Resolute to Continue Pandemic Prevention and Economic Development

The year 2021 is of particular importance as it will witness many important political events like the 13th National Party Congress, the election of the 15th National Assembly, the election of the People's Councils at all levels. This is also the first year of executing the 10-year Socioeconomic Development Strategy 2021-2030, the 5-year Socioeconomic Development Plan 2021-2025 and the 5-year plans on all fields stated in Party and National Assembly resolutions.

2020 - the most successful year in the last 5-year plan

2020 was considered the most successful year in the past five years as it made great special achievements. Facing numerous difficulties and challenges, especially adverse impacts of the COVID-19 pandemic, natural disasters and floods, Vietnam managed to achieve impressive and comprehensive results in all fields, successfully fulfilling the dual goal of preventing the COVID-19 pandemic and recovering socioeconomic development, ensuring social security and public health. The country’s economy expanded 2.91%, one of few economies in the world recording positive growth. Vietnam also managed to maintain macroeconomic stability, control inflation and ensure major economic balances.

In 2020, Vietnam’s GDP reached about US$343 billion, ranking No. 40 in the world and No. 4 in ASEAN. The GDP per capita was US$3,521, ranking No. 6 in ASEAN. The share of high-tech export value to total merchandise export value increased from 19% in 2010 to about 50% in 2020. Total merchandise import and export value increased 3.6 times, from US$157.1 billion in 2010 to US$543.9 billion in 2020. Exports rose by 14% a year on average, becoming an important driving force for economic growth. The export market was expanding. Many companies successfully entered regional and global value chains, helping improve the export capacity and economic competitiveness of the country.

Notably, 2020 was a great year for Vietnamese rice. Vietnam surpassed Thailand and India to top the world in rice selling price. Its ST25 rice continued to be ranked among the best rice varieties in the world. Vietnam was also considered one of the 16 most successful emerging economies in the world and made a fast V-shaped economic comeback, with forecast growth of more than 6-11.2% in 2021.

Vietnam has signed 15 free trade agreements (FTAs). In 2020 alone, Vietnam ratified and effectively enacted EU - Vietnam FTA (EVFTA); signed the Regional Comprehensive Economic Partnership (RCEP) and signed the UK - Vietnam FTA (UKVFTA) and negotiated two FTA deals. The country has 16 strategic partners and 11 comprehensive strategic partners; joins more than 500 bilateral and multilateral agreements in many fields; and is recognized as a market economy by 71 countries.

According to the Brand Finance (UK), an international brand valuation agency, the national brand value of Vietnam reached US$319 billion in 2020, an increase of 29% over 2019 - the fastest growth in the world. As a result, the value of Vietnam's brand name climbed nine places to No. 33 in the world.

In 2020, Vietnam also obtained remarkable achievements in international integration, with an elevated position, prestige and competence as it successfully undertook a “double role” of being a non-permanent member of the Security Council of the United Nations and Chair of ASEAN. With a multilateral foreign policy, Vietnam is confident and active in promoting an intensive and effective international integration process.

2021: Growth target of 6.5%

The government has defined the action motto for the year 2021 as “United, disciplined, innovative, creative and aspirational”. The country will strive for GDP growth of 6.5% (6% assigned by the National Assembly), GDP per capita of US$3,700, the consumer price index of 4%, and the contribution of total factor productivity (TFP) to growth at 45-47%.

In 2021-2025, Vietnam will continue to promote economic growth, improve the growth model in all economic - technical, economic - social and economic - ecological aspects, bolster innovation-driven development, enhance labor productivity, apply scientific and technological advances, improve human resource quality, boost comparative advantages and active international integration.

According to many international organizations, Vietnam will still manage to keep macroeconomic stability and maintain a V-shaped recovery, with GDP in 2021 expanding by 6-11.2%. Vietnam is also considered to be one of the fastest-growing economies in the region and the world. If the growth momentum can be maintained as in the past three decades, by 2045, the 100th anniversary of the independence of Vietnam (1945 - 2045), its GDP is estimated to reach US$2,500 billion and GDP per capita, US$18,000.

In general, although Vietnam's position and power are stronger than ever before, there are still many potential risks. Many bottlenecks have not been cleared, posing the risk of lagging behind, the risk of falling into the middle-income trap, particularly vulnerable factors to economic fluctuations. The demographic and rapid aging of the population will also place great pressure on the social security system.

In addition, Vietnam will continue to face numerous challenges as the COVID-19 pandemic is still casting a shadow all over. As an open economy, Vietnam is placed under intertwined impacts of increasingly complicated and unpredictable international economic situations, increased geopolitical tensions, trade protectionism and financial risks. The Fourth Industrial Revolution is producing great opportunities for developing countries to catch up with rich nations, but it is also coming with more challenges of being left behind or more dependent on developed countries.

By Quynh Chi, Vietnam Business Forum