Vietnam is unique in being the only country among the 10-member ASEAN-grouping that has carved out a niche for itself in the economic development process with a socialist set-up. Ever since it drove out foreign invaders and won a bitter protracted war against the might of the US, it has emerged as one of the fastest growing economies in contemporary times. During its 13th National Party Congress that concluded in February 2021, it set up a very ambitious development target. The congress resolution called for Vietnam to become a developing country with modernity-oriented industry and move up and out of lower-middle income level by 2025 to upper-middle income level by 2030 and finally a developed country with a high-income level by 2045. Towards these goals, the party aims to achieve an average economic growth rate of 6.5 to 7 per cent in the next five years. It has the potentials to achieve its targets but would have to cope with a lot of challenges.
Even in the past, the party in Vietnam set ambitious goals for its socio-economic development plans. For example, at its 8th National Congress in 1996, the party envisioned Vietnam to become an industrialized economy by 2020. The goals were not realised and this was admitted at the 12th gathering in 2016. Though Vietnam stands on a better footing now than what was a quarter century ago, the latest target is no less ambitious. It may be remembered that since the end of World War II, only a few countries such as Singapore and South Korea were able to transform themselves into developed economies. It is up to the new leadership in Vietnam to place the country in the same category and given the recent trends, this can be possible.
The path for the future is well-defined. The new leadership is now tasked with the responsibility to ensure transition Vietnam’s growth from a resource and labour-based model to one driven by high technology and innovation in the same pattern which Japan did in the 1960s and 1970s, when it unleashed the emergence of the Four Tigers in the flying geese pattern of economic development model. To realise such aims, Vietnam ought to invest more in human capital and improve its human development indicators. The initial steps give promise for such targets to be realisable if the thrust on digital economy, increased investment in R&D, and emphasis on hi-tech manufacturing sector are taken into account. These aspects are factored in the present analysis.
During the 13th Party Congress, an important decision was taken to re-elect Nguyen Phu Trong as the general secretary of the Vietnam Communist Party, a rare and unprecedented third term, demonstrating the thrust to secure stability to achieve the defined goals. Confidence was reposed on Trong because of his experience so that he could be the anchor to steer the country towards its development goals. Also, the elevation of Pham Minh Chinh to the position of Prime Minister to be confirmed after the first session of Vietnam’s national assembly is a bold choice aimed at ensuring flexibility and continuation of reforms. As the former party secretary of Quang Ninh Province, Chinh has rich experience in contributing to the development of the province and is expected to bring those now for the development of the entire country. He was also responsible to bring efficiency in the governance process in the province. His focus to develop special economic zones could also contribute to the development of the country’s economy and meet the development goals. The former Deputy Prime Minister Vuong Dinh Hue, Politburo member and Secretary of the Hanoi Party Committee, was elected as Chairman of the National Assembly and the National Election Council at the 11thg sitting of the 14th legislature on 31 March 2021.
During Chinh’s stewardship, the thrust is expected to shift towards digital communication, automation and artificial intelligence as these present significant socio-economic challenges. Though formal confirmation for Chinh’s elevation is awaited, the adoption of new age technologies as a force multiplier cannot be reversed and therefore his focus is to put the country on a higher qualitative growth trajectory. His stress on more reforms through application of cutting-edge technologies in knowledge-based industries would further contribute to the development of the country’s economy.
The new leadership combination between general secretary Trong and the new prime minister with focus on further reforms is expected to put Vietnam into a new era, an era of more growth, more prosperity and more welfare for its people. Growth in Vietnam shall have inevitably spill-over effect on the rest of the South East Asia, further strengthening supply chain. Such a development shall also pave the way for Vietnam’s integration with the international community.
The new positions will be officially confirmed at the first session of the new National Assembly in July. In the set up, while the 76-year-old Trong as the party head shall take care of overall policy direction and party issues, the President and the National Assembly chair with mostly ceremonial positions will have little influence over policy implementation. Chinh as the next prime minister will be the actual person in charge to execute the Congress’ ambitious development plans for the next five years and therefore all focus would be on him. His relative inexperience on national economic management could be an asset as he would be more energised to carry forward and execute the ambitious development goals as carved out by the Party Congress.
With fruitful experiences of different positions that Chinh has held till now, he is well aware of his new responsibilities and is expected to do excellent on new proposed position. If he is able to execute the policies defined at the Party Congress and lead Vietnam to achieve its development goals, the Party’s decision deserves appreciation. The past trends do not project any pessimistic scenario.