Vietnam’s leaders need to urgently tackle corruption, which is putting economic growth at risk, an economic expert has warned.
Harvard Business School Professor Michael Porter said a strong press was a key plank in exposing and preventing corruption.
“Corruption could make any country’s progress come to a complete stop,” Porter told the Global Competitiveness and Competitive Advantages of Vietnam conference in Ho Chi Minh City on Monday.
The country has experienced impressive growth over the last two decades, Porter said. However, reforms so far have not been enough to lift Vietnam to the middle income economy bracket.
The reforms implemented over the next couple of years will determine whether the country will follow the experience of the Republic of Korea or the Philippines, he said.
South Korea had a nominal annual per capita income of US$20,015 in 2007. In the same year, the Philippines had a per capita income of $1,626 and Vietnam $829, according to International Monetary Fund estimates released last month.
Porter said every country’s competitiveness depended on its efficient use of human capital, cash and natural resources.
According to the Global Competitiveness Report 2008, Vietnam’s global competitiveness index score was -0.35, with the nation’s monthly minimum wage at about $50.
Vietnam fell two places to 70th in the 2008 Global Competitiveness Report, chaired by Porter and released in October by the World Economic Forum.
A series of experts have identified the key barriers to Vietnam’s economic growth as high inflation, poor infrastructure and a lack of skilled laborers.
Porter said the current global economic downturn meant Vietnam should set its key priorities as reducing corruption, improving infrastructure and improving the skills of its workforce.
He said the government also needed to urgently introduce the financial market reforms that were part of Vietnam’s World Trade Organization (WTO) commitments, as well as reform state-owned enterprises.
The more important thing was for all levels of government to commit to the same agenda, he said.
Too many levels of government in Vietnam was also holding back development, with each locality working on its own programs, Porter said on the sidelines of another seminar in Hanoi Tuesday.
Economists and policy-makers, including Deputy Prime Minister Hoang Trung Hai, also attended the Country Competitiveness Discussion in Hanoi.
Some attendees at the HCMC conference on Monday said the government had made a good start in tackling corruption.
“I do believe the government here is on the right track to fight corruption despite lots of work needing to be done in the time ahead,” Bo Eklund, Danish businessman and general director of private equity fund management company FMS Vietnam, told Thanh Nien Daily on the sideline of the seminar.
In the long term, Vietnam could focus on agricultural development to turn itself into one of the world’s largest suppliers of food and foodstuffs, Porter said. Alternatively, the country could invest in warehouses and seaports to become a leading global cargo transit center.
Do Xuan Quang, managing director of freight forwarding company Vector Aviation, said Porter’s proposal for Vietnam’s competitiveness plan should guide the nation’s policymakers.
“Porter’s competitiveness action agenda for Vietnam sounds great but the issue is how we will implement it,” said Pham Chi Lan, vice president of the Institute of Development Studies.
Pho 24 restaurant chain founder Ly Quy Trung also said Porter’s message seemed sensible.
“Our economy still expects shortcomings next year,” Trung said. “However, crisis always goes along with opportunity.”
The competitiveness seminar in HCMC was hosted by the Pace Institute of Directors and attracted more than 1,000 attendees from Vietnam and neighboring Asian countries.
Reported by Vinh Bao – Truong Son
Posted on December 6, 2008 by tinquehuong