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General Secretary To Lam has stated, ‘Our country is entering a new phase of empowerment, beginning with the Party’s 14th National Congress. This marks a moment where all Vietnamese citizens, united under the Party’s guidance, will harness opportunities, address challenges, and drive our nation toward significant growth and transformation.’

Inspired by General Secretary To Lam’s vision, today we explore how Vietnam can succeed in this new phase.

We are pleased to welcome Ms. Pham Chi Lan, former Secretary General and Vice President of the Vietnam Chamber of Commerce and Industry. A member of the Prime Minister’s advisory group and the Business Law Implementation Task Force, her vast experience in policy advisory, especially in economic matters, has heavily influenced the sector.

We are also joined by Mr. Nguyen Van Phuc, former Deputy Chairman of the National Assembly’s Economic Committee, who has nearly four decades of experience in the National Assembly, contributing to the drafting of three Constitutions in 1980, 1992, and 2013.

Moreover, we honor Mr. Truong Thanh Duc, Director of ANVI Law Firm, a member of the Business Law Implementation Task Force and the Vietnam International Arbitration Center, whose insights into economic policy and legislative reform have been invaluable.

Together, these esteemed guests have played pivotal roles in shaping our nation’s legal and institutional framework in recent years.

This period draws parallels to the onset of our Doi Moi (Renovation) era, a time fraught with difficulties that demanded immediate solutions. Back then, our leaders embraced the philosophy of ‘Reform or perish.’

The quest for renewal commenced with a fundamental shift in our institutional mindset, laying the groundwork for Vietnam’s subsequent progression.

Today’s challenges, while different from those we faced in 1986, are equally pronounced and necessitate renewed thinking. We must adapt our perspectives to address modern issues, including global integration and swift technological advancements that impact our daily lives.

To make progress, we must foster a transformation in our mindset and institutions. This, I believe, is our starting point.

Thank you, Ms. Pham Chi Lan. Mr. Nguyen Van Phuc, can you share your views on the necessity for institutional reform in light of General Secretary To Lam’s emphasis on this issue?

The Party and State, as emphasized by General Secretary To Lam, recognize institutional reform as a critical need, defining institutions as the ‘bottleneck of growth.’ All our achievements and setbacks arise from institutional aspects.

The discourse around institutional reform is now prominent, extending from the upper echelons of Party and State leadership to various sectors and the public.

It is expected that relevant authorities will soon engage with businesses and the general populace to delve into this matter. However, when I asked leading economic and legal experts about their definitions of institutions, I received various interpretations.

Globally, there remains a lack of consensus on the concept of institutions. If we label institutions as the ‘primary bottleneck’ necessitating immediate reform, it is crucial we first agree upon a foundational definition of ‘institutions.’

Different interpretations may lead us down divergent paths in reform efforts, which could be counterproductive.

I am heartened to see a renewed focus on institutional reform as highlighted by our top leaders, indicating that we will soon pursue decisive solutions to enhance our institutions, which is essential for supporting further reforms and development across various sectors.”

Mr. Truong Thanh Duc, your experiences with businesses and legal frameworks offer important perspectives. What are your thoughts on the points raised by Ms. Pham Chi Lan and Mr. Nguyen Van Phuc?

Indeed, we find ourselves at a significant historical juncture, much like the one Ms. Pham Chi Lan has indicated. Today, decades after our initial Renovation, it feels as if we are initiating a new, more ambitious Renewal.

Firstly, while we made remarkable strides during the Renewal period, we are beginning to lag. Thankfully, we still possess numerous unique opportunities on the global stage.

These opportunities can be encapsulated in three areas: Business, Consumption, and Integration — advantages that few other countries can claim simultaneously.

First, our entrepreneurs and citizens exhibit a remarkable willingness to take risks, ready to invest and engage boldly in business, which is vital.

Second, our businesses and individuals are fully integrated into the global economy through numerous agreements and treaties, translating into significant actions and results.

We are equipped to participate actively in international supply and consumption chains, utilizing technology, artificial intelligence, and the benefits from our earlier Renovation. Other nations have pushed for development and innovation without such favorable conditions.

Third, there is a dynamic consumer culture in Vietnam. Our people show a strong propensity to spend, creating a thriving market of 100 million consumers filled with opportunities.

These factors collectively encourage robust production and business growth. Ultimately, whether in production or consumption, success hinges on our institutional framework.

Institutions are crucial; they dictate our capacity to advance or regress, and how far we can go. Reflecting on the past 30 years, without embracing a market economy and global integration, we would have remained impoverished and stagnant.

If we continue at the slow pace of previous times, we will see growth, but it’ll be pedestrian. Not striving for better outcomes equates to failing our nation and history, especially amidst current development opportunities.

Thus, I believe we have unprecedented potential for rapid development. Failing to seize this once-in-a-millennium opportunity would hinder our progress in standing tall alongside global powers in this new era.

Ms. Pham Chi Lan, as the private sector is eager to drive the nation forward, what distinctive advantages does Vietnam possess as we embark on this new era?

Throughout my career, even after my retirement over 20 years ago, I have remained engaged with the Vietnamese business sector and the country’s overall economic landscape.

What fills me with great enthusiasm is the unwavering spirit of the Vietnamese people…
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Vietnam’s Resilient Entrepreneurial Spirit

One of the most admirable qualities of the Vietnamese people is their entrepreneurial spirit, which exemplifies their determination and resilience in today’s world.

Reflecting on history, the subsidy era prior to the Đổi mới (Renewal) policy illustrated how economic constraints dampened entrepreneurship, resulting in widespread economic distress.

However, following Đổi mới, Vietnam transitioned from a state-controlled economy to a market-driven one. This transformation empowered citizens by granting them business rights and incentivizing resource development, leading to astonishing progress.

In 1986, Vietnam was compelled to import between 500,000 to 1 million tons of food annually. Yet, by 1988, only a year after Đổi mới began, the country succeeded in exporting its first million tons of rice.

This rapid transition from severe food scarcity to achieving agricultural surplus highlighted Vietnam’s newfound potential, ultimately positioning the nation as the third-largest rice exporter globally. The speed of this evolution baffled international experts.

This shift was made possible by unlocking people’s potential, especially farmers, who united to rejuvenate Vietnam’s agricultural sector almost instantaneously.

Another significant change was in how resources were allocated and consumed domestically. By permitting the market to manage distribution instead of a state-run system, the government abolished the practices of hoarding and rationing rice, significantly boosting supply and facilitating better quality rice for consumers.

The resourcefulness of ordinary farmers played a vital role in these achievements.

Additionally, an essential aim of Đổi mới was to enhance consumer goods availability. Vietnamese businesses sprang up, swiftly addressing shortages of necessary items like clothing and footwear by connecting trade between the North and South.

Entrepreneurs were quick to meet market demands even before imports increased, leading to the establishment of a burgeoning export sector focusing on garments, footwear, and embroidery.

The entrepreneurial drive among Vietnamese people is exceptionally impressive; when given the freedom to act, they make remarkable progress, even in the face of limited resources.

Today, this entrepreneurial spirit has thrived and evolved, standing as a formidable strength nearly four decades post Đổi mới.

I believe that this spirit represents one of Vietnam’s greatest assets. Every country regards its people as its primary asset, and Vietnam is no exception. Particularly in our current economic milieu, the remarkable attributes of the Vietnamese—their entrepreneurial mindset, independence, eagerness for knowledge, desire to contribute, adaptability, and readiness for innovation—are becoming increasingly evident.

This distinct quality among our people significantly contributes to Vietnam’s strength, both now and in the future.

Assessing Risks and Untapped Potential in Vietnam

Mr. Nguyen Van Phuc, being lagging behind is a significant risk for the nation. In your perspective, has enough focus been given to this issue, and what potential remains unrealized in Vietnam?

Indeed, the resolutions from the Party Congress and documents from the Central Committee stress the danger of falling behind. Alongside initiatives for breakthroughs in various sectors, strategies to avert and address this risk have been put into place by the Party and State.

However, there is still a lack of a specialized program tackling stagnation—unlike the dedicated committees for issues such as anti-corruption and waste.

Stagnation is a pressing issue affecting all sectors, intertwined with our development strategies. It is recognized as a serious threat.

We need a thorough analysis of how we are falling short, both in relative terms and in comparison with the global stage. The Đổi mới movement has been lauded and admired internationally for its impact. For instance, Vietnam transformed from confronting local food shortages to becoming the world’s third-largest rice exporter, significantly influencing global food security.

As I interact with technology companies and observe emerging development trends, it’s clear that our youth are intent on not falling behind. For instance, VinFast has entered the global electric vehicle arena, and our IT firms are exporting tech products worldwide, showcasing areas in which we are keeping pace or even taking the lead.

Nonetheless, we still lag in several areas, particularly in services and products where we rank lower globally. For instance, the government plans to present a high-speed rail project proposal to the National Assembly that promises to achieve speeds of 350 km/h with significant investment. In contrast, our railway infrastructure remains largely unchanged since the French era, with reliance on outdated diesel engines, whereas the rest of the world has transitioned to electrification. This exemplifies how we are trailing behind.

In summary, while Vietnam has seen substantial development in the 40 years since Đổi mới, ranking 40th globally in economic size and 20th in export investment, there remains a noticeable gap in our pace and the quality of development compared to the global landscape.

We have advanced quickly, but given that the world started from a much higher point, we are still in a catch-up phase.

I resonate with former General Secretary Nguyễn Phú Trọng’s statement: “Our country has never before enjoyed the status, potential, position, and international respect that it has today.”

This perspective allows us to reflect on the fact that our GDP has multiplied nearly 100 times since 1986.

While Vietnam possesses the opportunities and potential to mitigate the risk of falling behind, it is important to acknowledge that we have missed out on significant opportunities.

For instance, we signed the Vietnam-U.S. Bilateral Trade Agreement and joined the WTO, spurring a wave of foreign investment, along with more recent trade agreements such as the CPTPP and EVFTA. However, have we fully exploited these opportunities? Regrettably, many chances have been overlooked, representing a missed opportunity.

Having been part of the negotiation teams for the Vietnam-U.S. Trade Agreement and WTO, I observed that we let many foreign investment opportunities slip away—opportunities that could have substantially strengthened domestic enterprises and fostered the growth of supporting industries.

Strategies for Vietnam to Keep Pace Globally

Mr. Truong Thanh Duc, considering international contexts, how can Vietnam strive to stay on par with the rest of the world?

As Mr. Nguyen Van Phuc pointed out, we have neglected numerous opportunities. We’ve focused on peripheral issues while overlooking the most crucial aspect—recognizing who we are and our global standing. Without this foundational understanding, success is unattainable.

Though we launched Đổi mới around 40 years ago, true acceleration didn’t commence until approximately 30 years ago. The results have been remarkable, surpassing our expectations akin to a dream—and indeed, beyond that. The generations of Mr. Phuc and Ms. Chi Lan, alongside our present generation, have experienced two distinct phases, while those under 40 have not yet fully grasped…

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Embracing Change for Future Growth

Welcoming the market economy and global interconnectedness is vital; however, merely looking back at our past offers little direction and may lead to complacency, stagnation, and eventual obsolescence. This is no longer a mere threat; we are already lagging.

As highlighted by Mr. Phuc, we have made progress in many fields, even matching or exceeding global standards in some areas. Yet, in a broader sense, we still haven’t reached a critical threshold of development.

We have taken the right steps, capitalizing on favorable conditions and opportunities. However, if our pace remains unchanged, we will move like a caravan on foot—occasionally quickening but ultimately trailing behind other nations.

As such, our imperative is to accelerate our efforts. There are sectors where we need to take the lead, which entails adopting innovative strategies and solutions just to catch up with others who have set high standards and are advancing remarkably.

During my travels to France and the UK, it appeared that they had reached a level of saturation where little further development was evident. Buildings looked the same as they did decades ago, and infrastructure showed little change. So, can we truly call that progress?

This illustrates what I term the ‘wealth trap,’ a phenomenon even nations like South Korea face. To avert this, South Korea has vigorously pursued innovation and embraced new technologies, always striving forward. They are aware that reaching a certain level can breed complacency, leading to a belief that enough has been achieved, thus causing a nation to lag behind others.

I wholeheartedly agree. Being a developing nation has its advantages—poverty can become a gateway to opportunity. The challenges we encounter provide hope; we must innovate, transform, and compete. Where old buildings stand for centuries, as they do in developed regions, the opportunity for new technology and advancement becomes limited.

Stepping into this new era requires understanding our identity. We must refrain from resting on laurels, excessively celebrating our progress, or glorifying our historical figures. While acknowledging our past successes is vital, it should be done judiciously. Our achievements should be recognized without boasting, and our deficiencies should be brought to light to truly enable progress.

We have faced significant adversity and misery under rigid, outdated bureaucratic systems that curtailed growth while imposing numerous restrictions on businesses and individuals.

Transformation came through institutional reforms and a commitment to openness. As noted by Ms. Pham Chi Lan, these reforms enabled Vietnam to pivot from food scarcity to becoming a leading global rice exporter, earning international respect.

Yet today, our economy confronts constraints and limitations. Without the momentum fostered by General Secretary To Lam, we risk greater setbacks as the global landscape continues to evolve around us while we remain stagnant.

Daily interactions with businesses and citizens reveal that although there have been achievements, they often come at the cost of frustration and significant challenges.

Thus, the defining factor in whether we can accelerate or remain stagnant lies in our institutions. To keep up with other countries, we must not only develop supportive institutions but also implement bold, transformative reforms specific to Vietnam.

While we have made remarkable progress over the years, sustaining that success demands a change in mindset and the removal of legal and regulatory barriers—broadly classified as institutional hurdles.

General Secretary To Lam’s assertion that institutions are the ‘bottleneck of bottlenecks’ rings true. This is an obstacle that the Party and the State, along with the National Assembly and the Government, must address. Citizens cannot tackle this alone. Although individuals and businesses can innovate and compete, it is the role of the State to establish enabling conditions through comprehensive institutional reforms.