Asia is emerging as the most dynamic economic development region in the world. However, many experts also worry that in the future, this region will have to face new challenges such as overcoming the middle income trap; enhancing institutional capacity and infrastructure to improve productivity; renovating and transforming the economy; developing human resource to improve productivity; and mobilising financial resources for sustainable development. This is the main content of the 5th Asian Development Forum (ADF) held recently in Hanoi.
Speaking at the event, Vietnamese Minister of Planning and Investment Bui Quang Vinh said the forum is a good opportunity for countries to learn and share management experience as well as economic development. The forum was attended by nearly 100 delegates from 11 countries and territories in Asia and development partner representatives.
Mr Takehiko Nakao, President of the Asian Development Bank (ADB) recommended that by 2050, Asia will be facing one of two economic scenarios. The first is “The Asian Age” with GDP 10 times that of 2010. The second is that Asia will be stuck in the middle income trap. Mr Nakao cited the example of China and Malaysia, which are facing these challenges. Vietnam and India are two countries which are trying to break out of this trap.
Minister Bui Quang Vinh said that to avoid the second scenario, Asian countries, especially those with average income levels, need to immediately devise effective and timely solutions to address these challenges. As for the economy of Vietnam, Minister Vinh also acknowledged that although Vietnam has achieved most of the Millennium Development Goals (MDGs), after 30 years of reform with important achievements in socio-economic development and poverty reduction, in the integration process, new challenges are posed, which requires coping strategies. As for the story on avoiding the middle income trap, the Government of Vietnam has been trying to find new ways to develop, implement strong economic structure reforms based on quality, productivity, efficiency and competitiveness, moving from development by the width to depth, and mobilizing wider participation of partners in the development process.
Mr Kensuke Tanake, Head of the Asian board of the Organization for Economic Cooperation and Development (OECD), offered a forecast timetable for the economies with middle income in Asia to become developed. In particular, Vietnam is in the group which will take the most time. Specifically, it will take 44 years for Vietnam to reach this high income level (2058), a year before India; Malaysia, China and Thailand are expected to exceed the average income in 2020, 2026, and 2031, respectively.
According to analysis by Prof Keun Lee, Seoul National University (Korea), the middle-income trap is defined as when a nation reaches the middle income level, it is stuck with low-wage producers who do not want to pay higher salaries. Middle-income trap needs more attention than poverty trap does because many countries, though having got out of poverty, are growing slowly. Thus, Prof Lee said that in its direction of development, each country should choose its own way, focusing on the development of key sectors in accordance with the conditions of the country. For example, Chile chose the wine industry, India diamond cutting, and Malaysia information technology services, after getting stuck in the middle-income trap. Besides, Prof Lee also assumed that for the industry sector to keep up the level of advanced countries, the governments of Asian countries should not protect, but instead, make opportunity for them to learn and gain experience to facilitate breakthrough in high-value segment and emerging industries.
Mr Masanori Yoshida, Deputy Director-General, International Bureau of the Japanese Ministry of Finance said that the goal of infrastructure development is also an important link for developing countries to avoid the middle income trap. However, the difference is that those countries commonly encounter difficulty in capital. Therefore, to find a solution, Mr Masanori Yoshida said that the government should have a policy to call for private capital into infrastructure. However, to attract financial resources from the private sector, the Governments need long-term policies and strong commitment, to manage risks and have methods to share responsibility between the state and the private sector,” Mr Masanori Yoshida highlighted.
Facing these challenges, commitment to financial aid as well as programs and projects of technical assistance to help stabilise the developing economies of Asia is needed. Mr Takehiko Nakao, ADB President gave an 8-point agenda including: macroeconomic stabilization; development in infrastructure, health, education, human investment; open trade regimes and mechanisms of good governance friendly to everyone; sharing common view. However, Mr Takehiko Nakao also noted that to achieve this goal, the key factor is that Asia needs an atmosphere of peace, stability and mutual trust.
As for the economy of Vietnam, Mr Takehiko Nakao also pledged to provide US$630 million over 10 years for trial restructuring to improve competitiveness of some state-owned enterprises (SOEs) in Vietnam. In addition, ADB also spent a lot of interest and incentives for the development of the private sector, especially small and medium enterprises in Vietnam. And though Vietnam has stable politics and macro-economy, two key elements of macroeconomic development, according to ADB, to restore sustainable and high economic growth, it is important to accelerate structural reforms mainly in the SOE sector, banking and public investment.
Anh Phuong
Đăng ký: VietNam News
