Vietnam needs US$300 bln to develop in 2011-15
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Vietnam needs around US$300 billion for development investment in the 2011-2015 period, said Deputy Prime Minister Hoang Trung Hai at the Vietnam Business Summit (VBS) under the framework of the 44th Asian Development Bank (ADB) annual meeting in Hanoi on Tuesday.
Vietnam was ranked in the top 15 most attractive economies in the world in terms of market growth rate, the ability of regional market penetration and cheap labor and investment incentive, according to The United Nations Conference on Trade and Development (UNCTAD)’s annual World Investment Prospects Survey 2009-2011.
The country ranks 4th in the world for making improvements in boosting business establishment, construction license granting and loan offering, according to a report on business environment in 2011 conducted by the World Bank and its arm International Finance Corp, said Vo Hong Phuc, Minister of Planning and Investment.
The international community praised Vietnam’s development potential in the medium- and long-term periods and international donors provided a record high of nearly US$8 billion in ODA capital in 2010. This is a significant lever for further development in Vietnam, Hai said.
Despite achieving significant improvements, Vietnam is still facing a lot of challenges and economic obstacles, including the quality of growth, productivity, efficiency and competitiveness, Hai said. He added that the macroeconomic balance is not stable, and the market institutions and quality of human resources and infrastructure hinder development.
Vietnam is one of the countries that have received the most aid from the Asian Development Fund (ADF) and loans from the ADB.
There are other issues such as narrowing the development gap with countries in the region and overcoming the difficulties middle-income countries face, Hai said.
Professor Kenochi Ohno, an ADB economic expert, said Vietnam will have to devise policies to promote intellectual and sustainable development in the future.
Ohno warned that Vietnam’s growth model cannot be attained by only relying on FDI or ODA, raw material mining and exporting, big projects consuming huge resources and investments into stock and realty markets.
Vietnam can learn from success stories of regional countries, like Singapore. It also has to tackle three issues including inconsistent policies, poor coordination among ministries and departments, and inefficient cooperation among participants, Ohno said.
Vietnamese leaders should be proactive and have a clear vision for the future so they can choose some specific industrial sectors the country should focus on from now to 2020, Ohno added.
The economic expert also warned Vietnam to avoid the common “traps” middle-income countries find themselves in and should improve productivity and efficiency.
Potential there, more room for private sector
Vietnam has great potential for strong development in the medium- and long-term, said Asian Development Bank (ADB) President Haruhiko Kurado at the Vietnam Business Summit.
Despite the global economic downturn, Vietnam’s economy grew 6.78 percent in 2010 with a total import-export value of US$157 billion, five times higher than in 2000.
Since the Law on Foreign Investment in Vietnam was issued in 1987, 92 countries and territories have invested with more than 12,463 projects in Vietnam worth US$194.6 billion, including implemented capital of nearly US$80 billion.
International economic integration opens capital and technological opportunities for Vietnam and its partners but it also brings many challenges, from macro policies to business management, said the ADB president. He said he believes in strong development for Vietnam in the medium- and long-term periods, but Vietnam should have specific incentives for the private sector.
Vietnam has an abundant labor force with its population of 88 million, but it should focus more attention on the shortage of skilled workers and inadequate infrastructure, Kuroda said.
He also emphasized the important role of the private economic sector which contributes 47 percent of the GDP and generates jobs for 1.5 million people.
To make full use of this sector, Vietnam should make more administrative reform and strengthen the ability to access land and credit. ADB praised Vietnam’s Project 30 to simplify administrative procedures, he added.
The ADB has approved loans worth $190 million for the construction of the University of Science and Technology of Hanoi, which will support research, technical innovation and skills development. The first loan worth $170 million will have a term of 26 years and bear interest rates set in accordance with its LIBOR-based lending facility, while the second part of the loan, worth $20 million, has a term of 32 years with an interest rate of 2.02 percent, the lender said in a statement. |
