Le Dinh An, former director of the National Centre for Socio-economic Information and Forecast, says the economic growth model that depends on exports has become out of date because of the low competitiveness of domestic products and foreign countries' increasing propensity to protect local products.
"Meanwhile, domestic resources have not been fully exploited or properly allocated," he says. "So if we do not re-allocate resources, the economy cannot ‘take off'.
"I agree with those who say that the economy must be developed with an emphasis on advanced technology and value creation.
"However, to properly distribute resources, we also need to remove the so-called ‘privileged groups' which are said to be the biggest obstacle in the restructuring process. — VNS
One of the architects of the Master Plan for Economic Restructuring, Nguyen Dinh Cung, of the Central Institute for Economic Management, spoke to Thoi Bao Ngan Hang (Banking Times) on its ramifications.
In your opinion, what is new and significant about the plan?
The plan aims to set up a suitable road map for economic growth. A high value-added economy will be established with an improved competitive capacity.
The goal of the restructuring process is to re-allocate resources, because the current bad situation is caused by the improper allocation of resources. Once resources are allocated more suitably, they will lead to increases in productivity and competitiveness.
The market mechanism will determine which sectors and products resources should be invested in. Priority will be given to sectors that use advanced technology and create value-added products.
Some people think that the implementation of the plan will meet many difficulties. What is your opinion?
It is true that implementing the plan will not be easy. We cannot expect that the plan will create an immediate change because everything needs to be done step by step.
We should not mention difficulties too much. Instead, we should focus on our determination to realise the plan. If we still hesitate and are not ready to pay for our mistakes, then we cannot solve the problem of the whole economy.
How will we create a driving force for restructuring the economy?
One thing that needs to be done right now is making State-owned enterprises more public and transparent. In the master plan, the Prime Minister requires that as of this year, the investment activities of State-owned enterprises and agencies must be publicized every year. When these enterprises are closely monitored, they will face pressure to change.
For example, to solve bad debts in the banking sector, an immediate solution is to sell properties as collateral while waiting for real estate prices to bounce back. This will help maintain the flow of capital.
As long as we wait for the Government's policies to help recover the property market, both real estate enterprises and banks will not dare to sell their assets.
In conclusion, the economy must be operated in line with market mechanisms. — VNS