Fostering innovation in response to economic headwinds: Experts

The economic environment of Vietnam needs to reform and innovate to face as tough year ahead, according to a number of experts.

At a conference on Vietnam’s economy in 2022 and prospects for 2023 on January 12, 2023, organised by the Central Institute for Economic Management (CIEM), under the Ministry of Planning and Investment in collaboration with the German Society for International Cooperation, Nguyen Anh Duong, Director of the CIEM's general research department, said that CIEM forecasts two scenarios for Vietnamese economic growth this year.

In the first scenario, which is considered the most feasible, Vietnam’s GDP may expand by 6.47 per cent. This level is approximately the economic growth target of 2023 determined by the government of 6.5 per cent. In the second scenario, the nation’s GDP may grow by 6.83 per cent.

“We can achieve the expected level in the second scenario if continue to rapidly reform and increase productivity,” said Duong.

According to CIEM, Vietnam's economy may be affected by many factors, such as the ability to prevent the spread of the SARS-CoV-2 novel variants, increasing geopolitical competition globally, the prolonging of the Russia-Ukraine conflict, and the degree of tightening monetary policy in major economies to handle inflation.

CIEM experts noted the progress in implementing the socio-economic recovery and development programme. If macroeconomic stability is maintained, Vietnam can continue to reform and promote fiscal and monetary measures for economic growth.

Fostering innovation in response to economic headwinds
Fostering innovation in response to economic headwinds.

In particular, economic growth will depend significantly on the ability to persify export markets, take advantage of opportunities from free trade agreements (FTAs), handle risks caused by confrontation in trade and technology between major economies, and the depreciation of currencies in the regions against the US dollar.

To successfully implement the socio-economic development plan in 2023, including growth targets, and inflation control, on January 6, 2023, Vietnam's government promulgated Resolution No. 01/NQ-CP on essential tasks and measures to implement the plan for socio-economic development, state budget estimates, business environment improvement, and national competitiveness enhancement.

Besides the issues of reform, CIEM experts also said that by the year 2023, Vietnam has to pay attention to the need for innovation to improve the quality of growth.

The policy framework for innovation needs to be further improved, especially by increasing the piloting of new ideas and business models toward digital and green transformation. The method of innovation also needs to be changed drastically.

Specifically, it is necessary to continue to guide, organise, and implement effectively basic laws of the market economy institution, such as the amended Law on Enterprises, the amended Law on Investment, the amended Law on Bidding, the amended Law on Public Debt Management, the Intellectual property law, the amended Law on Competition Law, the Law on Cybersecurity Law.

Emphasising the issue of trade facilitation, Duong said the legal readiness for cross-border paperless trade needs to be improved. In particular, it is necessary to improve the legal environment in line with the requirements of the FTAs. So that Vietnamese people and enterprises can effectively protect their data and personal information by applying digital technologies to trade and paperless commerce.

At the same time, it is also necessary to complete the legal framework on management and customs clearance through e-commerce channels, and share information on exports, imports, exit, entry, transit of goods, people, and means of transport.

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