Thanks to robust domestic demand and export-oriented manufacturing, Vietnam’s medium-term outlook remains favorable, with GDP expected to expand by 6% this year. Vietnam’s growth was accompanied by low inflation and widening current account surplus. Risks that could adversely affect medium term prospects include continuing delays in implementation of structural and fiscal reforms. Read more
According to WB experts, the official pension system is facing major challenges which will become increasingly serious when the aging process accelerates. Currently, the population aged 65 and older in Vietnam is 6.5 million, but the number is expected to increase by 3 times to 18.4 million by 2040. In 2014, Vietnam made reforms but they were not fast and powerful enough to restore financial balance of the retirement fund. Before the amendment, economists forecast that the fund would be in deficit in the early 2020s and the reserves will be exhausted by mid-2030. Read more
The World Bank’s most recent update on Vietnam’s economic developments concluded that (1) a high minimum wage, if enforced, will reduce formal employment; (2) outside the government sector, Vietnam’s minimum wages have risen rapidly in recent years, outstripping productivity growth, ; and, (3) , Vietnam’s private sector minimum wage is high relative to other countries. Read more
The National Wage Council (NWC) will meet again on Sep 3, after it was unable to reach agreement in two earlier meetings on Aug 3 and 25 . The NWC will submit a recommendation in September for the Minimum Wage 2016 adjustment to the Government for a decision, which will be implemented not less than 90 days later, on Jan 1, 2016. The Vietnam Textiles and Apparel Association has proposed a 6 or 7 % adjustment, VCCI proposed 10%, and the VGCL (Vietnam General Confederation of Labour) proposed 16.8%. Read more
HA NOI (VNS) — The Prime Minister will focus on improving the business environment and strengthening the economy’s ability to compete in 2015 and 2016.
Key areas of a Government resolution released yesterday include pushing for reforms to reduce time-consuming and wasteful administrative procedures, enhancing governmental offices’ transparency and accountability, and adopting regulations that are in accordance with international rules. Read more
It will help countries reform their trade facilitation practices in a manner consistent with the main components of the new WTO Trade Facilitation Agreement (TFA), signed in Bali, December 2013.
The Program will focus on the effective implementation of trade facilitation reforms in developing countries to enhance private sector competitiveness, thus leading to increased trade, investments and job creation. Read more
Prime Minister Dung said “Vietnam is a nation with social and political stability, fast and sustainable economic development and a friendly investment environment.” Council of Taiwan Chambers President Liu Mei The expected that Vietnam would attract more investors but this depended on what the Government will do to make investors safe, she said.
The May riots caused “serious disruptions,” especially to export-related industries which have driven the country’s growth, said Fred Burke, co-head of VBF Investment and Trade working group. While the measures announced are welcome, “they do not go far enough to account for the damages, much less restore the sector to its previous competitiveness.”
The Vietnam Business Forum offers an opportunity for a “structured dialogue” between Government officials and Vietnam and FDI business representatives, who provide extensive comments on the business environment in Vietnam and very specific recommendations to the Government regarding particular areas for improvement in laws and regulations.
While Vietnam’s macroeconomic performance further improved during 2013, economic growth continued to come in below its potential in the face of structural problems in state-owned enterprises and the banking sector, and due to policy distortions that continue to thwart domestic private investment and competition in key sectors. Gains in macroeconomic stability were underpinned by moderating inflation and strengthening external accounts. Growth is estimated at 5.4 percent in 2013—a slight improvement from 5.3 percent in 2012. The government is facing growing fiscal challenges due to sluggish revenue collection. Growth is likely to remain moderate in 2014 in the absence of visible progress in addressing the mentioned structural problems. Read more
More efficient transport and logistics can play a significant role in increasing productivity. By making supply chains more predictable, better transport and logistics allow manufacturers, transportation carriers, logistics service providers, and trade regulators to minimize avoidable delays, thereby increasing output per unit of time while reducing the cost of doing business. Such competitiveness enhancements can better position Vietnam to benefit from global demand, to better serve domestic markets, to attract investment, and to generate quality jobs.
Jan 10, 2014 – InterContinental Asiana, Ho Chi Minh City
Jan 7, 2014 – Melia Hotel, Hanoi Read more
Sandeep Mahajan has been the World Bank’s Lead Economist for Vietnam since September 2013. In that capacity, he heads the Bank’s policy dialogue on a broad range of economic management issues with the relevant government agencies.
A development practitioner with close to 15 years of experience at the World Bank, he has led complex policy-oriented loans to developing countries and provided extensive advice to governments on issues related to pro-poor growth, macro stability, trade policy, and labor markets.
His research interests and publications cover the fields of macroeconomics, economic growth, volatility and inequality, and financial sector development. Born in New Delhi, India, Mr. Mahajan received his B. Com (Hons) from Delhi University and his PhD. in economics from Georgetown University.
Recently he published an update of Vietnam’s economy, “The Taking Stock,” a bi-annual assessment of Vietnam’s economy that identified several critical risks to macro-economic stability, including: (i) low foreign exchange reserves; (ii) fragile private sector demand, (iii) possibility of departure from fiscal and monetary discipline; (iv) slow progress on structural reforms; and (v) loss of confidence in a fragile banking sector.