According to Prime Minister Pham Minh Chinh, to overcome the middle-income trap like Japan, South Korea, and China have done, Vietnam needs to maintain high and sustainable growth rates continuously from now until 2045, while not sacrificing progress, social equity, and the environment in pursuit of mere economic growth.

Growth targets are decisive factors for national standing

On the morning of February 21, Prime Minister Pham Minh Chinh chaired the first conference between the Government and local authorities following the 9th extraordinary session of the National Assembly on consolidating the Government apparatus. This important event took place after the National Assembly approved this year's economic growth target of over 8%, with the expected GDP scale exceeding $500 billion.

Speaking at the conference, Prime Minister Pham Minh Chinh emphasized: "There is no other way, we must maintain high, sustainable growth continuously from now until 2045." The head of Government affirmed that achieving growth targets is a crucial factor determining the size of the economy, per capita income, and Vietnam's economic ranking on the international stage.

The Prime Minister reiterated a clear directive: "The Party has directed, the Government has agreed, the National Assembly has consented, the people have supported, and the Motherland is expecting, so we only discuss how to move forward, not backward." This message demonstrates a high level of determination in promoting economic growth, not accepting stagnation or regression in the country's development process.

Lessons from economies that have overcome the middle-income trap

According to the Prime Minister's analysis, the middle-income trap occurs when a country gets stuck in the per capita income threshold of $4,000 to $6,000 per year. This income level is achieved thanks to natural resources and initial advantages along with an undynamic labor market.

International experience and the latest statistics from the World Bank (WB) show that from 1990 to the present, only 34 economies have escaped the middle-income trap to become high-income countries, while 108 countries have not yet overcome it. The Prime Minister particularly emphasized that "if we only grow at an average of 7% per year, it will be difficult to achieve the aforementioned goal."

Successful growth models

The Prime Minister cited many exemplary cases of economies that have escaped the middle-income trap by maintaining high growth rates over extended periods:

• Japan achieved an impressive growth rate of 11.5% per year during the period 1951-1973
• South Korea maintained growth rates above 9.6% annually from 1963 to 1996
• China achieved a growth rate of about 10% each year during the period 1978-2011
• Taiwan (China) grew by 8.9% during the period 1952-1989
• Singapore maintained a growth rate of 8.5% per year during the period 1961-1997

These examples show that to escape the middle-income trap, economies must maintain growth rates of around 10% for about 30 consecutive years.

Vietnam's starting point

The size of Vietnam's economy by the end of 2024 reached over $470 billion, with per capita income exceeding $4,700. According to calculations, in nearly 40 years of Doi Moi (Renovation) (from 1986 to present), Vietnam has achieved an average growth rate of 6.4%. This figure shows that Vietnam needs to accelerate further in the coming period to achieve the strategic goals set for 2045.

The Prime Minister emphasized that this is an important task requiring the decisive and synchronous participation of the entire system. These examples also help to clearly identify that Vietnam's path ahead still contains many difficulties and challenges.

Prime Minister Pham Minh Chinh speaking at the "Government Conference with Local Authorities on Economic Growth"

Comprehensive solutions to achieve high growth targets

To achieve the goal of high and sustainable growth until 2045, the Prime Minister requires all ministries, localities, domestic and foreign enterprises, collective economy, and private economy to achieve growth above 8%. This is a specific requirement to ensure synchronization throughout the economy.

Balance between growth and stability

Along with the goal of high growth, the Prime Minister emphasized the importance of maintaining macroeconomic stability, controlling inflation, and ensuring social welfare. This reflects the Government's consistent view of not sacrificing progress and social equity, not trading the environment for mere economic growth.

The Government leadership also pointed out that Vietnam must improve investment efficiency and capital disbursement rates for public investment. Accordingly, ministries and localities must mobilize sufficient resources in terms of institutions, capital, technology, and human resources to exploit drivers and leverage for sustainable growth.

Administrative reform and obstacle removal

Adding to the solutions, Deputy Minister of Planning and Investment Tran Quoc Phuong emphasized that Vietnam needs to focus on promoting administrative reform, quickly resolving investment procedures, and removing difficulties for businesses and key projects. Regulators need to develop piloting mechanisms, specific policies, new regulations, breakthroughs, and "green lanes" for projects in high-tech fields.

Mr. Phuong proposed that ministries and localities focus on reviewing and improving regulations that are no longer appropriate, overlapping, or incomplete. At the same time, all levels and sectors need to continue identifying public investment disbursement as a top political task, playing a key role in promoting economic growth.

Stimulating consumption and market expansion

Another important solution mentioned is developing mechanisms and policies on taxation and credit to support increased purchasing power, stimulate consumption, and develop domestic tourism. This aims to achieve the goal of increasing total retail sales of goods and consumer service revenue in 2025 by about 12% or more, attracting 22-23 million international tourists and 120-130 million domestic tourists.

In addition, Vietnam needs to effectively exploit opportunities from 17 signed Free Trade Agreements (FTAs), diversify export markets, and create all favorable conditions for experts, especially talented foreign experts and Vietnamese people abroad, to work and develop science and innovation for Vietnam.

Conclusion

Vietnam is facing a historic opportunity to overcome the middle-income trap and become a high-income country, but this comes with significant challenges. With the growth target of over 8% per year, Vietnam needs to mobilize all resources, innovate thinking, methods, and take decisive action at all levels, sectors, and localities.

Prime Minister Pham Minh Chinh's message is clear: there is no other path besides maintaining high, sustainable growth continuously from now until 2045. Only in this way can Vietnam successfully achieve its goal of becoming a developed, high-income country, fulfilling national aspirations in the new era.

Cre: VnExpress

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