Prof. Dr. Vuong Dinh Hue

- Professor, Dr. Vuong Dinh Hue, in 2015, many of your premonitions were quite close to the country's reality when the GDP growth rate was very positive, exceeding the target set by the National Assembly, inflation was at an unprecedented low, do we have enough strength and power to integrate, sir?

- In 2015, despite the difficult economic conditions in the world and the country, the domestic economic growth targets were quite close to the forecast. Firstly, in terms of growth, in 2015, the country's gross domestic product (GDP) grew by over 6.5%, the first time in the 5-year term that it was higher than the planned target and higher than the National Assembly's target of 6.2%. There were 4 notable positive points: Firstly, industrial production recovered, especially the processing and manufacturing industry grew strongly; Secondly, production and export of the FDI sector achieved a very high growth rate, in the first 11 months of 2015 alone, it increased by 8.3% over the same period; Third, purchasing power and aggregate demand have improved. In the first 11 months of 2015, total retail sales and service revenue increased by 9.4%, and if excluding price increases, it still increased by 8.3%, higher than the 7.8% rate over the same period last year. There are also concerns about whether Vietnam's economy is experiencing deflation.

I think the economy is on the right track, there is no deflation for two reasons: Core inflation (inflation excluding price factors) is quite high; second, total retail sales are increasing, not a sign of deflation. Fourth, to have such large growth, we see that the initial effects of the amended Investment Law, Enterprise Law, etc. are very good; then the effects of the signed Free Trade Agreements. Russian press concluded that this year Vietnam is the country with the most bilateral and multilateral agreements in the world, such as the TPP which has just finished negotiations, FTAs ​​with the EU, South Korea and the Customs Union of Russia - Belarus - Kazakhstan; then the 2015 ASEAN Economic Community (AEC) was officially established on December 31, 2015; the foreign affairs activities of the Party and State leaders have created very good effects.

Thanks to the amended Law on Investment and Law on Enterprises, the entrepreneurial spirit seems to be heating up and is increasing. This year, the number of newly registered enterprises has increased, and the total newly registered capital has increased very strongly. This result is the success of the strategic direction set by the Party and the State 5 years ago, shifting from the goal of rapid and sustainable development to reasonable growth, prioritizing macroeconomic stability and controlling inflation, ensuring social security.

- To successfully integrate into the global economy, the role of enterprises and entrepreneurs is a vital factor, deciding success or failure. However, in reality, domestic enterprises are not highly competitive, there is a gap between domestic enterprises and enterprises with foreign investment capital (FDI) in terms of competitiveness right at home. The growth momentum of the economy also depends on the FDI sector, is it sustainable, sir?

- Recently, we have been quite concerned about the growth momentum mainly depending on the FDI enterprise sector, currently the export proportion of this sector accounts for 65-70% of the total export turnover of the country. However, the FDI sector is still mainly processing and assembling, the localization rate and the value-added rate are very low; the impact of the spread of application and technology, and management of the entire FDI sector on the Vietnamese economy in general is still slow. Meanwhile, the domestic economic sector, including state-owned enterprises and private enterprises, business households, etc., is still facing many difficulties; exports decreased by about 2.5-2.6% compared to the same period. Productivity, quality, efficiency, and competitiveness are low.

The question is why there is a phase difference between these two economic sectors in a country, some experts even worry that there may be “two economies in one country”. This is a big question that we must solve in 2016, related to the issue of productivity, quality and efficiency of the economy. To shorten the phase difference, in my opinion, one of the key points of 2016 is to find ways to shorten the gap in labor productivity and growth quality, along with that is to “remove” the obstacles of the types of markets, including 5 main types of markets: goods and services market, financial market (including capital market and currency market), labor market, real estate market and science and technology market.

Along with that is the continued promotion of administrative reform and improvement of the investment environment. If previously, we set a GDP growth target of 6.5-7%, then credit had to increase by an average of 35-36%/year, there were years when credit increased by over 50% - then in 2015, credit only increased by about 16%, GDP still reached 6.5%. That means the quality of growth is contributed by the total labor productivity factor (TPF). It is forecasted that TPF in 2016 will be about 29.6%, striving for about 30-35%/year in the next 5 years.

- Many economic experts expect that in 2016, the amended Enterprise Law and Investment Law will add vitality to Vietnamese businesses on the path to starting a business and welcoming new opportunities. What do you expect from this growth driver?

- In 2016, according to experts, the world economy will recover and grow in the short term, positively affecting Vietnam's macro economy. Therefore, the Central Government and the National Assembly have carefully considered the plan to increase GDP growth in 2016 by 6.7%, higher than in 2015. To have a breakthrough, Vietnam needs to pay special attention to creating a second wave of investment. The first wave of investment was when we promulgated the Enterprise Law and Investment Law, and now that we have the Investment Law and the Enterprise Law amended according to modern principles, progressive content, and high transparency, we hope to create a second wave of investment with the spirit of a national startup.

Currently, the whole country has only more than 500,000 registered enterprises. We hope that by the end of the next term (2020), the number of newly registered enterprises will reach 2 million. VCCI also expects this number to reach 5 million. To stimulate the passion for startups, the first thing the State needs to do is to further improve the investment and business environment, enhance competitiveness... This is a horizontal impact. In addition, there is a vertical impact, on each type of enterprise. Specifically, for state-owned enterprises, the innovation and reform of this enterprise sector will be in the direction of eliminating the ownership representatives of ministries and People's Committees of provinces/cities, establishing a specialized agency to act as the representative of the ownership of state-owned enterprises...

Continue to promote the effectiveness of the equitization and divestment process of state-owned enterprises, while improving management capacity and restructuring corporate finance. Regarding small and medium-sized enterprises, the Party Congress documents have identified private enterprises as an important driving force for national development and the Central Economic Committee has also completed a project as an orientation and solution in the policy to support small and medium-sized enterprises, moving towards passing the Law on Support for Small and Medium-sized Enterprises in the coming time.

- Thank you, Professor Vuong Dinh Hue.

According to Labor