I do not follow the school of thought of dividing economic reforms into first or second phases.

Reforms are a continuous process which may take place in order or undergo sudden change. I also do not want to say that this is or is not a golden period for Vietnam - the important point is we are moving closer to the targets we have set ourselves.

With the nation’s pending WTO accession, 2006 really is a landmark year in Vietnam’s integration process, but this is only one in a series of important economic events. With this in mind, press circles should increase their focus on the issues surrounding the nation’s integration process, rather than focusing solely on the specific timing of Vietnam’s WTO accession.

Vietnam has advanced from on-paper integration under the ASEAN Free Trade Area (AFTA) to concrete activities such as changes in tax rates and the entry of more foreign-made goods to the domestic market. Competition from international players is certainly on its way. We should not focus too much on time-based predictions, such as the prediction from some commentators that the nation’s growth will slow down after 2011. While the nation’s growth may indeed slow from 2011 if the right steps are not taken for the nation’s sustainable development, it is not the timing that is important so much as sustainable development of the economy itself.

Many different views of the nation’s sustainable development targets have been aired and there is now increased scrutiny of and pressure on the government in its policy building and development planning process, with the investment efficiency of one invested dong to GDP has predicted not to change in the 2005-07 period, staying at VND2.6 and the efficiency of VND1 in cost predicted to see a gradual fall, from VND1.67 in 2005 to VND1.59 in 2007.

The most important issue in the nation’s sustainable development is that speed of development should be matched by quality of development, cultural development and environmental development. I agree with the view that we will pay a high price if we strive only for quantity. The task of identifying our present position and the necessary steps for moving forward and developing stably over the next five years is a hard one.

We were not wrong to focus on breadth of development during the initial phase, but this approach will soon reach its limit. For example, in 2005, total development investment capital reached 39.5 per cent of GDP. If we compare our position with that of the countries with the highest rates - around 42-43 per cent - it becomes clear that capital-based growth cannot be maintained at the level we have seen so far and we cannot develop economically by relying on capital alone.

To return to the notion of a slow-down in growth, if we continue this way, a slow-down is entirely possible. In addition, in recent years we have succeeded in linking economic development with social development and environmental protection, yet our results have still fallen short of our sustainable development goals. A new phase of growth requires new priorities. Many nations have now started to implement a three-dimensional approach to development, with a focus on cultural development, democracy and human development.

While the past 20 years of Vietnam’s economic reform centered on three ‘pillars’ - the transformation from a centrally-planned economy to a market economy, from a uni-sectoral economy to a multi-sectoral economy, and from a closed economy to an open economy – the situation is now more complicated. The global integration process brings with it new challenges, such as the basic completion of market institutions by 2010 and the development of new policies for the development of the business sector. Business encouraging policies fostered by the Enterprise Law, the Investment Law and the policy enabling Party members to engage in business are of great significance when enacted and applied, and bring about economic breakthroughs.

I also want to note my own view of Vietnam’s economic reform process. Its beginning was not 1986, but earlier, with the Politburo’s Resolution 26 of 1980, which began several reforms, such as the reforms of the price-salary-monetary policies in 1980-1981 and 1984-1985. Without the experience and lessons gained through these processes, the reform policy of 1986 would not have been possible.
When considering the continuing challenges for the country, it is also important to recognise the ongoing need for social reforms, such as reform of education and training. During integration human resources and education and training are critical issues. Without a competent workforce, we cannot develop, let alone develop sustainably. Education reform has been one of the most difficult aspects of the reform process and has not yet brought the expected gains. However, it is necessary to recognise that no other aspect of reform can compare to that of education and training in terms of complexity. The experiences of other nations show that reform in these areas requires a high level of political determination from the country’s leaders. There is still much to be done in this sphere and no time to waste in implementing the necessary policies.

It has been said that opening the education and training market is one possible solution to these problems. The education market in Vietnam is not “closed” at present, although it does have its own special features and regulations, but is home to fierce competition as in other economic fields. However, it is important to realize that many foreign-invested projects in this field bring only third- and fourth-class technology to Vietnam. While foreign institutions with a local presence may have a high-profile, the quality of education they provide in Vietnam is not the best. In many ways this is easy to understand as they do not want to create a force that can compete with themselves. If wee look around, it is easy to see that it is the most developed countries which attract the highest investment in education.

There is a lesson to be drawn from the example of Singapore. A young Vietnamese scientist I know who has been working in the biophysical sciences in the US has recently been recruited to lecture in Singapore and offered a very attractive package to move there to live and work. It is this scientist and others like him who are enabling Singapore to develop a new scientific field. From this we can see that it is important for Vietnam to open its education market in terms of selecting fields of specialisation to excel in, and attracting and maintaining talent rather than just opening the door to well-known foreign universities.

I would like to cite the experience gained through the opening of Vietnam’s technological market and say “don’t turn Vietnam into a dumping site for education”. Further, it is important to remember that while technological dumping can be resolved, educational dumping threatens serious outcomes for generations to come. Avoiding these outcomes may be more difficult in the education sector, than in the technological sector, but I think we can still succeed.

Source: Vietnam Investment Review