The event drove the participation of international financial institutions such as the World Bank
, the International Monetary Fund (IMF
), Asian Development Bank, foreign development agencies, and diplomatic delegations in Vietnam.
In his opening remarks, Minister of Planning and Investment Bui Quang Vinh highlighted macroeconomic stabilization of Vietnam over the past five years and put forward goals for the 2016-2020 period: GDP growth of between 6.5%-7.0%, and GDP per capital ranging from $3,200 to $3,500.
Victoria Kwakwa, World Bank country director for Vietnam, made a number of suggestions on priorities for the next five years.
The Vietnamese government firstly needs to deal with the productivity challenge. Current productivity growth rates are unlikely to deliver the sustained rapid growth that could see Vietnam follow the development trajectory of countries like Korea or Taiwan (China), she said.
“What is needed to stem the decline in productivity growth is a broad framework to level the playing field between all economic actors and promote genuine competition and security of property rights. Vietnam’s market institutions reform agenda will need to be significantly stepped up to achieve this.”
The country director made recommendations relating to other issues such as the environmental footprint of Vietnam’s growth, poverty and social welfare, Government capacity and accountability.
Jonathan Dunn, resident representative of the International Monetary Fund (IMF), warned that Vietnam’s budget overspending was sizable and public debt was on the rise. In addition, the handling of bad debt remained sluggish due to legal bottlenecks.
The country’s public debt is expected to rise from 59.6% in 2014 to reach 61.3% of GDP at the end of this year, close to the ceiling of 65%, according to government data.
Mr. Dunn said Vietnam needs to keep its macroeconomic policies stable and accelerate the restructuring of the financial and state-owned enterprise sectors.
Sharing the same view, Eric Sidgwick, country director of the Asian Development Bank (ADB
), raised concerns that Vietnam’s public debt was increasing worrisomely over the past few years.
Public and publicly guaranteed debt has now nearly doubled that in 2010, projected to reach 62.4% in 2015 from 59.5% in 2014. Vietnam’s state budget deficit is expected at 6.5% of GDP in the coming years from an estimate of 5.3% in 2015, according to documents prepared for VDPF.
Vietnam is facing new challenges in securing funds for infrastructure development as the country’s economy is on an upturn and the urbanization is gaining momentum, Mr. Sidgwick warned.
He, therefore, recommended that Vietnam make more effective use of existing official development aid, give more importance to the public-private partnership model, and make bolder efforts to scale up the capital market.