INT'L CONFERENCE ON VIETNAM'S REGIONALISM AND MODERNISATION
Vietnam needs reforms : Vu Khoan
Vietnam needs to huge growth to be like Thailand - in 1995
Vietnam needed to maintain annual economic growth of at least 8 per cent for more than a decade in order to achieve the same gross domestic product per capita that Thailand had in 1995 - by 2020, an expert said yesterday.
It would be a big challenge to reach GDP per capita of US$1,800 or Bt62,640, said Shozo Sakata, associate senior fellow at the Japan External Trade Organisation.
Southeast Asian countries have enjoyed high growth since the 1980s but only Singapore had achieved over 8 per cent for more than 15 years, he told a conference on Vietnam's economy.
"Vietnam must make further efforts to maintain longterm growth," said Sakata in the conferŽence coorganised by Asia News Network, a grouping of 16 Asian newspapers including The Nation.
Vietnam must concentrate on development of its manufacturing sector because it could generate employment and produce more value than agriculture.
The manufacturing sector was growing in Vietnam but accounted for only 20 per cent of GDP.
"Vietnam's manufacturing will need to grow by more than 11.5 per cent annually for another 13 years until the share reaches 30 per cent of GDP - around the same share as Thailand of 1995," Sakata said.
Foreign direct investment (FDI) was the significant way to achieve growth in manufacturing, he noted. Its flow to Vietnam had rapŽidly increased since 2003 and hit $10 billion in 2006, but it was not certain this boom would last.
Sakata said investors in Vietnam mostly cited cheap labour as their reason for investment but the country would lose its advanŽtage after becoming a middleincome developing country.
The China factor is another key element. "How long they keep interested in investing in Vietnam depends on the improvement of the business environment in China," he said.
Vietnam needed highquality labour, rather than cheap workers, to serve FDI in the manufacturing sector, he said. "High quality could attract more FDI because it proŽduces higher added value, which offsets increasing labour costs."
Supalak Ganjanakhundee
The Nation
Ho Chi Minh City
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