WB: Maintaining reforms and breakthroughs is necessary for Vietnam to accelerate sustainably

Experts and international organizations discuss at the seminar - Photo: VGP/HT

These are recommendations from experts and international organizations at the announcement of two new reports by the World Bank (WB) on realizing the ambitious goal of becoming a high-income country by 2045 on May 22, in Hanoi.

An effective institution is the key to sustainable growth

The first report, "Vietnam 2045 - Breakthrough: Institutions for a High-Income Future", stated that international experience shows that countries that overcome the middle-income trap and rise to high-income status are all thanks to continuous improvement in institutional quality.

Ms. Mariam J. Sherman, WB Director for Vietnam, Cambodia and Laos - Photo: VGP/HT

‎Ms. Mariam J. Sherman, World Bank Country Director for Vietnam, Cambodia and Laos, said: The journey towards the goal of becoming a high-income country by 2045 has clearly shown the important role of institutions in ensuring sustainable growth. Recent reform efforts demonstrate Vietnam's determination, but to achieve this goal, Vietnam needs to implement more drastic reforms "a breakthrough institutional push" to maximize the potential of the private sector to promote growth and create quality jobs for the people.

Public investment needs to be managed more effectively, from project selection, implementation to monitoring. In addition, improving the legal and regulatory framework will help make the business environment more transparent, stable and predictable.

Local governance also needs to be enhanced through decentralization, increased accountability, and better coordination between provinces and cities. To become a high-income country, Vietnam also needs to build an effective and accountable civil service that is appropriately sized, better compensated, and supported by institutions that ensure due process, transparency, and independent oversight.

According to Mr. James Anderson - Chief Public Sector Specialist of the World Bank (WB): A country that wants to overcome the middle-income trap needs to effectively implement many solutions, in which, he emphasized doing well in both quantity and efficiency of public investment. The current disbursement rate of public investment in Vietnam is still lower than the average of 96% in high-income countries. However, to improve substantially, the public investment system needs to change from the root, that is, the processes, institutions and coordination mechanisms between levels and sectors.

At the same time, Mr. James Anderson said: Administrative procedure reforms such as Project 30, Resolution 19 or Resolution 68... although there have been advances, after a while, sometimes businesses encounter complicated problems.

In addition, the new WB report also points out that it is necessary to consider amending laws related to the promulgation of legal documents, public investment and policies on business conditions inspection. One of the key points is to avoid "pre-audit", to give clearer authority to the Government and localities, and to improve the legislative capacity of the National Assembly in a professional and independent direction.

The event to announce two new reports by the World Bank (WB) with the content of realizing the ambitious goal of becoming a high-income country by 2045 - Photo: VGP/HT

A strong private sector is the foundation of high-income countries.

Dr. Tran Dinh Thien, former Director of the Vietnam Economic Institute and member of the Prime Minister's Economic Advisory Group, said: The future of Vietnam's high-income economy is the future of the private economic sector. In fact, the Party and the Government have raised important viewpoints, identifying the private economic sector as an important driving force. However, in reality, up to this point, this sector is still weak and faces many barriers in terms of institutions, competitiveness and access to resources.

Therefore, Dr. Tran Dinh Thien agrees with the strong determination to implement reforms from the top down, shifting the mechanism from asking and giving to proactive responsibility and delegating real power to localities. On the one hand, the institution needs to ensure fairness in accessing resources, eliminating discrimination between state-owned enterprises and private enterprises.

Sharing the same view, Mr. Dau Anh Tuan, Deputy General Secretary and Head of the Legal Department of the Vietnam Chamber of Commerce and Industry (VCCI), said: The Party affirms that the private sector is an important driving force for development. However, it is necessary to continue to maintain innovation from pre-control to post-control, so that enterprises can freely enter the market. If done well, the business ecosystem can be raised to a new level, more dynamic, more creative and more effective.

According to Dr. Dau Anh Tuan: Recently, there has been a change in thinking, a big step forward in the Vietnamese legislative system is to shorten the time for law making. Previously, a law could take up to two years to complete, but now the time will have to be shortened to about 6 months.

Associate Professor Dr. Pham Duy Nghia said that there is a change in legislative thinking towards building framework principles. The power to build more flexible enforcement mechanisms is given to the executive branch, with clear responsibilities. However, Mr. Nghia emphasized: There needs to be closer supervision to better enforce the rule of law. There needs to be more specialized courts, with English-language trials for foreign investors, to enhance the credibility of the judicial system.

The second report, titled “Vietnam 2045 – Greener Growth: Pathways to a Sustainable Future”, highlights that investing in climate adaptation will help mitigate the impact of climate shocks on the agricultural sector, businesses and manufacturing facilities in Vietnam.

Forecasts show that if sea levels rise by 75 to 100 centimeters, nearly half of the Mekong Delta could be submerged by mid-century. According to the World Bank: Without timely adaptation measures, the impacts of climate change could reduce Vietnam's economic output.

There are many steps we can take now to protect our land, communities and infrastructure from climate shocks. The key is to put in place appropriate mechanisms and policies to encourage businesses and people to adapt proactively, and to integrate climate risk management into all sectors of the economy, Ms. Sherman stressed.

The report also identifies opportunities for Vietnam to reduce the carbon intensity of its economy towards the Government’s target of achieving net zero emissions by 2050. The report highlights the central role of the private sector, and proposes steps to accelerate the energy transition, leveraging increasingly affordable renewable energy technologies to improve energy efficiency in industry.

Experts recommend that Vietnam should exploit the potential of the marine economy to promote a greener, more resilient future in the face of climate change. The marine economy is a sector that is exposed to many risks due to climate change, so adaptation is urgent and brings many benefits.

Along with institutional reform, Ms. Dorsati Madani, Senior Economist of the World Bank in Vietnam, said: The Government has issued important plans and programs. The Government has approved the National Strategy on Climate Change for the period up to 2050, aiming to minimize the impacts of climate change and promote sustainable development; the National Plan for Climate Change Adaptation for the period 2021–2030, with a vision to 2050...

However, a senior expert from the World Bank said: The implementation process at lower levels has not yet achieved the expected progress, requiring the implementation levels to effectively implement major strategies in energy policy, transportation, land use planning, energy saving and carbon pricing. Solving the problem of sustainable development has a positive impact on economic growth - through increased labor productivity, lower energy costs, helping to improve the competitiveness of Vietnamese enterprises.

"There needs to be strong participation from the private sector, especially in the fields of renewable energy, smart agriculture and high-tech manufacturing," the WB expert recommended.

In fact, in recent times, the Government has implemented many synchronous institutional reform measures such as Resolution No. 126/NQ-CP dated August 14, 2023 on promulgating a number of solutions to improve the quality of work on building and perfecting the legal system and organizing law enforcement to prevent corruption, group interests and local interests.

The Government also held many thematic meetings on law-making focusing on institutional improvement, especially on newly arising practical issues that need to be adjusted. At the same time, the Government strongly urged to promote solutions to improve the efficiency of public investment disbursement; established a Working Group to promote the disbursement of public investment capital of the Government, to inspect, urge and remove difficulties for ministries, agencies and localities.

Mr. Minh  

Source: https://baochinhphu.vn/wb-duy-tri-cai-cach-dot-pha-can-thiet-de-viet-nam-but-toc-ben-vung-102250522145348588.htm