Vietnam economy posts high growth but low quality in last 5 years

The five-year summation meeting (2005-2010) on implementing the sustainable development strategy orientation in Vietnam on January 7, 2011 in Hanoi gave many figures on the growth quality of Vietnam.

During past five years, although Vietnam’s GDP posted fairly high growth, averaging at 7 percent per year, the quality and efficiency of the economy has remained low. Two third of Vietnam’s growth is based on investment capital meanwhile the investment efficiency is still low. generally during 2006-2010, the investment rate on GDP of Vietnam reached nearly 43 percent, higher than China’s figure during 1960-1980 period.

The report of National Assembly Standing Committee also showed that Vietnam must spend eight dong of investment capital to make one dong of growth meanwhile according to the standard, the level 3 is considered sustainable development.

According to the deputy minister of planning and investment, Dang Huy Dong, currently, the application of sciences and technologies in agricultural and industrial production in Vietnam is also limited. The Vietnam’s knowledge economy index in 2008 was 3.02, ranking the 102nd amongst 133 surveyed countries (the index of average income countries was 4.1). The country’s growth in many economic sectors has relied heavily on raw resource export. The Vietnam’s labour productivity is only equal to 38 percent of China’s and 27 percent of Thailand’s. Energy consumption, especially energy drain posted 1.5-2 fold increase against regional countries.

According to the statistics from World Energy Organisation, in 2008, Vietnam’s energy consumption was 0.82 kWh/US dollar-GDP, higher than other regional developed nations. Meanwhile, Vietnam’s public debt is increasing rapidly, threatening the sustainable development of Vietnam in the future.

Le Dang Doanh, an economist, said that Vietnam needs to soon have policies, norms, sanctions and economic levers to develop in depth such as requirements on technology innovation, reduction on energy and input material consumption and requirements on labour productivity. If not, right in the 2010-2020 period, Vietnam would become an import country and dependent on imported energy. – DanViet

Tags: Vietnam economic, Vietnam economic growth, Vietnam economy

Posted by VBN on Jan 14 2011. Filed under Economy News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry