Positive changes in economic restructuring with transformed growth model

The economic restructuring was reviewed recently by Minister of Planning and Industry Nguyen Chi Dung in a government report presented at the ongoing sixth session of the 14^th National Assembly in Hanoi.

The report indicates that nine of 22 targets for economic restructuring has been fulfilled. Eight of the 22 targets are underway and five others need drastic measures to be completed. Until now, 77% of the set targets have been completed or due for completion.

Reviewing economic restructuring and growth model reform in the 2016-2018 period, Minister Dung highlighted positive changes in the quality of annual economic growth and labour productivity, which have seen remarkable improvements.

For example, total-factor productivity (TFP) contribution to economic growth in the 2016-2018 period has been on a sharp increase of 42.18%, significantly higher than the 2011-2015 period at 33.58% and has even surpassed the set targets.

Notably, there has been a visible improvement in investment efficiency with the incremental capital-output ratio (ICOR) falling to 6.42 in 2016 and 6.11 in 2017.

The role of the private sector has been enhanced through the economic restructuring, as showed by the ever-increasing number of newly-established businesses and their higher registered capital while the number of businesses with temporary suspension of operations has tended to decline through the years.

In the 2016-2018 period, FDI attraction has also produced impressive results with a total registered  capital rising to a whopping US$99.5 billion, up 73.7% over the 2011-2013 period, and up 40% against the set plan in the reviewed period.

The report said despite having drastic changes in economic restructuring growth model reform, the national economy is still facing numerous difficulties such as unsustainable economic growth and still high level of dependence on foreign-invested sector.

Judging from the factors, the government underlined that economic restructuring and growth model reform should be realized drastically in the 2019-2020 period so as to ensure macroeconomic stability and increase labour productivity, coupled with creative innovation which serve as the driving force behind economic growth for the 2018-2020 period.