ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter

Vietnam congress to map out path to high-income status by 2045

PM Phuc says party must address shortcomings for nation to realize aspirations

Nearly 1,600 delegates gather in the National Convention Center in Hanoi for the opening ceremony of the Communist Party of Vietnam's twice-a-decade National Congress on Jan. 26.   © Reuters

HANOI -- The Communist Party of Vietnam on Tuesday officially kicked off its twice-a-decade National Congress by highlighting a big agenda item -- goals it intends to set that will point the lower-middle-income country toward reaching its ambition of gaining developed nation status by 2045.

Nearly 1,600 delegates gathered in the National Convention Center, located in the capital, for the opening ceremony.

The ceremony followed a preparatory session on Monday, when the working agenda, election regulations and other issues were discussed so that the conclave can run smoothly through its last day, Feb. 2.

"The Congress will work out concrete goals and tasks that need to be accomplished toward important milestones in 2025, 2030 and 2045," Tran Quoc Vuong, a standing member of the party secretariat said in his opening remarks.

The delegates are to officially endorse economic targets meant to help the country emerge from the lower-middle-income level by 2025.

Vietnam is among a group of countries with gross national income per capita between $1,036 and $4,045. Its GNI per capita stood at $2,590 in 2019, according to the World Bank.

The country celebrates the 50th anniversary of southern liberation and national reunification in 2025. The Fall of Saigon came on April 30, 1975, when the People's Army of Vietnam and the Viet Cong captured what was then the capital of South Vietnam and the headquarters of the U.S. military in the country.

Saigon was renamed Ho Chi Minh City and is now the nation's commercial hub.

Vietnam has its sights set on becoming a developing, upper-middle-income country with modern industry by 2030, when it celebrates the 100th anniversary of the founding of the Communist Party of Vietnam.

Upper-middle-income economies have GNI per capita of $4,046 to $12,535. Southeast Asian economies with upper-middle-income status include Indonesia, at $4,050; Thailand, at $7,260; and Malaysia, at $11,230.

By 2045, Vietnam aspires to be a high-income developed country. That year will mark the 100th anniversary of the establishment of the Democratic Republic of Vietnam, now the Socialist Republic of Vietnam. High-income economies have GNI per capita of $12,536 or more.

"The 13th National Party Congress takes place [as] the country faces intertwined opportunities and challenges," Prime Minister Nguyen Xuan Phuc said in his opening remarks. He also noted the "many emerging strategic issues that need to be addressed."

Vietnam looks to leverage the economic advantage it gained as one of the few countries to have expanded its gross domestic product in 2020. The economic measure grew 2.9% thanks to Vietnam's ability to keep the coronavirus at bay. The International Monetary Fund projects Vietnam's real GDP to grow 6.7% in 2021.

"Despite great and historic achievements gained over the past 35 years of doi moi [renovation] policy," Phuc said, "there remain shortcomings that need to be addressed in order to realize our country's aspiration of a strong and prosperous nation by 2045."

Prime Minister Nguyen Xuan Phuc opens the 13th National Congress in Hanoi on Jan. 26 by noting Vietnam "faces intertwined opportunities and challenges."   © Reuters

Among the key issues to be addressed, reforming state-owned enterprises stands out as it has not progressed in the past five years. This is because the country has achieved high growth by virtue of an export-led economy that relies on foreign capital.

If low-profit state-run companies are allowed to survive, there is a risk of corruption, which could adversely affect Vietnam's development as the companies cannot compete with the foreign capital that is powering much of the rest of the economy.

Another big issue is Washington's increasing pressure on Vietnam to address the countries' trade imbalance. In December, as the U.S. counted down the final days of the Donald Trump administration, the Treasury Department designated Vietnam a currency manipulator.

"Although the [Joe] Biden administration will not ignore America's large and swelling trade deficit with Vietnam, it may adopt a more rational approach to address it," Le Hong Hiep, a fellow at the ISEAS-Yusof Ishak Institute in Singapore, noted in a recent report. "Instead of accusing Vietnam of currency manipulation -- an allegation that Vietnam has consistently denied, and scholar and analysts have proven to be unfounded -- the Biden administration may pressure Vietnam to import more from the U.S. and stop Chinese companies from rerouting their exports to the U.S. through Vietnam."

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more