(VOVWORLD) - In the final months of 2021, Vietnam has expanded its vaccination coverage and worked on its socio-economic recovery and development plan. Its goal is not development at any cost, but sustainable development.
 National Assembly Chairman Vuong Dinh Hue addresses the Vietnam Economic Forum 2021. (Photo: hanoimoi.com.vn) |
Vietnam's economy was severely affected by the COVID-19 pandemic, especially the 4th wave, which has had short and long-term impacts on every sector. The economy faces risks and challenges related to inflation, economic balance, employment, and social security.
Combining short-term and long-term solutions
At the Vietnam Economic Forum 2021, themed “Recovery and sustainable development” last week, National Assembly Chairman Vuong Dinh Hue said it’s very difficult to achieve macro stability, but very easy to lose it. To lose macroeconomic stability is to lose everything. Vietnam’s short-term socio-economic recovery must support its long-term purposes.
“Development is not at any cost. It must be sustainable. We must pay attention to immediate solutions to maintain growth momentum, control the epidemic, and support economic recovery. Short-term and medium-term solutions must support our long-term goals of economic restructuring toward rapid and sustainable development. The solutions must address economic problems as well as social and environmental issues,” Mr. Hue said.
To handle the epidemic and sustain the economy, Vietnam has combined fiscal, monetary, and other macro policies. The total size of Vietnam's fiscal and monetary support packages in 2020 and 2021 was an estimated 4% of GDP. (That’s slightly lower than the world average. For low- and middle-income countries, the rate was about 4.3%).
NA Chairman Hue said that to ensure sustainable recovery and development, it’s important to coordinate monetary policies with other macro policies. It’s necessary to increase self-reliance and economic resilience and expand both supply and demand.
Mr. Hue said that in times of difficulty, it is necessary to stand side by side, unite as a country and in solidarity with the region and the world.
Focusing on key sectors
Economists say Vietnam can accept a higher level of deficit overspending and an increase in public debt in the 2021-2023 period. But in the long-term, once the economy has recovered, Vietnam needs to expand revenue sources, strengthen its management of revenue, and improve the efficiency of state expenditures to ensure fiscal security in the 2021-2025 period.
Chief economist of the Asian Development Bank (ADB) in Vietnam Nguyen Minh Cuong said Vietnam’s support packages should prioritize short-term measures like helping workers and employers, which will affect Vietnam’s potential and development in the middle and long term.
Human resources are key to sustainable development. Professor Dr. Nguyen Duc Khuong, Deputy Dean for Research at IPAG Business School, Paris, said an innovation ecosystem will empower people to increase productivity.
 Bui Nhat Quang, President of the Vietnam Academy of Social Science (photo: vietnamnet.vn) |
Bui Nhat Quang, President of the Vietnam Academy of Social Science, said a digital economy is one path in the current context to sustainable recovery. The digital economy accounts for about 15% of global GDP. In Vietnam it’s about 10%.
“We have a lot of space for a digital economy, but the digital economy will be imperfect if we don’t revise our policies and mechanisms to match it. This is the time to develop a digital economy and accelerate institutional reforms to reach the goal of sustainable recovery and development,” said Nhat.
Over the past two years, COVID-19 has cost Vietnam about 37 billion USD. This is just the direct loss of GDP, not counting other losses. Choosing proper solutions for recovery and sustainable development is essential for Vietnam to return to its previous growth and development trajectory.