SUMMARY

A. SOME UNDERSTANDINGS AND EXPERIENCES ON GOING BEYOND THE THRESHOLD OF THE LOW INCOME DEVELOPING COUNTRIES

What is beyond the threshold of the low income developing countries?

The classification of country types just based on annual average income is rather simple. They just need to rely on the income thresholds to classify the countries, comparing to the thresholds with the annual average income of the countries. At present, this classification way has been applied commonly in the world.

The paradox of the average income GDP per head

The average income GDP per head of one country is calculated by total GDP divides to the population in a certain year. This index is used to assess the income level of the citizens of the countries. It reflects the changes in terms of economic growth and is the part of some synthesis indices. Although many countries still use this GDP index, but in general, it has a lot of limitations and not reflect correctly a country’s economic situation. More concretely, the GDP per head could not reflect truly the income level of the people of each country.

The different types of beyond the threshold

Due to shortcomings of the GDP per head, many issues are discussed around beyond the threshold of the nations, forming two types of opposite beyond the threshold: 1- unreal beyond the threshold; and 2- real and sustainable beyond the threshold.

B. THE FACTORS GUARANTEEING VIETNAM TO GO BEYOND THE THRESHOLD OF THE LOW INCOME DEVELOPING COUNTRIES

The real situation of income level in the Viet Nam development process

The achievements

One of the most important achievements of the innovation process in Viet Nam is that the country has achieved and maintained the leading GDP growth speed in the region and the world. This is a basis factor to guarantee Viet Nam could escape from the threshold of the low income developing countries.

The shortcomings

Along with the above mentioned achievements, the Viet Nam development process still has some limitations as the followings:

- Firstly, the character of Viet Nam economic growth in the last years mainly bases on the width instead of the deep scale. The growth gained mainly comes from the increase in terms of the quantities of the input factors such as investment capitals, laborer numbers meanwhile the investment quality and effectiveness are low, the technological level lags behind and the laborer skill still is limited.

- Secondly, although the income level of the Viet Nam people increases along with the economic growth speed, but the inequality in terms of income among regions and residents classes tends to increase.

In short, the above limitations show that there are many risks which can affect beyond the threshold of low income developing countries of Vietnam. More concretely, we can see clearly these signals from 2007 economic context. Apart from the impressive economic numbers of 2007, there are very concerned numbers and phenomena.

The factors guaranteeing to go beyond the threshold of the low income developing countries

The new understandings and thought on the country development

To help Vietnam going beyond the threshold of the low income developing countries in the real and sustainable way, it needs to propose solutions to solve above limitations. To do this, the first thing is that it is necessary to innovate the understandings and thoughts on the country development. The core point of the new thought on the country development is that the speed of growth must be along with the quality of growth.

The macro factors

- Forming good institutions, facilitating, mobilizing strength and potentials of the economy, enterprises, and people

- Improving the productivity, effectiveness and the competition of the economy

- Strengthening to shift economic structures

- Maintaining economic stability, macro balance, and the main security of the economy

- Upgrading education and training, science and technology

- Guaranteeing social equality and fighting corruption

- Fostering the environment protection and implementing sustainable development

Enterprise factor

The enterprises have very important position in the economy which are the main part to constitute GDP and the decisive factor to the shift of economic structures, such as: economic component structure, economic sector structure, local economic structure... The enterprise sector develops will contribute to free the production power, mobilize and bring into play the internal strength into socio-economic development, contributing to economic growth and social equality.

To guarantee that Viet Nam will go beyond threshold of low income developing countries, the build of the enterprise with the concrete roadmap is urgent work. Some economic experts show that the establishment of national programs for enterprise development needs a breakthrough step along with consistent solutions in some main areas. The strategy to build the enterprise community with businessmen having competitiveness capacity needs to consider a breakthrough solution. With such importance, this strategy must be presented and implemented in the framework of a national program with the participation of ministries, sectors and concretized by the local action programs.

Source: VNEP, March 2008.