February 25, 2024

Vietnam – A Shining Beacon Amidst Global Dynamics / Prof. Nguyen Duc Khuong


From France, Professor Nguyen Duc Khuong – CEO of Leonard de Vinci Business School (EMLV) in France; President of the Vietnam Global Science and Expert Organization (AVSE Global) sends an article to Dan Tri.

The government’s report indicates positive economic growth for Vietnam in the first nine months of the year, with each subsequent quarter surpassing the previous one. Compared to the same period last year, GDP grew by 5.33% in the third quarter, 4.05% in the second quarter, and 3.28% in the first quarter.
Although the annual target has not been fully achieved, this is still an encouraging result, considering the global political landscape, international trade environment, and changes in consumer habits and savings.
While the conflict between Russia and Ukraine continues, instability in the Middle East erupts between Israel and Hamas. These regional conflicts have significant impacts on related parties, particularly in the areas of social issues, immigration, and energy security.
Vietnam remains among the countries with high growth rates in the region and on the international scale.
In October 2023, the International Monetary Fund (IMF) updated its global growth forecast for 2023 to around 3%, with the dynamic Asia-Pacific region at 4.6%, and ASEAN at 4.2%. The most optimistic forecasts from the World Bank (WB) and the OECD for Vietnam’s economic growth this year are 4.7% (August) and 4.9% (September).
Other positive aspects and strengths of Vietnam include a stable macroeconomic environment, controlled inflation, and improved investment climate. The high contribution to GDP from the industrial and construction sectors (37.16%) and the service sector (42.72%) highlights efforts to enhance the growth model.
Foreign Direct Investment (FDI) inflows in 2023 continue to rise, with an estimated registered capital of USD 36.6 billion, representing a 32.1% increase compared to the previous year.
Overall, the optimistic results have been achieved through various factors, including efforts in economic reforms, promoting business expansion, creating a transparent and favorable investment environment to attract capital domestically and internationally, developing connected transportation infrastructure, and enhancing legal frameworks to ensure healthy competition and investor protection.
Vietnam’s proactive approach in promoting the enforcement of bilateral and multilateral trade agreements has expanded market opportunities for Vietnamese businesses, mitigating risks in international trade, especially concerning the potential shortages of raw materials and input factors, and reducing export dependence on diverse markets.
Trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the European Union-Vietnam Free Trade Agreement (EVFTA), and the United Kingdom-Vietnam Free Trade Agreement (UKVFTA) are proving effective. For instance, data from the Ministry of Industry and Trade indicates that the trade turnover between Vietnam and CPTPP countries reached USD 104.5 billion in 2022, a 14.3% increase compared to 2021.
In the face of political instability, the impact of competition, and regional conflicts, coordinating the economy requires flexibility, adaptability, and proactiveness. Over the past year, the government has demonstrated these qualities through various economic diplomacy activities aimed at expanding markets.
Receptions and high-level discussions with leaders of major partners (United States, China, South Korea, Japan, Australia, the Netherlands, etc.) are creating business and working opportunities for both domestic and international corporations.
In 2023, many global corporations such as Boeing, Walmart, Apple, Qualcomm, Nike, Morgan Stanley, Intel, GE, Google, among others, have come to Vietnam to explore opportunities for investment and production expansion.
Policies that promote strategic breakthroughs have clear progress, with a societal awareness of major focuses for the year such as macroeconomic stability, inflation control, driving growth momentum, infrastructure development, science and technology, innovation, digital transformation, and adopting new economic models (green, circular).
Government attention to institutional and administrative reforms addresses numerous challenges in production and business, finance, currency, real estate, corporate bonds, credit access, and land.
Placing citizens and businesses at the center of administrative reforms, along with the use of indices in reform management (the Administrative Service Satisfaction Index SIPAS and the Administrative Reform Index PAR), holds significant meaning not only in evaluating achieved accomplishments but also in foreseeing the necessary steps ahead.
Alongside the bright spots, it cannot be denied that Vietnam has also faced numerous challenges in recent times.
In 2023, businesses, in general, operated in an environment of reduced demand and increased production costs. Difficulties in supply chains, logistics, and rising energy prices posed significant challenges to manufacturing and business operations.
Many Vietnamese enterprises, especially those in the textile and garment industry (down 9%) and aquaculture (down 22%), are struggling due to a lack of orders resulting from slow growth recovery in key export markets such as the United States and the European Union, as well as weakened growth in China.
The expected growth of the EU and the euro area this year is only about 0.6%, while the United States is projected to grow by around 2%. Despite some improvements, global demand in 2024 remains fundamentally weak.
To overcome challenges from the global economy, it is crucial for Vietnam to timely grasp and adapt to changes in the demands and preferences of consumers in developed markets.
For instance, a significant trend in France and Europe is the shift in lifestyle, with people increasing their consumption of products with clear origins, low carbon emissions, and environmental friendliness.
According to Bain & Company’s “Global Paper and Packaging Report,” 71% of European consumers want to buy sustainable products, while 71% of American consumers want products with minimal packaging.
In domestic cases like the Vạn Thịnh Phát and SCB Bank trial, as well as several other cases disrupting the market, negative impacts on the market and economic growth occur due to the complex economic and legal relationships among related legal entities. The early detection and handling of such cases can prevent significant economic losses, market disruptions, and cascading effects on the system.
Given the crucial role of financial markets and the banking system in stabilizing and enhancing the efficiency of capital mobilization for growth, there is a need to continue the determined efforts to bring transparency to the market. Reforming and improving the management and effective supervision of banks is essential to prevent manipulation, market disruptions, and fraud.
Article 2: It’s time for a new model
Image: Vũ Tuấn Anh/GokuAgency
Content: Mộc An
Design: Tuấn Huy
Source: http://surl.li/qwtyp
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