The Nhon-Hanoi Station metro line. (Photo: Hoai Thu)

At present, uncertainties in the global and regional economies continue to affect the Vietnamese economy. Moreover, the economy’s internal issues have not been thoroughly examined to develop appropriate and effective policies that would enable Vietnamese enterprises to dominate the domestic market, increase exports, and create high-quality Vietnamese-branded products.

The restructuring of the economy requires further discussion and clarification of two objectives: addressing the shortcomings in the transition from a centrally planned economy to a socialist-oriented market economy; and Vietnam becoming an industrialised nation with upper-middle income status (GDP per capita of approximately 10,000 USD per year) by 2030.

The period of renovation since the 6th National Party Congress has been long enough to analyse and identify the factors behind Vietnam’s proud achievements, as well as the reasons why the country has not fully tapped into its potential and advantages for socio-economic development. In both political platforms, the Party affirmed that in the process of building socialism, state and cooperative economies are the main drivers of development, with the private sector being an important driver. After 40 years of renovation, a serious assessment of these sectors is needed.

Regarding the cooperative economy — primarily agricultural economics — whilst achievements include meeting the country’s food demands and generating substantial export revenue, the main weakness is that production relations have not significantly progressed. Agricultural economics still struggles with small-scale production and household economies, failing to establish industrial-scale agricultural production zones capable of generating sufficient output to invest in science and technology throughout the value chain from production to harvesting and processing. This investment would facilitate agricultural industrialisation, helping farmers improve product quality, increase income, and prosper through farming itself.

Both state and private economies are linked to the role of the state. However, these two roles have not been properly understood or clearly delineated, leading to difficulties in both sectors.

Based on analysis of international geopolitical conditions and Vietnam’s internal circumstances, with established targets, Vietnam’s required socio-economic development rate is very high compared to other countries globally and regionally. Therefore, to realise these major objectives and directions, the 14th Party Congress must implement breakthrough policies to overcome institutional difficulties, address human resource challenges, and mobilise all national resources for development investment. Here are some key issues the Party Congress should address.

Firstly, regarding institutional reform, the primary task in institutional reform is to reform the administrative system and organisational structure of the state system. Research institutions and scientists have repeatedly expressed concern about the fact that no other country has as many provincial-level administrative units as Vietnam. This model has dispersed the state’s already limited resources in developing key economic sectors and priority areas, as over 70% of the budget is allocated to administrative payroll. First and foremost, each locality’s tasks must be clearly defined based on comparative advantages and assignments from the Party and Government, allowing localities to actively harness their strengths. This would avoid the situation where every province sets their economic growth targets equivalent to the national average without considering their geographical and political characteristics.

Similarly, at ministerial and departmental levels, the administrative apparatus has become bloated, leading to overlapping functions and responsibilities, whilst it is unclear which management unit or individual is responsible when problems arise. The overlap in management functions and duties has led to overlapping legal regulations. In institutional reform, developing a stable, directive legal system is crucial, yet in practice, laws have relatively short lifespans. In many cases, laws are drafted with an open spirit to allow management agencies to issue appropriate regulations based on practical circumstances. However, this has led to management agencies issuing too many subordinate documents that are more restrictive than the original law’s open spirit. Then, when practical obstacles arise, stakeholders demand law amendments, creating a cycle of instability in the legal system.

Secondly, regarding development investment. Public investment must be effectively utilised to create momentum for other economic sectors to participate in investing in production ecosystem development, successfully implementing the principle of “public investment leading private investment”. There must be a decisive reform of the state capital and asset management apparatus in enterprises. With assets exceeding 3.5 quadrillion VND, decisive measures must be implemented through market economy principles to utilise this vast resource, following the principle of non-discrimination based on ownership origins whilst clearly defining the state’s dual responsibilities for these assets: both implementing state management and fulfilling ownership roles.

In the immediate term, the state needs to continue investing in key projects to generate demand and pave the way for new industries. A prime example is using approximately 130 billion USD of public investment to develop the national railway system and urban railways in Hanoi and Ho Chi Minh City over the next 10-15 years, thereby establishing a technologically capable transport industry. Vietnamese enterprises can use this as a foundation to develop semiconductor and automation industries.

Alongside investment in new economic sectors, there is also a need to simultaneously develop industries where Vietnam has proven competitive advantages. Notable examples are the textile and footwear sectors, with advantages in labour force and market access for the next 10-20 years.

Thirdly, for sustainable development, Vietnam must fulfil international commitments on green energy and green economy. In recent years, research on hydrogen-ammonia energy has been intensified, with several plants expected to begin operations by the end of this decade. This provides a foundation for sustainable renewable energy use (wind and solar power), solving the issue of renewable energy’s instability.

Along with these green power plants, Vietnam must research and acquire electricity storage technology and energy-efficient vehicles. Nuclear power plant construction, which was suspended for further study following the Fukushima nuclear power plant incident, needs to be revived. If Vietnam’s current human resources cannot meet the requirements for widespread digital economy implementation whilst facing demands for green energy development, this will pose a significant obstacle to achieving the set economic development goals.

These suggestions provide insights into the challenges and opportunities facing Vietnam’s economy in the coming years. Through this, we can remain calm and confident in the face of global and regional economic developments affecting our country, thus helping us stay steady on the path to achieving the objectives set by the Party for 2030 and 2045.