-nang-suat-tang-truong-cao-20251017083429813.htm