Dr. Tran Dinh Thien: The Prime Minister has done something unprecedented in history!

Dr. Tran Dinh Thien, Director of the Vietnam Economic Institute, said that in 2017, Vietnam will face more challenges and difficulties. Therefore, he emphasized that "we need a new mindset and logic for development".

Looking back at 2016, what do you think was the most impressive action of the Government?

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I think that was when the Government clearly saw the possibility of economic growth not reaching the target but did not propose to the National Assembly to adjust down the growth targets. The Prime Minister did something unprecedented in history.

This can be seen as a new approach, not pursuing short-term achievements. This action is a sign that Vietnam is gradually getting out of the race when running while looking down at its feet, thinking itself to be moving forward but in fact running behind other countries.

On the other hand, it also shows that Vietnam is gradually moving away from reporting subjective and objective difficulties and challenges at Government and National Assembly meetings and then flexibly adjusting. At the end of the year, when looking back, all achievements are complete (due to previous adjustments). Therefore, there is no problem because even if growth declines, the task is still "completed".

In 2016, the Prime Minister did not propose to adjust the growth target but always requested the members of the Government and all levels and sectors not to falter in the face of difficulties and challenges, and to be determined to innovate and create. The Prime Minister also had drastic directions for management decisions that brought positive effects for 2016. This is also considered another logic of Vietnam in development.

However, you also said that 2016 was the most difficult year for Vietnam in 30 years of renovation?

Here I want to talk about the story of rural agriculture last year. It must be said that there has never been a more tragic year than 2016. The drought and salinity in the past year were not natural disasters, it seemed like a natural disaster would end in a few months but it was not. It was much more terrible than people thought. In fact, this is changing the entire development structure of Vietnam.

Talking about the Mekong Delta, this region depends on fresh water to survive. Now the fresh water does not come down, salt water comes in, alluvium is not deposited, so everything is "pulled out", causing the entire delta to soon collapse.

The tragedy is that the saltwater gradually encroaches. If it rises once and then retreats, we might be able to resist it, but like this, it is impossible. We must understand that saltwater intrusion is much more dangerous than drought. Drought only needs one rain to end it, but to remove the saltwater is not a simple story.

This affects not only people's livelihoods but also Vietnam's basic development conditions.

It was a terrible sign. A fertile region, a promised land, had changed. Therefore, a new approach was needed, if we continued to think according to the logic of delta development, we would die.

With the challenges experienced in 2016, what will 2017 be like, sir?

2017 will be even more difficult. Because the world will have many big fluctuations and disruptions, such as oil prices, free trade protectionism trends... strongly affecting Vietnam's production, FDI attraction as well as import and export of goods.

Although we have signed many free trade agreements with the EU, South Korea, the US, etc., there are currently many major economic and political turmoils. For example, the Brexit event is causing division in Europe, South Korea has a political scandal involving the President, and most of all, the unpredictable policies of the newly elected US President Donald Trump.

Meanwhile, internal difficulties remain, natural disasters and droughts continue to occur abnormally, affecting people's livelihoods. The country's potential is weak, public debt is high, policy space is limited... I believe that in 2017, a new development logic will be needed.

Many times mentioned a new logic of development, so what is its meaning?

It means not having to grow at all costs. Not seeing that agriculture is in trouble due to drought and salinity, pumping water in is not the solution. Not thinking about developing the delta while those lands have changed, the old advantages are no longer there. The new logic of development means having to rely on the private sector, but not the ones that are numerous but tiny.

The biggest difficulty for Vietnam is that private enterprises are still weak, and the concept of private forces does not exist. Enterprises are loosely linked together, not in a chain. Private enterprises need to have a line, a guiding axis. That is extremely important. We cannot just make a living alone, whoever is strong will eat.

I emphasize that we must let businesses grow. If any business makes mistakes, the leaders must be punished, and those who do wrong must be punished, but we must avoid causing the business to collapse. I think we should think that a business that the country has is a national asset, and that asset must be protected.

The goal for the next 5 years is to have strong corporations as the backbone. The number of 110,100 enterprises sounds impressive, but it is so small that it is useless. I think that among them, there are about 70,000 enterprises that started from households, they only care about making a living, they do not have the sacred, great motivation to compete internationally, to leave a legacy. Therefore, enterprises also need to have a different approach.

So what are your suggestions and recommendations for 2017?

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I think we need to clearly see the challenges as well as the opportunities that the times are posing for Vietnam. The issue of growth must be viewed in a longer term, we should not be overly concerned just because of the growth target, we cannot demand immediate results but must persistently aim for sustainability.

To do this, the Government must persist with the goals of stabilizing the macro economy, better coordinate macroeconomic management, resolutely restructure the economy, transform the growth model, and resolutely improve the business environment.

In the past year, I have seen two very good points that show that the Government is heading in the right direction. That is, it has paid attention to the 4th industrial revolution and decided on the project of restructuring and innovating resources. If these things are well implemented, the Vietnamese economy will have strong changes.

On the other hand, in attracting foreign investment, Vietnam needs to consider and choose carefully. It should not approach and invite all foreign investors, but only invite large, high-quality investors. In the country, it is necessary to take care of Vietnamese enterprises, not just focus on clearing the land for foreign investors.

We need to focus on investing in development through innovation, technology, and higher added value. This is a strategic approach, not a call to strive for short-term results./.

According to Cafef.vn