A few days ago, VietNamNet Bridge reported how an influential group of economists are campaigning to reshape the nation’s growth model. Their prescriptions are seen, albeit dimly, in some recent official statements. More clarity may be just around the corner.

“Economic restructuring” was mentioned by the Government at the beginning of the world economic crisis a year ago, as referring to steps that will repair weaknesses that the crisis has revealed. At cabinet meetings, building the new structure for the economy has been a top issue.

The Prime Minister assigned the Ministry of Planning and Investment to coordinate development of a plan for economic restructuring, with key economic areas which will be the key to the country’s development.

In the Government’s report to the session of the National Assembly that has just begun, Prime Minister Nguyen Tan Dung referred to impending changes of the model of growth.

According to the PM, it’s time to assess the impacts of the crisis and likely structural changes in the global economy, with particular attention to the relationship between the state and the market. Through these analyses, Dung said, Vietnam can update its model of development and the contents of restructuring.

His remarks indicated an intent to boost industrialization, speed modernization and improve the country’s economic potentials.

Details were notably lacking. The PM said that the government will urgently design and implement this restructuring scheme as a key element of the social-economic development plan for 2010-2020.

Minister of Planning and Investment Vo Hong Phuc said on October 28 that his ministry has basically finalized a plan. It will be submitted to the government in late November or early December and then sent to the National Assembly with a request for its approval.

Cung said Vietnam is still at a stage of development that mainly relies on natural resources and cheap labor costs. The plan suggests a strategy for Vietnam to reach a higher stage of development in which processing industries that use modern technology will gradually replace industries based on natural resources and cheap labor. This process will have the participation of private, foreign and state-owned enterprises (SOE).

At the heart of the plan is the evolution of SOE, with three aspects. Firstly, they will be restructured to run according to the rules of the market-based economy. Secondly, the goal of the SOE will be changed from raising production towards raising the value of their products. Thirdly, the SOE must be judged based on their market shares.

Cung also said that in the new economic structure, industry and service will be emphasized. However, this will be a natural shift, as the role of agriculture becomes relatively smaller. The state will assist, create favourable conditions and promote the shifting process with economic policy tools.

The economic advantages of each province and region will be taken into account. In particular, emphasis will be on fostering cooperation among areas, rather than competition with each other.

According to Cung, to implement the economic restructuring scheme, policy makers need to change their thinking about development and clearly define the roles of participants.

Source: VietNamNet/Lao Dong/ TBKTVN/TT