Vietnam ranks fourth in new ’well-being’ study

Illustrative image (Source: VNA)

Hanoi (VNA) – Vietnam has ranked fourth out of 149 countries assessed for how well they convert national wealth into well-being for the population, according to a recent analysis from The Boston Consulting Group’s (BCG) Sustainable Economic Development Assessment (SEDA).

The results are detailed in BCG’s inaugural SEDA report for Vietnam, the Lotus Nation: Sustaining Vietnam’s Impressive Gains in Well-Being, which was released on March 22.

The analysis has found that Vietnam, which has GDP per capita (based on purchasing-power parity) of approximately 5,200 USD, has well-being levels that would be expected of a country with GDP per capita of more than 10,000 USD. Vietnam is also above average in converting economic growth into well-being improvements.

Chris Malone, BCG partner and a Vietnam-based economic development expert, said, “The latest findings indicate what we have believed all along – that Vietnam’s success in harnessing its limited resources for the good of its citizens is impressive and comparable to higher-income countries. This is particularly noteworthy given the country’s remarkable pace of economic growth of about 7.1 percent annually from 2006 to 2013."

However, Vietnam ranks near the bottom of the ASEAN 4 - which includes Malaysia, the Philippines, Thailand, and Indonesia - in income, infrastructure, governance and the environment. And while Vietnam’s score in the employment dimension is in line with that of its four ASEAN peers, the country faces a number of significant issues in the labour market - including low labour productivity and a significantly smaller base of skilled workers – that could create challenges in sustaining the current pace of development.

Based on insights from SEDA, as well as BCG’s extensive experience working with companies and public-sector leaders in Vietnam, the report recommends upgrading the workforce by improving links between industry and providers of training and education, and steering young people toward high-demand sectors. The report also suggests a robust performance management system for the country’s education institutions.

Infrastructure will require an estimated investment of 113 billion USD to 140 billion USD by 2020, but only 50 percent to 60 percent of that can be funded through the Government’s budget. Vietnam can learn from the Republic of Korea and India by improving the way it plans and executes public-private partnerships in order to draw in more private-sector investment and deliver the highest impact, the report says.

The study also says that improving governance is key to increasing foreign investors’ confidence in Vietnam, which will require the country to strengthen its institutions and use digital tools in order to help increase transparency.

SEDA, a diagnostic tool based on objective data, is designed to provide government leaders with a perspective on the well-being of citizens. It defines well-being – essentially a country’s standard of living – by examining 10 dimensions, such as economic stability, health, governance and the environment.-VNA