Too much talk not related to actions: Japanese Prof
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Professor Kenichi Ohno of National Graduate Institute for Policy Studies in Tokyo, an expert with 16 years’ research on Vietnam’s economy, shared with Tuoi Tre in an exclusive talk about the risks of Vietnam is likely to face if falling into the so-called “middle income trap”.
The problem for Vietnam, said Prof. Ohno, is “too many conferences, seminars and reports which are not much related to actions.”
You have raised concerns about the risk that Vietnam might fall into the middle income trap. Could you please explain why?
- The middle income trap is not a new concept. It is used by the World Bank to refer to some Latin American countries that have remained in the middle income stage for a long, long time and yet haven’t been able to catch up with North America’s level, such as Brazil, Mexico, Argentina,…
I would like to use this concept for Vietnam because there is an urgent need here to move policies ahead.
There are some complacencies that the government is not moving fast enough. Some people might say it is too early to talk about the middle income trap for Vietnam.
Yes, Vietnam has just joined the middle income countries’ group for a few years. But I’m using this as a policy advice to make the government think about the future. And it’s not only me to talk about this.
We want the Vietnamese government to worry about the future more. We think the policies up to now are not enough to go to the future. All policy makers in Vietnam have heard and talked about it.
The next step is action, not just talking. Vietnamese government including ministers, the prime ministers, party people, etc., they all know that Vietnam has to move fast.
Vietnam has just joined the industrialization group and its competitiveness is quite low and there is no policy focal point.
In South Korea, Singapore or Malaysia, the president or PM have very strong mandate to bring the country to new goals quickly despite of opposition parties. The way politics plays out here is good for stability but not for moving the country fast forward.
Yet what we’ve talked about much more in the country in the last few years is the sustainability of the economy, not the growth speed…
- What I mean is the government should take decisive measures. Vietnam can stand strong against acute crisis. The Doi Moi process started because of the crisis in production. But now, FDI, ODA and trade are expanding. The government wants to move, but it’s difficult to move because the crisis is not big enough. The middle trap is a future thing, not a current acute crisis.
Now when you look around, in the 1960s and 1970s, Korean cities were growing very fast and farmers were left. President Park Jeong-hee initiated the New Village Movement.
It’s top-down movement to modernize farming technologies, build new houses in the countryside, etc. Then their rural and urban incomes have been going up together. In Singapore, the government always cares about productivity.
In the 1980s, Mr Lee Kuan Yew started a new drive for productivity movement with Japanese help. In late 1990s their productivity was as good as Japan’s and they started to teach other countries, including Vietnam.
This is the kind of thing that I’m talking about. If the country wants to do something, you create a big movement so everyone talks about it, even a taxi driver. That is a national movement of a mindset change.
What kind of movement would you recommend for Vietnam?
- You can name it anything but it should be about productivity.
In Singapore, even their income is very high but they still talk about productivity. The Ethiopian government now now trying to implement a Kaizen movement, which is to raise productivity in factories and we are helping them to do so.
This is what I’d like to see in Vietnam.
The idea is not about making money from ODA but creating your own design, your own marketing, etc so that if the world changes, you still have your own capacities to move on.
You once mentioned Vietnam is having too many priorities, which means no priority. Could you please elaborate on this?
- Yes, Vietnam has too many priorities. For example Taiwan targets soft power like R&D; in Singapore productivity is the main thing. Malaysia has talked about a new economic model.
In VN, I would suggest that there be a National Competitive Council comprised of representatives of the government, the private sector, academy, etc. There’s no need to have foreign experts there. This council should be led by and accountable to the Prime Minister.
They then are assigned to pick out less then 10 priorities. It can be anything.
Vietnam is not famous for clean and high quality cashew nut or coffee. You can do something about it.
I can’t tell you which one is good because everything is possible but once you decide it, you have to create a task force or a working group under line ministries such as the Ministry of Industry and Trade or the Ministry of Agricultural and Rural Development.
Then this working group/task force will work out the organization, targets, budget, staffing and all related to realizing the priority.
One more thing to bear in mind is the monitoring. In Vietnam, you just do it and even you miss the goal, nothing will happen. Therefore you have to narrow down the things you need to do because monitoring is labor and time consuming. In Vietnam, monitoring is too weak.
Vietnam has too many conferences, workshops, committees and reports which are not related to actions. When I visit other countries, I realize their reports are to make policies and to implement recommendations. That’s how other countries do it.
Back to the middle income trap, what are the key elements for Vietnam to come over the trap in your opinion?
- There are two things: the policy quality and the dynamism of the private sector. These are hard policies to make so you have to learn from other countries.
What are the risks that Vietnam might fall into that trap and what are its opportunities to come over it?
- The advantage is you have a good location. You can’t rest and sleep because all countries around are competing with you and at the same time cooperating with you. I don’t think Vietnam can sit still and do nothing.
During the last national holiday, my air-conditioner broke down and my Vietnamese friend called the mechanist. He came and fixed it right away. That was a very competent worker, but still at middle and low technology levels.
People like that know how to reduce waste and increase productivity in factories. I think they can do great things. If you have more people like that, Vietnam will do better.
The risk is policy complacency. Other countries might start with the same situation but they’ve got strong president or prime minister who has strong mandate to monitor committees and task forces strictly and make them responsible for the result.
I don’t think Malaysians are more diligent than Vietnamese but they have better policies.
