Business and economic growth difficult in the event of a pandemic | Business

Illustrative photo.

It has also exerted considerable pressure on innovation, institutional reform and efforts to improve the quality of the business environment in order to rapidly revive economic growth.


Inevitable change

The Covid-19 pandemic has caused a global crisis for the past two years. Although the extent of the pandemic’s impact on different countries varies widely, its effects are far-reaching and extremely damaging. The fact that new viral strains are constantly appearing puts the entire world population in serious danger. It also clearly shows the accelerated, strong and high-speed development efforts of digital 4.0 technology and the digital economy.

The attempt to do so must not be delayed. Now is the time to bring many factors together that will force us to make gradual change. Vietnam has done well in controlling the pandemic and maintaining a stable, modest and successful economic growth rate. Therefore, if we do not accelerate our pace of development, we will miss the world pace, slow down and risk falling behind many nations.

It is this pressure to change that has created a new wave of reform and development, which is rapidly moving towards innovation and modern technology. By 2025, our goal in all developing countries must be to adopt modern industry and move from low to middle income level. By 2030, developing countries need to move towards modern technology and higher middle income. Our aspiration in Vietnam must be to become a developed and high-income country by 2045. Therefore, without the implementation of extraordinary solutions, we will not be able to achieve the goal set by the 13th Party Congress, and we will be further removed from our aspirations, goals and objectives.

It is becoming evident that 2022 will be the year of openness to further reforms. We believe that we will continue to be resilient, and also economically viable. We will no longer have to follow a large-scale blockade, or face major disruptions in the supply chain. The bright spot for 2022 is that the macroeconomics will continue to be stable; inflation will remain within target limits; the exchange rate will remain stable; and the major balances of the economy, in particular the external balances, will continue to be maintained.

According to the target and some recent forecasts, economic growth in 2022 is expected to be around 6% to 6.6%. The coming year will also be a year of unprecedented demands and pressures for the achievement of the 2021-2025 long-term objectives and the 2021-2030 socio-economic development strategy.

If we want to achieve these goals and aspirations, we must be stronger, innovative and adopt more drastic solutions to support the solutions already implemented in the five-year socio-economic development plan for the years 2021 to 2025, as part of the economic restructuring project to transform the growth model over the period 2021-2025 and the socio-economic development plan 2022. These solutions are eagerly awaited so that the economic recovery and development program can be implemented quickly.

Currently, institutional reform, administrative procedures and improvement of the business environment are strongly encouraged, as well as legislation for digital transformation and digital economy. It’s what businesses and individuals need and expect most.

Reform needed

In recent years, it seems that reform has slowed down. In order to reform institutions and improve the quality of the business environment over the period 2021-2025, it is necessary to continue reforming regulations and business management methods; reduce and narrow the list of conditions imposed on businesses; and abolish or simplify regulations on the conditions of industry and commerce.

We need to move towards state application and management of enterprises as part of risk management and post-inspection plans, and apply more digital technologies. In terms of management, you have to be flexible and find a balance throughout the mandate rather than annually. In this sense, the budget deficit for the entire term can remain at the target of 4% of GDP, but it can be adjusted to around 6% to 7% in 2022, 5% in 2023, and then gradually decrease. at 3% per year. Likewise, if the inflation for the entire term is 4%, the year 2022 may accept a higher level than the rest of the years. By operating in this direction, we will create room for a stimulus program and accelerate growth for at least two years from 2022 to 2023.

In 2021, exports have been a major contributor to economic growth. However, imports and exports also face many difficulties due to stricter management and inspection of import and export goods. Therefore, it is necessary to further reduce the list of goods subject to more stringent management and inspections, and to fully cover all aspects of risk management, while moving to post-inspection. At the same time, we need to connect and share data and perform administrative procedures for strict management of inspections on the national one-stop-shop portal.

What needs to be done, and also needs to be done, is to follow a step-by-step reform of regulations and administrative procedures related to investment in construction, including laws on investment, construction, housing, real estate, land and the environment. In which, we must review and abolish administrative procedures which are unnecessary, inappropriate and have no management objective.

For example, approving investment policies for private investment projects, offshore investment licenses and investment policies, and investment decisions for public investment. We must remove unnecessary repetitive documents, concretize the content of files, abolish overlapping regulations and processes. This is a difficult area to reform because it affects the territory of the ministries concerned. Therefore, this method cannot rely on the administrative apparatus for administrative reform, but requires independent research, evaluation and recommendations outside of the ministries with relevant interests.

The strategic competition between the superpowers and the evolution of globalization will put pressure on national strength and competitiveness. Digital transformation is inevitable and it will force individuals, organizations and the whole country to adapt to a further transformation.

Saigon Investment

Comments are closed.