Vietnam sees strong growth through 2020, but foreign partners warn of challenges

Thanh Nien News

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World Bank director in Vietnam said the country's low labor productivity will not ensure strong and stable economic growth. Photo: Diep Duc Minh World Bank director in Vietnam said the country's low labor productivity will not ensure strong and stable economic growth. Photo: Diep Duc Minh

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Vietnam’s leaders are confident of strong economic growth in the next five years, but foreign partners at a conference on Saturday expressed concerns about is low labor productivity and high public debt. 
Bui Quang Vinh, Minister of Investment and Planning, said at the annual Vietnam Development Partnership Forum in Hanoi that the country’s economic growth will improve in the coming years, from below 6 percent during the past five years to between 6.5 and 7 percent through 2020.
Prime Minister Nguyen Tan Dung, who chaired the forum, said the growth this year is expected to reach above 6.5 percent.
Dung estimated that Vietnam would achieve a GDP per capita of $2,228 this year, up from more than $2,000 last year.
Officials said the number is likely to go up to $3,200-3,500 by the end of the decade.
Dung said the government will continue boosting the economy by improving infrastructure, restructuring the financial market to keep public debt within safe limits, and reforming rules to create a favorable environment for scientific research and investment activities.
Victoria Kwakwa, director of the World Bank in Vietnam, said at the forum that Vietnam should focus on raising its labor productivity.
She said Vietnam has recovered from the global economic crisis, but its labor productivity growth has slowed down to less than 4 percent.
The slow pace of labor productivity growth will not ensure fast and sustainable growth for Vietnam, she said.
The Vietnam General Confederation of Labor earlier blamed low labor productivity in Vietnam on low wages, which its survey found did not cover basic demands for 92 percent of the country's workers.
Jonathan Dunn, representative of the International Monetary Fund in Vietnam, said the country has made modest success in containing public debt and budget deficit.
The country’s public debt is expected to reach 61.3 percent of GDP at the end of December, close to the safety limit of 65 percent while foreign debt is set to hit at 41.5 percent, according to official figures.
State budget deficit of this year is estimated to reach 5 percent of GDP, also the limit permitted by the country’s legislature.
Dunn said Vietnam needs to keep its macro-economic policies stable and make stronger efforts in restructuring the state-owned enterprise sector. 

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