High-Level Forum Discusses Vietnam’s Strategies to Support COVID-19 Recovery, Sustain Longer-Term Growth
HANOI, September 29, 2020 – The Government of Vietnam and key development partners convened today at the annual dialogue platform, “Vietnam Reform and Development Forum 2020,” to discuss how to harness opportunities emerging from the COVID-19 pandemic to support a robust recovery and sustain longer-term growth.
The forum takes place in a challenging context which requires Vietnam to make difficult adjustments to its medium-term development plan and long-term strategy. COVID-19 impacts are compounding the existing slow-down trends in growth of trade, GDP, and productivity since the global crisis of 2007-09 and have disrupted global production networks on an unprecedented scale.
Australian Ambassador to Vietnam H.E Robyn Mudie said: “A commitment to inclusive and sustainable growth will help Vietnam overcome the economic challenges created by COVID-19, and help its economy thrive in a post-COVID world. Australia is proud to support the Vietnam Reform and Development Forum, in a partnership with the World Bank.”
At the same time, the impacts of COVID-19 can also bring about opportunities that might benefit developing countries. For Vietnam, forum participants—which comprise of policy-makers, economists and private sector executives—identified the two most important mega-trends to be the shift in the global value chains and investment system and the rise of the contact-free economy.
“These two trends, which are not entirely new, are now speeding up due to COVID-19”, said Carolyn Turk, Country Director for the World Bank in Vietnam. “By strengthening reforms in these two areas in an effective manner, and the way it has handled the COVID-19 health crisis, Vietnam could leverage these trends to get back on track towards its aspiration of becoming a high-income country by 2045.”
The COVID-19 pandemic has revealed the fragility of global value chains (GVCs) which are built around just a few hubs and has provided new impetus to the ongoing reconfiguration of the global production network towards more flexibility and agility. The shift to a more diverse, short-distance network offers a unique opportunity for Vietnam to deepen its participation in global and regional GVCs. The World Bank estimates that a 1% increase in GVC participation boosts per capita income levels by more than 1% – about twice as much as conventional trade.
At the same time, the pandemic might permanently reshape behavior habits towards the heavier use of digital technologies and may trigger lasting organizational changes to the way businesses operate more efficiently. In this way, COVID-19 could act as a catalyst for Vietnam to speed up the digital transformation it has already embarked upon. On this note, participants discussed the foundations that need to be in place to support the emergence of a robust and inclusive digital economy.
The Vietnam Reform and Development Forum is the biggest policy dialogue of the year between the Government of Vietnam and development partners. This year’s forum continued to be sponsored by the Australian Government through the ongoing Australia-World Bank Group Strategic Partnership - Phase 2 (ABP2).