- International media highlights Vietnam’s economic success in 2019
- Breakthrough mechanisms, policies needed for private economic sector’s development
- Party economic commission urged to raise strategic proposals
- Vietnam and Japan promote bilateral economic, cultural and tourism exchange
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| Workers examine electronic components at the factory of the Young Poong Electronics VINA Co. Ltd in Binh Xuyen II Industrial Park, Vinh Phuc province (Photo: VNA) |
One of the fastest economic growth rates in the region, the signing of free trade and investment protection deals with the EU, and the Politburo’s first-ever resolution on foreign investment attraction were among the top 10 economic events of Vietnam in 2019.
The following define Vietnam’s economy this year as selected by the Department for Economic News at the Vietnam News Agency:
1. GDP growth rate among the fastest in the region
In 2019, Vietnam posted a gross domestic product (GDP) growth rate of 7.02 percent amidst the growing strategic competition in the region and the world. This is the second straight year the country has fulfilled all 12 targets set by the National Assembly, including a record trade surplus of 9.94 billion USD, total registered foreign direct investment (FDI) capital of 38.02 billion USD – a 10-year high, low budget overspending, and inflation under 3 percent. This is also the fourth consecutive year inflation has been kept below 4 percent.
2. Vietnam inks free trade, investment protection deals with EU after nine-year negotiations
On June 30, the EU-Vietnam Free Trade Agreement (EVFTA) and Investment Protection Agreement (EVIPA) were officially signed in Hanoi. The new-generation deals commit to the highest standards between Vietnam and the EU. Under the EVFTA, the two sides pledge to slash nearly 100 percent of import tariffs, the strongest cut among the FTAs Vietnam has signed. Meanwhile, the EVIPA also holds significance as it helps ensure an open and better investment and business climate for investors from around the globe.
3. Politburo issues first-ever resolution on foreign investment attraction
On August 20, the Politburo issued Resolution 50-NQ/TW, setting up orientations for perfecting institutions and policies, and improving the quality and effectiveness of FDI attraction until 2030. The first issuance of a particular resolution on FDI was highly valued by both domestic and foreign investors. It details Vietnam’s strategic priorities in FDI attraction, which are projects that apply new, high and clean technologies, have modern governance methods and high added value, and connect with global production and supply chains. It is a prerequisite for the country to attract a new generation of FDI capital with higher quality.
4. Vietnam jumps 10 places in Global Competitiveness Report 2019
On October 9, the World Economic Forum (WEF) released a report which shows that Vietnam has leapt 10 places on the Global Competitiveness Index from 77th position in 2018 to 67th in 2019, making the country the most improved in the rankings. This is the first time Vietnam has moved up to the upper half of the list that covers 141 economies. This result was attributed to the Vietnamese Government’s persistent reform efforts amid global uncertainties caused by geo-political and trade tensions.
5. African swine fever spreads nationwide
On February 19, the Ministry of Agriculture and Rural Development officially reported the first-ever appearance of African swine fever in Vietnam. This is a dangerous disease with no vaccine or treatment currently available. The ministry said there has never been an epidemic that has caused such widespread damage and difficulties. The whole political system has taken drastic measures to fight this epidemic. By mid-December, nearly 6 million pigs weighing over 342,800 tonnes had been culled, accounting for about 9 percent of the nationwide herd. The epidemic has led to a pork shortage, pushing pork prices up in the final months of the year.
6. National target program on new-style rural area building completed two years ahead of schedule
On October 19, the Central Steering Committee for the national target program on new-style rural area building held a conference to review the program in 2010-2020. After nearly 10 years, the program has given a facelift to Vietnamese countryside, raising farmers’ stature, improving rural living standards and continuing to restructure agricultural production towards modernity and sustainability. By October, 4,665 communes, or 52.4 percent of the total nationwide, had been recognized as new-style rural areas, 2.4 percent higher than the target.
Building a new-style countryside has a beginning but no end, so Prime Minister Nguyen Xuan Phuc called on localities and sectors to push ahead with the work in the 2021-2025 period.
7. Commercial banks race to increase charter capital
In 2019, an array of commercial banks moved to raise their charter capital to ensure their capital adequacy ratio (CAR) meets the requirements set by the State Bank in Circular 41/2016/TT-NHNN, which stipulates the CAR of commercial banks and branches of foreign banks must reach Basel II standards from January 1, 2020. Eighteen banks have satisfied Basel II standards so far, including 16 domestic and two foreign institutions.
Basel II has the highest capital-related standards and is applied in many countries to minimize business risks for banks and consolidate financial systems. They help commercial banks ensure their capital indexes, liquidity and risk management meet international standards, thus helping to strengthen the financial – credit system.
8. Boom of private airlines
On January 16, Bamboo Airways officially entered the Vietnamese aviation market with its first commercial flight linking Ho Chi Minh City with Hanoi. It’s been eight years since Vietnam witnessed the appearance of a new airline, starting up competition for domestic market share among carriers. Firms such as Vinpearl Air JSC, Vietravel Airlines Co. Ltd, Vietstar JSC, and Thien Minh Aviation JSC (Kite Airlines) are also completing procedures to begin operations.
Besides, many businesses have also invested in aviation manpower training with the establishment of the Bamboo Airways Aviation Training Institute, VinAviation High-tech Human Resources Training School, and Vietjet Aviation Academy.
9. Opportunities to make breakthroughs in Fourth Industrial Revolution
On September 27, the Politburo issued Resolution 52-NQ/TW on guidelines and policies for the active participation in the Fourth Industrial Revolution (Industry 4.0). The resolution looks to make use of opportunities generated by Industry 4.0 to promote growth model reform, economic restructuring, implementation of strategic breakthroughs, and national modernisation. It targets that by 2045, Vietnam will become one of the leading centres in Asia for smart production and service, startup and innovation. The resolution demonstrates the country’s activeness in taking part in the revolution.
10. Work starts on eastern North – South Expressway
On September 16, Prime Minister Nguyen Xuan Phuc marked the start of construction of the Cam Lo – La Son Expressway traversing the central provinces of Quang Tri and Thua Thien-Hue. It is the first of 11 sub-projects for the eastern North – South Expressway project, which is a priority in the 2017-2020 period and has total investment capital of 118.716 trillion VND (5.15 billion USD), including 55 trillion VND from the state budget and the rest from other sources. With a total length of about 654km, the project will play an important role in easing pressure on National Highway 1, improving the transport infrastructure system, and creating more momentum for socio-economic development.
