Institutional and legal reforms will be the key factors in business development over the next five to 10 years in Vietnam, experts have said.

Dr. Nguyen Dinh Cung, a member of the Economic Advisory Group to the Prime Minister, said during an online conference held on November 8 that Vietnam’s economy would see a number of changes with the introduction of new policies.

The government has identified several main areas of focus, including institutions, infrastructure, workforce and technology.

Cung said that institutional reform should change Vietnam’s resource allocation away from the “ask-give” principle to a market mechanism, which will improve efficiency of resource usage.

However, these changes require a shift in mindset of the political system, he added.

Adjustments of the Law on Land are key to resource allocation reform in order to help intended targets access land more easily, Cung said.

Institutional reform needs to remove “unreasonable barriers” to help businesses develop. And, rather than focusing on inspections, a risk management system should keep track of businesses’ compliance, Cung said, adding that businesses need to actively push for reforms that can help them grow.

Vietnam aims to become a developing country with medium to high income by 2030, and a high-income country with the developed industry by 2045, he said.

Dr. Vo Tri Thanh, director of the Institute for Brand and Competitiveness Strategies, said that global integration and political changes were providing opportunities for Vietnam to re-design its economic development strategies.

Global integration and free trade agreements have helped Vietnam improve its exports and expand its business activities. They have also created pressure to improve policies and the investment climate, and have motivated businesses to enhance product quality and services.

Lawyer Dinh Anh Tuyet, head of the Vietnam Business Lawyer Club, said that while FTAs bring many benefits, businesses need to be aware of protectionist policies and trade barriers, noting that products with high export turnover may have to deal with trade safeguard investigations.

Businesses also need to diversify their markets and sources of materials to divide risks, and pay attention to origin traceability and social corporate responsibilities.

The online conference was held by the Vietnam International Arbitration Centre.