AVERAGE INCOME LEVEL – VIETNAM WILL GAIN IN 2035

If the average income level raises to US 7,000, or US 18,000 in purchasing – power parity terms (grows at least 7% per year), Vietnam is considered to gain to the upper-middle-income status of in 2035 according to the Vietnam 2035 report released on February 23rd 2016.

Jointly prepared by the Vietnamese Government and the World Bank Group (WB), the report presents recommendations to help Vietnam reach the upper-middle-income status over the next 20 years.

The Vietnam 2035 report “Toward Prosperity, Creativity, Equity and Democracy” comprises seven chapters with six key transformations serving as the foundation for realizing the 2035 aspirations.

They include enabling economic modernization with a productive and globally competitive private sector, building the country’s technological and innovative capacity, managing urbanization and other forms of spatial transformation to achieve economic efficiency, charting an environmentally sustainable development path with enhanced capacity for climate resilience, promoting equality and inclusion among marginalized groups, and building a modern state governed by the rule of law.

These six breakthroughs are structured in three key pillars about economic prosperity with environmental sustainability, equity and social inclusion, and capacity and accountability of the state.

As for economic prosperity, Vietnam is urged to urgently improve labor productivity as it is ranked very low compared to other countries in the region.

The low labor productivity is attributable to old economic and labor structures. More people are working in the informal sector than in the formal sector and over 44% of the total workforce is in agriculture, a sector which produces low added value.

Improvements in productivity, environmental protection and economic innovation can help Vietnam maintain high levels of growth.

– WB Group President Jim Yong Kim –

Other problems are slow improvements in the country’s market economy model and inefficient allocations of capital, land and natural resources.

Regarding the third pillar dealing with the enhancement of the state’s capacity and accountability, the report said the productivity stagnation and the weak environment for private sector development are related to state effectiveness.

State effectiveness rests on three supporting pillars, which are a well-organized government with a disciplined and meritocratic bureaucracy, an adherence to market rationality in economic policy making, and a mechanism to ensure checks and balances in the government and public participation.

Vietnam’s legal framework has given citizens some space to participate in governance. But in practice, there lies a gap between statements about citizen participation and the actual space for them to influence decisions.

Source: Saigon Times