Vietnam resets modernization push with new economic restructuring targets

The resolution, signed and promulgated by Party General Secretary Nguyen Phu Trong during the 6th Plenum of the 13th Central Committee, seeks fresh impetus for the industrialization and modernization process.

It notes that Vietnam did not reach its goal of becoming an industrialized country by 2020. Economic growth also did not meet set targets, with the rate tending to decrease gradually on a 10-year cycle. The country was in danger of falling behind and into the middle-income trap; the internal strength of the economy was weak; and labor productivity low and slow to improve.

A reason for this situation is the lack of a clear plan for developing foundational and spearheading industries. In this context, the Party Central Committee wants Vietnam to move quickly away from processing and assembly towards research, design and production.

Vietnam also needs to develop a number of service industries that exploits its advantages and deploys high technology in promoting the knowledge economy. While recognizing manufacturing and processing as key sectors, the resolution calls for a breakthrough in digital transformation to speed up industrialization.

By 2030, Vietnam should meet the criteria of an industrialized, developing country with modern industries and a high number of middle-income households.

The nation must also improve its production capacity, autonomy and adaptability. Step by step, the nation should master core and foundation technologies for various industries, especially spearhead industries.

Agriculture must develop rapidly and sustainably in an eco-friendly direction, applying scientific and technological advances.

The nation aims to be in the group of three leading ASEAN countries in terms of industrial competitiveness with an industrial proportion of more than 40% of the GDP.

The resolution stresses the need for Vietnam to form a number of large-scale, multinational domestic industrial enterprises and internationally competitive enterprises in foundational, priority and spearhead industries. It says the country should also “master a number of industrial and agricultural value chains.”

Self-reliance, dual-use and modernity will be the building blocks of the defense and security industries.

It envisages Vietnam’s digital economy proportion reaching 30% of the GDP in the coming years.

It calls for the country to be in the group of 40 leading countries in e-government and digital economy.

Vietnam should become a developed, high-income country by 2045 and be among Asia’s leading industrialized nations, the resolution says.

To reach these goals, Vietnam needs to use science, technology and innovation in a solid way to make breakthroughs in productivity and quality.

Priority should be given to developing a specialized legal system for national industrial development, particularly specific fields like digital technology, defense, security, and energy.

The resolution says preferential tax, finance, credit and land policies should encourage investment in research and development as well as in the development of high-quality human resources.

Land, credit, financial, scientific, technological and human resource policies must continue to be updated to attract private and foreign investment in agriculture and rural areas, further promoting the national industrialization process.

Vietnam should also have an Infrastructure Development Fund, the resolution says.

It also calls for the implementation of a national program – “Make in Vietnam 2045” – one that promotes Vietnamese creation of high-tech products. The program’s name uses a play of word to emphasize activeness, according to the information ministry that initiated the program.

The resolution identifies metallurgy, mechanical engineering, chemicals, energy, materials and digital technology as some of best foundation industries. Spearhead industries can include robots, cars, and automated equipment.

Businesses in the Vietnam should collaborate with foreign counterparts to make clean, renewable energy equipment and battery storage systems, the resolution says. It envisages the defense and security industry as a national industrial spearhead.