Vietnam is importing huge inflation and if it doesn’t “pump money”, inflation will still increase. According to Assoc. Prof. Dr. Tran Dinh Thien, in the context of inflation, enterprises are “anemic”, lacking in strength, the risk is higher.

Thinking about how Vietnam can turn the situation around in the current context, Assoc. Prof. Dr. Tran Dinh Thien, former Director of the Vietnam Institute of Economics pointed out a few key points.

Vietnam is an open economy, especially open and we are not really strong yet, but we live in a fast-changing world and enter the high-tech stage. In the last 2-3 years, the world is very risky and full of uncertainty.

These two characteristics show that the world is in dire need of restructuring, thereby opening up a lot of opportunities for Vietnam.

“Of course, the opportunity with an open economy, an economy that is not really strong, is also a challenge” Dr. Thien said.

Opening his speech at the 4th Vietnam Economic Forum, Dr. Tran Dinh Thien stated the issue that all activities of the economy in particular and the world in general are following the trend of globalization, especially risks are also risks of globalization: natural disasters, epidemics, crises economic, conflict… are all at the level of globalization. These risks occur sporadically but integrate with each other, so the impact is terrible.

To develop in such a world, Vietnam with its aspiration has new capabilities, new ways, new efforts to develop, in which the two most important groups of capacities are institutional capacity and innovation capacity. These two points are the human capacity to manipulate, create, take advantage of all available conditions to rise.

In the past two years, the world economy has struggled. Especially in 2022, economic conflicts are associated with violent conflicts at a high level. It’s not just a broken link chain, but currency issues are emerging very strongly, along with problems related to high technology. Economic conflicts in 2022 are partly the cause but also the result of the previous period.

The break in the supply chain is also a point to pay attention to, when China still applies Zero Covid-19, the whole world will be affected. The resonance of the Russian-Ukrainian conflict has made the supply chain of petroleum, input materials, etc., more terrible, and Vietnam is the country that is strongly affected.

If Vietnam can narrow the impact of these negative factors, this is perhaps the best affirmation of Vietnam’s independence and self-reliance.

Recent forecasts have shown that the world economic situation in 2022 will be worse, not better. The forecast of GDP growth is revised down once every few months, the trend of stagnation in inflation is presenting a great risk, two crises in energy and food are gradually forming, threatening the economy and people, etc. are huge challenges that Dr. Thien pointed out.

SHOULD  SET HIGHER INFLATION TARGETS TO “PUMP MONEY” INTO THE ECONOMY

In a situation that is not very “bright”, many risks, many challenges and a really unpredictable situation, Vietnam has something to develop, Dr. Thien poses a problem.

However, the former director of the Vietnam Institute of Economics also pointed out that the past two years have brought a lot of lessons.

Lesson one, the risks of the world require interconnectedness and interdependence to coexist.

The second lesson is the lesson of the rules of the game. Globalization pushes people closer together, so it is not possible to “just be alone” or isolate yourself by conflicting with the surrounding world.

The third lesson is the latter advantage. The Covid-19 epidemic forced us from the physical economy to the digital economy. Therefore, digital transformation is the most effective solution for us to deal with old-style risks and enter a new era. Without digital transformation and application of high technology, it is impossible to cope with the risks from the epidemic. Vietnam is behind, so innovation needs to be promoted.

The fourth lesson is to move the supply chain, this is an opportunity for Vietnam. The China +1 formula has never been clear to Vietnam, to ASEAN as it is now, if Vietnam had prepared better in recent years, it would certainly be different now.

Vietnam has gone through storms and relegation are great achievements.

Vietnam’s economy is on a very good foundation and Vietnam is a country with very strong aspirations. Assoc.Prof.Assoc.Prof.Dr Tran Dinh Thien

The Prime Minister’s management in the recent “dangerous” context shows his bravery, capacity, flexibility in policy, and decisiveness in action.

Fight the epidemic but not break the chain of the market economy. The chain of goods, currency, labor, if there is a problem, the economy will suffer. The lesson of fighting the epidemic but not breaking the chain is a great lesson.

Warning the “potential” vitality of the administrative command mechanism and the ask-for-give mechanism. Without a vigilant and resolute attitude, the market economy will hardly have the opportunity to rise.

The post-epidemic program is not only economic recovery but also recovery and development, taking advantage of opportunities for Vietnam to rise up, etc. These are important notes that Dr. Thien sent to the Government.

“Thus, the world is still abnormal and unstable, but Vietnam is on a good foundation, has momentum, and is able to develop. This gives us a chance to break through.” said Dr. Thien.

“All the stories of public investment congestion or fear of injecting capital into businesses for fear of inflation are wasted opportunities,” said Dr. Thien acknowledged.

In unusual circumstances, thinking and acting must also be unusual. Not just disassembling, editing and having to change the mechanism.

With the fear of inflation, Vietnam is importing huge inflation and if not pumping money out, inflation will still increase. Cost-push curbing, but “pumping blood” for the economy is a must. In the context of inflation, businesses lack blood, lack of strength, the risk is even higher.

Dr. Thien suggested the Government should be bold and proactive in setting higher inflation targets to pump money out into the economy and speed up production.

For many years, public investment disbursement has been slow, not just because of Covid-19 but private capital is very flexible. While public capital is slowing down and private capital is booming, it is necessary to keep resources without breaking the law.

“If private capital is restrained, it will slow down and lose opportunities for the economy,” said Dr. Thien frankly pointed out.

Assoc.Prof.Dr. Tran Dinh Thien speaks at the 4th Economic Forum

AIRLINES, TOURISM AND ENERGY HAVE HUGE OPPORTUNITIES

Among the fields, Dr. Thien said that aviation, tourism and energy are industries that will create “rebound” for Vietnam in the current context.

Vietnam’s aviation is having a very strong opportunity to rise up and can completely rise to create a position in the world. It is necessary to have an approach to Vietnam’s aviation as a national power with a global position.

Tourism needs to be more open with regulations on visas, passports, etc., as well as ways to attract tourism of 63 provinces/cities, which need to be studied more carefully to link regions and regions.

This world energy crisis is also an opportunity for Vietnam to make a name for itself and establish an important position in the energy map. When the world has an old-style energy crisis (crude oil), Vietnam can completely jump up with green energy (hydro green), Dr. Thien affirmed.

Vietnam is facing a very challenging time, but the difficulties in the past 2 years have been overcome.

“Vietnam’s position is an independent position, gaining momentum, so there is no reason that until now we have a good momentum, a good position, we can’t take advantage of our opportunities.” Dr. Tran Dinh Thien concluded his speech.

According to Ha An

Source: https://cafef.vn/pgs-tran-dinh-thien-kiem-che-chi-phi-day-nhung-viec-bom-mau-cho-nen-king-te-la-viec-phai- lam-20220607100838138.chn