To become an upper middle-income country, Vietnam needs to maintain a minimum growth rate of 7% per year.

Today (February 23), during the visit of World Bank Group President Jim Yong Kim to Vietnam, the Vietnamese Government and the World Bank have just released the Vietnam 2035 Report - which recommends a roadmap to turn Vietnam into an upper-middle-income country in the next 20 years.

To achieve that, Vietnam needs to build a competitive private sector, urbanize efficiently, encourage innovation, and take advantage of new trade opportunities to implement large-scale reforms, according to the report.

Average income of 7,000 USD/person by 2035

The Vietnam 2035 report, jointly produced by the Government of Vietnam and the World Bank Group, outlines key reforms to help Vietnam – a lower-middle-income country – grow its economy, increase social equity, and build modern governance over the next two decades.

Vietnam needs to maintain a minimum growth rate of 7% per year.

To achieve its ambitious goal of becoming an upper-middle-income country, Vietnam needs to maintain a minimum growth rate of 7% per year, raising the average income to over $7,000 by 2035 – about $18,000 in purchasing power parity terms – compared to $2,052 in 2014 – about $5,370 in purchasing power parity terms.

“Vietnam is a success story of development from one of the poorest countries in the world over the past 30 years,” said Jim Yong Kim, President of the World Bank. “Vietnam has maintained an annual growth rate of nearly 7 percent and has implemented targeted programs that have lifted tens of millions of people out of extreme poverty.”

According to Mr. Jim Yong Kim, the Vietnam 2035 report clearly demonstrates the desire of Vietnamese leaders to turn the country into a modern, industrialized nation within a generation.

“Rapid productivity growth, environmental protection and economic innovation will help Vietnam grow rapidly. Removing barriers for disadvantaged groups and providing better services to a rapidly aging urban middle class will help Vietnam maintain its impressive record on equality and social inclusion,” said Jim Yong Kim. “The report also suggests that Vietnam build modern and transparent institutions, steps that can help Vietnam achieve its goals.”

The implementation of this report was agreed upon by the leaders of both sides, Prime Minister Nguyen Tan Dung and World Bank President Jim Yong Kim in July 2014. The report was conducted by a team of experts from the Ministry of Planning and Investment of Vietnam, the World Bank, and many other experts from Vietnam.

Mr. Bui Quang Vinh, Minister of Planning and Investment, said: "Our country is standing at a turning point of reform and development. The opportunities and advantages are great, but the challenges and difficulties are also not small. To achieve the aspiration towards a prosperous, creative, fair and democratic Vietnam, our only choice is to carry out reforms. Otherwise, we cannot exploit the opportunities, nor overcome the challenges, and the risk of falling further behind and falling into the middle-income trap will be difficult to avoid. We believe that the current and future generations of Vietnamese people certainly have enough will, courage and capacity to successfully carry out the renovation process."

3 pillars to promote

The report focuses on three pillars: improving private sector productivity and competitiveness, promoting equity and social inclusion, and improving public sector efficiency.

Regarding improving labor productivity and competitiveness of the private economic sector, the Report proposes a number of measures to strengthen the economy and financial sector, focusing on improving management efficiency, protecting property rights, and implementing competition policies.

The report suggests policies and investments to support the growth of industries linked to global supply chains, and smarter use of free trade agreements, including the Trans-Pacific Partnership. It also recommends improvements to the agricultural sector – which employs nearly half of the country’s workforce – increased environmental protections and improved planning for clean energy production.

Ensuring social inclusion in the development process is not a simple task, especially in the context of globalization, rapid urbanization, and increasing demand for skilled labor. Another problem is the gap between the rich and the poor between ethnic minorities and the majority in Vietnam - minorities account for only 15% of the population but 50% of the poor.

The report calls on Vietnam to continue to promote social inclusion and equity, create more opportunities for ethnic minorities, people with disabilities, and women, and provide services for an aging, urbanizing, and emerging middle-class society. And to do so, Vietnam needs good governance, modern institutions, and a rule-of-law society. Vietnam has made progress on social inclusion, but ethnic minorities remain poor—minorities make up only 15 percent of the population but account for 50 percent of the poor.

The report also makes recommendations for improving governance to enhance accountability and transparency, to ensure Vietnam has a strong institutional system to keep pace with the country's development.

To do so, a more unified system of government is needed with clearer regulations on the economic functions of the state, a reduced role in direct participation in production activities, clear boundaries between the public and private sectors, and recruitment and appointment based on competence.

In addition, it is necessary to strengthen state accountability based on the control function between the three branches of power and create opportunities for people to comment on the government's provision of public services./.

According to VOV