Workers process garment products. Policies on developing the industrial sector will play an important role to overcome middle income trap in Vietnam. (Photo: vietstock.vn) Hanoi (VNA) - Policies to developthe industrial sector will be the key to keeping Vietnam’s out of the middle incometrap, experts said at a workshop in Hanoi on May 23.
The middle-income trap is closely tied toeconomic growth, so if growth doesn’t stay high and for decades and there isnot high income per capita, the nation will fall into the middle income trap, saidDeputy Director of the Central Institute of Economic Management (CIEM) NguyenThi Tue Anh.
Policy is one of the most important factors topromote industrial development, she said.
Vietnam is also facing challenges in overcomingthe middle-income trap requiring suitable management from the Government, shesaid.
According to Deputy Director of the GeneralEconomics Department under the Party Central Committee’s Economic Commission HoangTruong Giang, the labour force and workers’ skills are hugely important, so Vietnammust improve labour productivity of workers and enterprises.
Ngo Minh Tuan, a CIEM researcher, said Vietnammust focus on developing several fundamental industries and meeting the demandfor basic means of production in the economy.
Vietnam also needs to focus on developingsupport industries, strengthening links between multinational corporations anddomestic enterprises, forming support industrial complexes and linkingcommodity chains, he said.
Tue Anh said so far, only a few countries haveovercome the middle-income trap. According to the CIEM's research, productivitygrowth is a decisive factor in Vietnam’s solutions on overcoming the middle-incometrap, with support from reforms of technology and institution.
The Government has directed economicrestructuring towards industrialisation and transformation from agriculturaleconomy to industrial economy, aiming to increase labour productivity andincome per capita as well as to upgrade all industrial sectors.
First of all, the processing and manufacturingindustry produces higher value-added and more complicated products and increaselabour productivity, she said.
In addition, the Government has employed asolution to restructure the manufacturing and processing industry fromproducing consumer goods such as food, garment, tobacco and wood, to capitalgoods such as chemicals and metals, machinery and equipment and motor vehicles.
According to Tue Anh, the Government, theauthorities need to find ways to mobilise maximum potential and take advantageof opportunities for focusing on support industrial development, wit a focus onthe private sector.-VNA
VNA
