Dr Giang Thanh Long, professor at the National Economics University. Photo neu.edu.vn

In an interview with Đầu tư (Investment Review) newspaper, Dr Giang Thanh Long, professor at the National Economics University, underscored that high economic growth must align with sustainable social development.

Regarding Việt Nam’s goal to become an upper-middle-income country by 2030 and a high-income country by 2045, many people say the focus should be on industrial development, particularly manufacturing and processing. What is your opinion on this?

It is the right choice. In earlier development stages, every country places strong emphasis on industrialisation, especially manufacturing and processing. However, if we aim for sustainable development, we must not underestimate the role of agriculture.

Looking at the miraculous development of East Asian countries between 1960-1990 (Republic of Korea and Japan) and 1980-2010 (China), we can see that while they focused on industrial development, agriculture was not neglected. Ensuring food security was a special priority.

Japan, for example, saw its agricultural labour force drop by a yearly average of 3 per cent during its period of rapid economic development, yet labour productivity still increased by about 4.5 per cent annually.

Alongside industrial development and double-digit economic growth rates, Japan managed to ensure food security and became one of the world’s largest economies.

Japan, the Republic of Korea and China have achieved many economic successes but are now facing serious challenges. What are the lessons Việt Nam can learn?

National development, in addition to high incomes and strong social welfare, must take into account a balanced population size. Japan, the Republic of Korea, China and other developed economies are now dealing with population ageing, declining population size, a shrinking workforce and increasing retirees. This is a tough problem because life expectancy keeps rising, and once the population declines, it is extremely hard to reverse.

Foreseeing this, the Party Central Committee issued Resolution No 21-NQ/TW in 2017 on population matters in the new era, which identified population as a key factor in national development and defence.

Population policy is a strategic, urgent and long-term task. It requires a comprehensive approach in terms of size, structure, distribution and especially quality, in alignment with socio-economic, defence and security factors to ensure sustainable development.

Resolution No 21-NQ/TW also asserts that investment in population work is investment in development. The State gives priority to allocating budgets and resources to population initiatives. Recently, the National Assembly Standing Committee amended the Population Ordinance (effective from June 18, 2025) to legislate the Party’s population policies and directions, including officially ending birth restrictions.

Việt Nam is projected to reach peak population by 2039 at the latest, after which the population will decline. — VNA/VNS Photo

Are the Party’s recent directives and the State’s policies on population work timely and appropriate measures?

Việt Nam is undergoing major demographic changes: we are still in the period of demographic dividend (with 67.4 per cent of the population aged 15-64), but population growth is slowing and the ageing rate is accelerating, among the top 10 fastest-ageing countries globally.

According to data from the General Statistics Office of Việt Nam (GSO, under the Ministry of Finance), Việt Nam’s fertility rate has fallen sharply from 2.11 children per woman in 2021 to 1.96 in 2024. As many as 32 out of 63 current cities and provinces now have fertility rates below the replacement level (two children born per woman).

Without both urgent and long-term strategic policies, Việt Nam is projected to reach peak population by 2039 at the latest, after which the population will decline. By then, even if we reach high-income status, we will face major labour shortages and huge welfare burdens due to population ageing.

In 2024, there are 14.2 million people aged 60 and above, an increase of 2.8 million since 2019. By 2030, this number will reach around 18 million. By 2038, it will rise to 22.29 million, or over 20.2 per cent of the population. By 2049, the elderly population is expected to reach 28.61 million, or about a quarter of the population.

With 25 per cent of the population being the elderly, pensioners and social welfare recipients will increase while contributors to the pension fund (social insurance) will decline, resulting in pension fund deficits that the state budget must cover. Then, even with significantly higher per capita income, we will still face enormous challenges.

Learning from the examples of Europe, Japan, the Republic of Korea and China, the Party promptly issued Resolution 21-NQ/TW, while the National Assembly Standing Committee amended the Population Ordinance. These timely legal documents show that we not only aim for fast economic growth, but more importantly, for sustainable social development.

From a labour perspective, what should be done for a double-digit GDP growth rate in the near future?

Việt Nam’s current median age is 41, meaning half the population is younger than 41, and the other half is older. We are in a phase of digital transformation and innovation. With a median age of 41, there must be clear policies to universalise digital skills across the population.

Party General Secretary Tô Lâm has proposed a compelling concept of 'digital literacy for all', a foundation for building a digital society, digital nation and digital citizenry. Only then can we enhance scientific, technological and innovative capacity, boost labour productivity, and achieve rapid, sustainable growth.

However, with a median age of 41, many older people tend to take more time to learn new knowledge, especially in information technology (IT). Therefore, 'digital literacy for all' needs diverse and suitable policies in place.

We talk much about high-skilled labour, especially in semiconductors, IT and electronics. But high-tech workers make up only 2.9 per cent of the total workforce. The challenge is how to raise the overall labour productivity when the share of skilled workers remains modest compared to the total workforce in the economy.

Other issues include the income gap between economic regions, localities and between urban and rural areas.

According to the GSO, the monthly per capita income in the northern midlands and mountains (the most disadvantaged region) rose from VNĐ1.613 million (US$62) in 2014 to VNĐ3.759 million ($144) in 2024. In the same period, the southeastern region increased from VNĐ4.125 million ($158) to VNĐ7.075 million ($271). This means wealth gaps are widening between regions.

The stance of the Party and the State is to 'leave no one behind'. Provinces with more favourable conditions should support those with fewer resources.

Land-related revenues (from land use rights auctions, land leases) account for a large portion of state revenue. Under the current State Budget Law, land revenues are fully retained by local governments. Therefore, wealthier provinces can invest more, while disadvantaged provinces lack funds.

To ensure balanced and sustainable growth, the draft revised State Budget Law, developed by the Ministry of Finance, proposes redistributing land revenues, in which self-sufficient localities would keep 70 per cent, and those still receiving support from the state budget would retain 80 per cent, with the remainder to be returned to the state budget.

This would provide the central government with resources to invest in underprivileged regions for the whole country to grow together. — VNS