Vietnam’s accession to the World Trade Organisation (WTO) has been positive for the economy but it also poses certain challenges, said Tran Dinh Thien, director of the Vietnam Economics Institute. 

After joining the global trade body in 2007, foreign direct investment into the country rose dramatically, as did exports, he said. 

But accession to the WTO has also revealed the economy’s weakness, including poor quality growth, inadequate infrastructure, high inflation, poor human resources, and low competitiveness. 

The quality of human resources has yet to be improved and co-ordination between businesses to achieve a combined strength remains scattered, confessed Thien. 

Nguyen Dinh Cung, Deputy Director of the Central Institute of Economic Management, said: “We need to develop new economic mechanisms”. 

Economic growth in recent years has been mainly due to the transformation from agriculture to industry and services, while productivity has barely increased, he explained. 

With its weak economic structure, the country will find it very hard to become a modern economy by 2020, added Cung. 

Tran Du Lich, deputy head of the delegation from HCM City National Assembly, said that the main problem facing the Vietnamese economy is not a shortage of capital, but how to use it effectively. 

“Our economy rests on three weak pillars- weak economic institutions, poor human resources and poor infrastructure. These factors do not ensure stability when absorbing capital in an effective and sustainable manner. The country needs measures to shore up these pillars”, he said. 

When restructuring the economy, the city needs to focus on improving the quality of its urban infrastructure, creating level playing fields for every business sector and upgrade the city’s infrastructure and training facilities. 

The Government should stabilise the macro economy to retain the public and the market’s trust and improve the effectiveness of public investment and the role played by State-owned groups. 

But the country has yet to assess the impact of Vietnam’s accession to the WTO, a task that requires great skills, said Lich.