In a discussion on the eve of the third APEC 2017 Senior Officials’ Meeting (SOM 3), Mr. Achim Fock, Portfolio and Operations Manager World Bank Vietnam expresses the view that the four priorities that Vietnam proposed for APEC 2017 conform to strategic development objectives and reaffirms that the Bank would further support the country in achieving those objectives.

Four suitable priorities

The representative of the World Bank (WB) says promoting sustainable, creative and inclusive development is an important priority not only for Vietnam but also for many countries in Asia and the Pacific.

“Vietnam has grown mainly on the basis of capital and labour. The country needs to join the global value chain, encourages renovation and creativity as well as share knowledge for greater development”, proposed Mr. Achim Fock.

In economic integration and regional linkages, Vietnam has been successful in trade and FDI, according to the WB. It is an open economy integrating intensively and extensively into the world. It carried out busy trade and exchange of goods with many countries and regions.

It is another important priority to encourage dynamism in micro - small - and - medium - sized enterprises. This priority is closely associated with promoting growth on the basis of innovation and creativity. “In analyzing the Vietnamese economy, we realize that the country’s economic growth mainly relies on FDI enterprises while the domestic private sector lags behind, especially in productivity. In order to achieve the objectives, Vietnam should further link private enterprises, small – and medium – sized enterprises with other sectors of the economy”, says Mr. Achim Fock.

The WB expert expresses his appreciation for Vietnam’s proposed priority of food security, sustainable agriculture and response to climate change, as they are global issues and challenges not only for Vietnam but also for the Asia and Pacific region.

International delegates attended the Food Security Week, within the framework of SOM 3 and related practical meetings in Can Tho. (Photo: TGVN)

He reaffirmed that the four priority areas selected for APEC 2007 conformed to the main pillars of the WB - Vietnam Partnership Strategy. The Bank has also committed to accompanying the Vietnamese Government in implementing the strategy and achieving the objectives identified by the two sides.

“Through APEC, Vietnam should discuss and learn from the best experience and practices of other members and fine tune them to suit its circumstances. As the most important financial institution, the WB took an active part in the forum to share its experience and knowledge to help Vietnam and other member economies achieve the objectives in their agenda”, he reaffirms.

Facing challenges

According to him, Vietnam faces many challenges, slowing down its economic growth. On the macroeconomic level, the country’s public debt has increased fast and neared the ceiling of 65% of GDP. Without strict control, this raises an alarm. Additionally, preliminary results of spending and receipt in the first six months of the year indicates that pressure on budget remains. Therefore, the management and control of increased public debt will be a priority for the government in the time to come.

Mr. Achim Fock recommends that in order to maintain high growth rates, Vietnam should continue with its intensive restructuring to improve productivity. Labour productivity is the main driver of GDP growth in the first years of economic restructuring, however, it has stood still. In each sector and enterprise, it is limited by some factors, one of which is the incomplete restructuring of state owned enterprises (SOE). Private enterprises are mainly young. Mostly small in scale, they do not possess technology and are under no pressure to improve their productivity.

Sustainable urbanization is also a challenge to many APEC member economies, particularly Vietnam. This was discussed extensively by representatives of APEC economies, senior government officials, those from international organization and non-governmental organizations and representatives of ministries, branches and localities etc. at the APEC 2017 Dialogue on Sustainable Urbanization within the framework of the Second Senior Officials’ Meeting (SOM 2) in Ha Noi.

The WB representative is of the view that an improvement of the urban environment requires a balance among economic development, sustainable environment and the community quality of life. It is about time that APEC members think seriously about and develop plans for urban development in the next decade. Those plans should include good and multidisciplinary urban planning homogenous from the central level to the grassroots. Urban planning, particularly transport and infrastructure, would impact the life of the population.

“The promotion of growth should be matched with improved quality of life among the population and investment in green and sustainable infrastructure. Sustainable development calls for open dialogue among the leadership, investors, donors and the people etc.”, Mr. Achim Fock points out.

Mr. Achim Fock, Portfolio and Operations Manager World Bank Vietnam. (Photo: TGVN)

TPP is worth having

Discussing the future of the TransPacific Partnership Agreement (TPP), he is of the view that the agreement is worth investing and implementing and the WB welcomes further discussion on the agreement.

He believes that intensive integration in investment, trade or related areas such as environment and labour would exert positive influence on TPP members, including Vietnam.

Though it is in the danger of collapse after announcement of U.S. withdrawal in January by President Donald Trump, the TPP members would meet again to discuss related issues of the agreement on the sidelines of the APEC Economic Leaders’ Meeting to be held in Da Nang from 10-11 November./.

VNF/TGVN