Vietnam Socio-Economic Forum 2023: Finding answers to 3 big questions

On the morning of September 19, at the National Convention Center (Hanoi), Politburo member and National Assembly Chairman Vuong Dinh Hue chaired the opening of the Vietnam Socio-Economic Forum 2023, with the participation of about 450 delegates attending in person.

The forum has the theme "Enhancing endogenous capacity, creating momentum for growth and sustainable development."

The National Assembly's Economic Committee, the Central Economic Committee, the Ho Chi Minh National Academy of Politics and the Vietnam Academy of Social Sciences jointly organized.

Co-chairing the Forum were Politburo members Nguyen Xuan Thang, Director of the Ho Chi Minh National Academy of Politics, Head of the Central Economic Commission Tran Tuan Anh, Permanent Vice Chairman of the National Assembly Tran Thanh Man; Secretary of the Party Central Committee, Deputy Prime Minister Le Minh Khai; Member of the Party Central Committee, Vice Chairman of the National Assembly Nguyen Duc Hai.

Also attending were leaders of the Party, State, former leaders of the Party, State, leaders of central and local ministries and branches; representatives of embassies, international organizations, economic groups, businessmen, experts, scientists at home and abroad...

In addition to the main bridge at the National Convention Center (NCC), the Forum also connects with six bridges of domestic academies and universities.

Contribute to issuing strong policies and responding promptly

Speaking at the opening of the Forum, National Assembly Chairman Vuong Dinh Hue emphasized that the Vietnam Socio-Economic Forum is an annual event of the National Assembly.

The success of the Economic Forum 2021 and the Socio-Economic Forum 2022 with the theme "Strengthening the macroeconomic foundation, recovery and sustainable development" has left many valuable lessons, many scientific arguments with high practicality, providing useful information to effectively serve research and management work, especially policy-making work of state management agencies.

Many useful proposals and suggestions at the Forum were reviewed and studied by the National Assembly, the National Assembly Standing Committee, the Government, relevant agencies and organizations to develop, perfect and promulgate mechanisms and policies that are strong and drastic enough to respond promptly, remove difficulties, and promote economic development on the basis of suitability to the latest context and situation, which is the requirement to serve the dual task of both controlling COVID-19 and recovering and developing the economy and society.

Following the success of the 2021 Forum, many proposals and policy suggestions at the 2022 Socio-Economic Forum have been promptly researched and selected in the process of building and perfecting Resolution No. 68/2022/QH15 on the Socio-Economic Development Plan for 2023, in which the focus throughout 2023 is "consolidating and strengthening the macroeconomic foundation, enhancing internal capacity, self-reliance, autonomy, resilience and adaptability of the economy," ensuring macroeconomic stability as a "constant" factor to respond to the "variability" of the international economic situation and an important "key" for Vietnam to develop its socio-economy and stabilize people's lives. This is also the main message of the 2022 Forum.

The policies proposed at the 2022 Forum will continue to be studied by the National Assembly, the National Assembly Standing Committee, the Government, relevant agencies and organizations to develop and issue strong policies to promptly respond to the new situation; including Resolution No. 101/2023/QH15 on the 5th Session of the 15th National Assembly, policies on tax, fee, land use fee exemption, reduction, extension, value added tax reduction, loan interest rate reduction, implementation of credit packages, establishment of regional coordination councils, promotion of regional linkages...; or allowing the pilot application of many specific and outstanding mechanisms and policies to develop Ho Chi Minh City, one of the important locomotives of the economy.

“Thanks to the correct, timely and unprecedented policies and solutions in recent times, under the strong, synchronous and effective leadership and direction of the Party Central Committee, the Politburo and the Secretariat, together with the support and supervision of the National Assembly and the strong management of the Government, looking at the whole of the past half-term, Vietnam has basically firmly overcome difficulties and challenges in the face of 'headwinds' and achieved many important and quite comprehensive results," the National Assembly Chairman stated.

The economy maintained its growth momentum and was a bright spot in the "gray picture" of the global economy. The macro economy was stable, inflation was controlled, the national credit rating and international position continued to improve. Major balances were ensured, the ratio of public debt, foreign debt, and budget deficit were all below the threshold allowed by the National Assembly; bad debt was controlled, and the exchange rate was quite stable. Agricultural production continued to play the role of "supporting" the economy, and food security was ensured. Important national projects and works, creating new development space for localities, regions and the whole country were promoted; further strengthening the confidence of businesses and investors, supporting the sustainable development of industries and fields.

In the first 8 months of 2023, FDI attraction, public investment disbursement, and the service sector have more positive changes, total retail sales of goods and consumer service revenue in the first 8 months increased by about 10%, international visitors are expected to soon reach and exceed the annual target (8 million visitors); some key industrial areas have recovered or maintained rapid growth such as Hai Phong, Bac Ninh, Ho Chi Minh City...; social security work is of interest, ensuring that 100% of people affected by natural disasters, floods, and hunger receive timely assistance; activities to strengthen supply-demand connections and support workers continue to be promoted.

Identify difficulties and challenges

The National Assembly Chairman assessed that despite the important results achieved in recent times, it can be seen that the economy is still facing many difficulties and challenges. Economic growth in the first 6 months of 2023 reached only 3.72%, nearly the lowest in the past 12 years, creating great pressure on GDP growth for the remaining 2 quarters of the year, making it extremely difficult to achieve the growth target for 2023, the 5-year period of 2021-2025 and the entire strategic period of 2021-2030.

Many key growth drivers of the economy in the first eight months of 2023 are showing signs of slowing down, even declining, and are under great pressure from the outside.

Specifically, merchandise exports continued to decline, down 10% in the first 8 months of the year compared to the same period last year, the sharpest decline in the same period in the past 12 years; many key export groups, especially phones, components, footwear, textiles, and wooden furniture continued to decline sharply. Major export markets such as China, the US, ASEAN, South Korea, the EU, Japan, etc. decreased or increased at a very low level.

The trade surplus increased due to the decrease in input material imports, indicating that the demand for domestic production inputs continues to slow down. In addition to the problem of sharp decline in global demand, high logistics costs and other costs (labor costs, input materials, etc.) in Vietnam, the greening process in some sectors is still slow, making some of Vietnam's export products less competitive than other countries (for example, textiles and garments). Meanwhile, the production capacity of the economy remains low with the need to import most of the technology, machinery, equipment, spare parts, and raw materials for production.

In the current economic structure, the foreign direct investment (FDI) sector is contributing about 20% of GDP, accounting for nearly 74% of total export value. However, FDI attraction is not really sustainable; registered capital has continuously decreased in the first 6 months of the year. Since July, registered capital has increased again thanks to a number of large projects from Korea and Singapore. However, in general, FDI attraction still faces many challenges, especially in attracting large-scale, high-tech projects with deep and wide spillover effects, contributing greatly to socio-economic development. The increasing import of the FDI sector shows that connectivity and domestic production capacity are still limited.

Public investment is considered an important driving force for economic growth in 2023. Recently, the National Assembly has issued many specific policies to promote the disbursement of public investment capital. However, up to now, although the disbursement of public investment capital has improved (8 months reached 42.35% of the plan), it has not reached the expected level, has not spread to private investment, and has not demonstrated a core role in promoting economic growth.

Some central and local agencies disburse capital at a lower rate than the general level. The most reported problems are related to legal procedures related to land, compensation, support, resettlement, conversion of forest and agricultural land use purposes, and delayed administrative procedures due to officials, civil servants, and public employees evading and shirking responsibility.

The industrial and construction sector is no longer the main growth driver of the economy, in which the processing and manufacturing industry, once considered the driving force for growth for many years, is now in decline, with a decrease of 0.49% in the first quarter and a low increase of only 0.44% in the first 6 months. The industrial production index (IIP) for the first 8 months still decreased by 0.4% (while it increased by 10.1% in the same period). The slow development of supporting industries has prevented Vietnam from participating deeply in the global supply chain.

Domestic consumption has not recovered firmly. The service sector currently contributes 79% to GDP growth, is one of the most important growth drivers in 2023 and since the beginning of the year, many policies to support this sector have been issued such as reducing interest rates, reducing 2% value added tax on some goods, increasing basic salary...

Total retail sales and consumer service revenue in the first 8 months maintained growth momentum, but are showing signs of slowing down. The domestic market has not been effectively promoted, in which the corporate bond market and real estate market are facing many difficulties and potential risks.

Domestically, the resilience of many businesses is being eroded, many orders are being cut, production and business activities are facing difficulties, especially in terms of output markets, cash flow, capital mobilization, administrative procedures and increasing pressure from market and partner requirements for sustainable development.

The labor market is facing difficulties as businesses have to reduce working hours and shifts. There are not many strong, large-scale economic groups in the country that play a leading role in organizing supply chains and domestic production ecosystems; businesses are mainly medium, small and micro-sized, with low production technology and are heavily dependent on imported inputs.

The endogenous capacity, autonomy, and resilience of businesses and the economy are still limited and have become more evident than ever before in the face of the adverse impacts of the world economic and political situation since the beginning of the term.

According to the National Assembly Chairman, these are all fundamental, long-term, topical and urgent issues, requiring immediate short-term solutions and fundamental, strategic and long-term solutions.

Strengthen internal strength, effectively exploit external strength to adapt and develop

The National Assembly Chairman said that through crises, difficulties and challenges, we are increasingly aware of the importance and decisive role of internal strength, self-reliance and autonomy in economic development.

From the reality of rising up during the pandemic when facing harsh difficulties and challenges like the past 3 years, one of the most important lessons is to build and promote strong internal strength to cope with challenges and the uncertain nature of external factors.

The National Assembly Chairman stated: “We need to strengthen and promote internal resources, effectively utilize and exploit external resources to adapt and develop. This is considered a top and continuous task, especially in the new context and situation with many fluctuations and increasing risks. Vietnam needs to focus on solving internal challenges both in the immediate, medium and long term."

Based on that situation, the National Assembly Standing Committee considered and decided to choose the issue of "Enhancing endogenous capacity, creating momentum for growth and sustainable development" as the theme for the Vietnam Socio-Economic Forum 2023.

With the spirit of "unanimity, solidarity, and overcoming difficulties together," to achieve the practical goals of the Forum, the National Assembly Chairman wishes to listen to opinions, exchange, focus on discussing and finding answers to the following three major questions:

First, what is the forecast of the regional and global economic and financial situation, opportunities, risks and challenges for the Vietnamese economy in 2023, 2024 and in the following period?

Second, identify the current socio-economic situation, the main difficulties, challenges, bottlenecks and resilience of the Vietnamese economy, businesses and workers, and forecast for the whole year 2023, 2024 and the whole 5-year period 2021-2025?

Third, what are the endogenous capacities, driving forces and fundamental solutions to remove bottlenecks, unblock resources, strengthen internal strength, and create momentum for socio-economic growth and development in 2023, 2024 and for the entire 2021-2025 term?

The forum took place over 1 day with an opening session, a plenary session, a thematic session 1 on "Strengthening internal strength, unleashing resources, supporting businesses to overcome difficulties" and a thematic session 2 on "Improving labor productivity and ensuring social security in the new context."

Opening the Forum, the National Assembly Chairman asked speakers and delegates to exchange and discuss briefly and focusedly, going straight to the core and central contents, and proposing specific and practical solutions.

The National Assembly Chairman said that based on the proposals, recommendations and solutions, immediately after the end of the Forum, the Forum Organizing Committee will develop a summary report to send to the National Assembly, the Government, ministries, departments, branches and localities to promptly serve the 6th session of the 15th National Assembly, scheduled to open on October 23, and the work of planning and implementing the country's socio-economic development policies and guidelines.

Next, Politburo member and Director of the Ho Chi Minh National Academy of Politics Nguyen Xuan Thang gave an important speech.