Speech at the Spring Economic Forum

Apr 7, 2012

Speaker: Ms. Setsuko Yamazaki, UNDP Country Director     
Date:       7 April 2012
Event:     Spring Economic Forum

H.E. Nguyen Sinh Hung, Chairman of the National Assembly; (Delete?)
H.E. Nguyen Thi Kim Ngan, Vice Chairwoman of the National Assembly;
Mr. Nguyen Van Giau, Chairman of the Economic Affairs Commission of the National Assembly;
Distinguished National Assembly Members and Guests;
Colleagues and friends; 

The timing of today’s event is excellent. Our discussion over the next two days on issues such as renovating the growth model, restructuring the economy, reforms in public investment, SOEs and the financial sectors will contribute to Government proposals on these very topics.

Today’s event also clearly demonstrates how the National Assembly and the Economic Committee in particular are strengthening their oversight and policy advisory functions by making greater use of high quality data and evidence, as well as academic analysis and recommendations.

At the UN, we believe that good quality, objective and comprehensive analyses, as well as open and constructive policy debates, play an important role in supporting Viet Nam’s leaders to make good choices to address the short-term socio-economic development as well as the long-term development of the country. As such, we welcome and are happy to support the partnership between the academic community, policy makers and policy oversight agencies.

I do not want to elaborate on the macro-economic situation as this will be discussed in detail over the next two days of the workshop. Let me instead offer my perspective on a few topics of relevance to your further discussions.

First of all, the need to learn from international experience. From experience we know that the key to reform of SOEs, the banking and financial sectors and public investment is to establish transparent processes and sound institutions with checks and balances and accountability which will help ensure compliance to the highest standards. Experience also shows that well-thought-through technical measures and an appropriate sequencing of reforms are important to ensure success of such reforms. While we understand that Viet Nam’s situation is not identical to other countries that have undertaken similar reforms, we believe that learning from international experience will help Viet Nam build on the lessons learnt by contextualizing the knowledge into Viet Nam’s needs, and thereby contributing to the success of its reforms. With our extensive networks in more than 177 countries, we stand ready to bring to Viet Nam relevant international experience and expertise, depending on the need of our partners.

The second topic I want to touch on is green growth. We appreciate Viet Nam’s efforts to develop a comprehensive green growth strategy. Such a strategy will help Viet Nam to access clean technology, develop new and more productive jobs and at the same time address environmental concerns. Green growth investment will not only help to prevent future costs and sustain current development progress, but is also very much in line with the SEDS call for a new growth model for a middle-income Viet Nam which is more productive and competitive.

Last, but perhaps most importantly, Viet Nam also needs to focus on human development. The ultimate goal of any growth model or efforts to restructure the economy should be to improve the well-being of all citizens. International experience, including from the North African and Arab region, shows that economic growth is necessary but not sufficient to achieve this goal. The 2011 Viet Nam Human Development Report demonstrates that Viet Nam’s human development progress has mainly been driven by economic growth and less so by progress in, for instance, health and education. While the aggregate data for human development and the Millennium Development Goals shows that Viet Nam is on track, the Human Development Report points out that there are increasing human development disparities at the sub-national level - between regions, population groups, and gender. In other words, there is room for improvement in ensuring that further economic growth is translated into further improvements in Vietnamese people’s overall well-being.

Before I end, I would also like to provide a few comments more specifically related to the workshop.

  • Firstly, in the short-term, while dealing with macro-economic instability and economic restructuring, the costs associated with the reforms and the implications for social development need to be calculated and considered carefully. It is important to devise measures to ensure that the reforms do not negatively impact on social expenditure, and/or depress GDP growth below a level at which job creation and poverty reduction cannot be supported.
  • As the reforms continue, a more efficient use of public resources has the potential to not only contribute to economic growth but also to free up resources for investment in social services and environmental sustainability. At present, only 15.2% of public investment is spent on social services. External and independent oversight of public investment, including by the National Assembly, is required to ensure that sufficient socio-economic returns are generated from public investment projects and that the investments in people, human capital, social services and environmental protection are not compromised. The quality and standards of public investment is critical not only to achieve efficiency of such public investment in terms of ICOR but also to bring real benefits for the people and their well-being.
  • Finally, reforms in social service sectors may also need to be considered. There is increasing evidence that as a result of the socialization policy, as the share of state expenditure in the country’s overall expenditure on health and education is getting smaller and the out-of-pocket payments of households getting bigger, poor groups are less able to access and afford these services. The privatization and commercialization of these services also contributes to increasing the inefficiency of Viet Nam’s expenditure in these sectors.

There are challenges ahead, but we believe that the Government will make successful choices in restructuring its economy and development model, with guidance by the National Assembly and the Committee of Economic Affairs in particular. This will result in a better quality of life for all Vietnamese women and men, girls and boys, young and old, Kinh and minority people, in all households and communes in Viet Nam.    

Let me end by thanking the organizers for all the preparation work that has made this workshop possible and to wish all of you open, frank and fruitful discussions.

Chuc cac dai bieu suc khoe va thanh dat.