Pandemic offers opportunities for Vietnam’s 2021 growth

Pandemic offers opportunities for Vietnam’s 2021 growth

The National Assembly has adopted Vietnam’s 2021 socioeconomic development plan, setting a gross domestic product (GDP) growth target of about six percent. Although it is considered feasible, attaining the target will depend on control of the Covid-19 pandemic and administrative reform efficiency.

Digital transformation is an indispensable way for businesses to grow

Pandemic boosts digital progress

The past year was a difficult and challenging one for the Vietnamese business community. The global impact of the Covid-19 pandemic disrupted supply and reduced demand, heavily undermining the Vietnamese economy dependent on export markets and major trade and investment partners.

With strenuous efforts in pandemic control and economic growth restoration by the government, ministries, sectors and businesses, Vietnam’s GDP grew almost three percent in 2020, making it one of the few countries in the world to record net positive GDP growth.

Phan Xuan Dung, Chair of the National Assembly’s Committee for Science, Technology and Environment, said that despite the impressive GDP achievement compared to other countries, Vietnamese businesses need to double or triple their efforts, cooperation and connectivity if they are to recover and develop.

World Bank Lead Economist and Program Leader for Vietnam Dr. Jacques Morisset said Vietnam was likely to achieve a high growth rate thanks to its success in pandemic control, and while global trade declined seriously in 2020, Vietnam endeavored to export more than the rest of the world did. In the past, Vietnam was inefficient in digital transformation, but since the pandemic, two-thirds of companies in Vietnam have shifted to digital platforms, he said. Expressing his optimistic outlook for Vietnam’s economy, Morisset said that although the world economy is still unpredictable, Vietnam’s economy will certainly accelerate strongly, possibly growing more than six percent in 2021.

Vu Tien Loc, Chair of the Vietnam Chamber of Commerce and Industry (VCCI), said Vietnam still has huge room for development, making the six-percent growth target for 2021 feasible.

The processing and manufacturing industries achieved high growth in 2020

Easing business environment problems

According to Loc, Vietnam needs to further simplify administrative procedures, ease problems related to its investment environment and overlapping laws and policies if it is to create a new driving force for economic growth. Meanwhile, businesses need to continue upgrading their operations and consider sustainable development and digital transformation an inevitable path to improve their competitiveness and integrate into international economic communities, Loc said.

Do Van Ve, Chairman of the Thai Binh Province Business Association, said Vietnam achieved a growth of almost three percent in 2020 although it had to focus on pandemic control, including social distancing, for more than half a year, indicating that the country will likely reach a growth of more than six percent in 2021 if it does well in terms of macro and microeconomic development. Startup development is crucial for small businesses to grow and big ones to become larger, he said. Enterprises need to pay due heed to product/service quality, price, design, and distribution strategies, and take opportunities offered by new generation free trade agreements.

An appropriate ecosystem and a stable and transparent legal framework are vital for business development. Although it has improved its business environment, Vietnam has not yet achieved the set target of becoming one of the four ASEAN (Association of Southeast Asian Nations) countries with the highest competitiveness indexes and the best business environment. Businesses expect that Vietnam will reach that target in 2021.

The National Assembly passed a resolution in November 2020 on the socioeconomic development plan for next year, with the majority of the delegates agreeing with the economic proposals and the goal of achieving GDP growth of about six percent in 2021.

To implement the plan, the National Assembly suggested that the government continue to effectively prevent and reduce damage from the Covid-19 pandemic and other diseases as well as raising awareness of pandemic prevention and control.

The government and concerned agencies will accelerate research and international cooperation in vaccine production and provide access to Covid-19 vaccines as soon as possible.

The National Assembly suggested that the government consistently and efficiently implement measures to promote export and strongly develop the domestic market to stimulate consumer demand, developing the domestic distribution system and trade promotion, and proactively exploiting opportunities offered by free trade agreements.

The government will concentrate resources to accelerate the formulation of national, regional and provincial plans for the 2021-2030 period and submit to authorities for approval according to the Planning Law, ensuring timely response to investment and development requirements.

VietNam Economic News