Protocol
- Excellency Deputy Prime Minister Pham Gia Khiem
- Mr. Vo Hong Phuc, Minister of Planning and Investment
- Governor Nguyen Van Giau
- Mr. Le Duc Thuy – Chairman of the Financial Supervisory Committee
- Members of the National Assembly
- Vice Ministers
- Your Excellency Ambassadors
- Colleagues Heads of Development Agencies
- Ladies and Gentlemen
- Excellency Deputy Prime Minister Pham Gia Khiem
- Mr. Vo Hong Phuc, Minister of Planning and Investment
- Governor Nguyen Van Giau
- Mr. Le Duc Thuy – Chairman of the Financial Supervisory Committee
- Members of the National Assembly
- Vice Ministers
- Your Excellency Ambassadors
- Colleagues Heads of Development Agencies
- Ladies and Gentlemen
A very good morning to you all.
Welcomes
- I join Minister Phuc in welcoming all of you to the 2010 Annual CG.
- Excellency Deputy PM I want to especially welcome and thank you for spending this morning with us. We hope that you will find this time with us worth your while.
- I also want to extend a special welcome Ambassadors and Heads of Agencies who are attending the annual CG for the first time.
Thanks
- Minister Phuc, I want to thank you and your team at MPI and other agencies in Government for your hard work in preparing this CG, including preparing several documents that will form the basis of our discussions.
- I want to thank Ambassadors and development partners who have also contributed in different ways to the preparations.
- Last but not least I want to thank my colleagues at the World Bank who have worked tirelessly over the last few months to put all the detailed arrangements in place. Thank you for your great team work and for working overtime to ensure every little detail is in place.
Remarks
- Since our meeting last December, Vietnam has successfully completed its chairmanship of ASEAN, raising the country’s profile both in the region and more globally. Vietnam’s 2009 income indicators—finalized this year-- confirmed that the country has joined the ranks of lower middle income countries. These are both remarkable achievements indeed.
- Within twenty-five years, Vietnam has moved from being one of the poorest countries in the world to an active player on the regional and global stage, generated growing prosperity for a majority of Vietnamese, and is beginning a new and higher phase of economic development.
- Deputy PM we want to congratulate you, the Government and people of Vietnam for these remarkable achievements.
- Yet, the country’s aspirations remain ambitious, with the goal of fostering a higher income industrial economy and reducing poverty rates to the single digit level within the next decade.
- The achievement of these recent milestones is therefore a good opportunity for reflection on where Vietnam is relative to this final objective, and what it will take to get there.
- And Vietnam is already engaged in some of this reflection through the preparation of the 10 year National Development Strategy 2011-2020 and the 5 year SEDP 2011-2015. Both documents spell out important breakthrough areas that the country must pursue in order to avoid the MIC trap and continue progress towards an advanced economy.
- In addition, this week the first Vietnam Competitiveness Report which the Government commissioned in late 2008 was launched here in Hanoi. It provides a frank assessment of where Vietnam stands in its economic development and the opportunities and challenges that remain.
- A common theme across the three documents (The NDS, SEDP and the VCR) is that Vietnam needs to substantially raise the productivity of its people and investments.
- The VCR goes the farthest in emphasizing that “business as usual” will not yield Vietnam’s high aspirations and articulating the nature of the changes needed for Vietnam to succeed in this new development phase.
- The VCR’s analysis suggests that Vietnam’s success since reforms in the 1980s has been based on leveraging the country’s existing economic fundamentals and its (low cost) labor and (ample) natural resource endowments.
- Yet, there are limited opportunities to further leverage these assets. To sustain rapid growth and to foster dynamism over the longer term, fundamental changes will be needed in Vietnam’s development approaches in at least the following dimensions:
- Building new sources of competitive advantages, based upon productivity growth, innovation, and product and service differentiation, and more efficient use of investment and trade. While their trajectories have varied, all high income countries have succeeded in making the transition beyond dependence upon basic endowments.
- Redefining the role of Government in line with the demands of an emerging and dynamic market economy. A role that allows the market to function. Related to this, providing an environment that creates a more balanced mix of state-owned and private (both domestic and foreign) companies competing in the economy.
- Choosing a growth path that is more environmentally sustainable and recognizes the challenges posed by Climate Change. This year’s Vietnam Development report prepared by the World Bank and several other development partners provides suggestions for change in this area.
- Defining and implementing a more robust approach to poverty reduction and broader social inclusion that takes into account the changing dynamics of poverty—increased vulnerability of poverty gains to external shocks; widening income disparity; and persistence of poverty in rural and remote ethnic communities—as well as issues around gender disparity.
- Building new sources of competitive advantages, based upon productivity growth, innovation, and product and service differentiation, and more efficient use of investment and trade. While their trajectories have varied, all high income countries have succeeded in making the transition beyond dependence upon basic endowments.
- A stable macroeconomic environment is needed to provide an overreaching framework for these changes. Modernizing instruments and institutions for macroeconomic management in line with Vietnam’s move towards market are critical in this regard.
- These transitions are important to consolidate past gains, restore the dynamism of Vietnam’s development and put the country on a firm track to achieve its well recognized potential. In the next day and a half, we will have a chance to discuss several elements of these new approaches.
- In all of these areas, I would like to highlight that change at the margin is probably not sufficient. It will require a clear decision and political commitment to realize the actions to chart a new development course.
- Finally we will also have a chance to begin to consider how the relationship between Vietnam and development partners could evolve as Vietnam makes further development progress. We know that volumes of grant and other soft forms of development financing available to Vietnam will decline while at the same time access to more expensive financing will increase.
- The challenge is to ensure that this happens in an orderly manner that does not put debt sustainability at risk or disrupt development progress, particularly in areas where Vietnam still has a long way to go in achieving MDG targets (rural water and sanitation, HIV/AIDS for example) and allows enhancement of the quality and durability of those MDGs that have already been achieved (e.g. in basic education, poverty reduction). In addition Vietnam’s aspirations imply achieving much more than the basic MDGs-moving to MDGs-plus targets.
- The evolution in the relationship should also hopefully lead to a stronger partnership—one based more on mutual respect and accountability---with Vietnam playing a stronger role in shaping the relationship to meet its national priorities.
- As development partners we appreciate the opportunity to discuss with your Government key development issues. On behalf of all of us, I would like to reassure you that we approach this with a strong sense of responsibility and sincerity and hope that it does add value for you and the Government particularly as you finalize the 10 year strategy and the five year plan and begin to work on more detailed Action Plans for their implementation.
- Coming so close to the 11th Party Congress we hope that some of our discussions may perhaps provide useful reflection for your meeting.
- I hope we can discuss openly, honestly and constructively, drawing on the trust and the goodwill that underpins our partnership.
- As I have said in remarks at previous CGs, I hope we can all keep our interventions focused and succinct and allow the opportunity for real dialogue by giving each other a chance to be heard and by actively listening to others.
- I look forward to very fruitful discussions.
