Vietnam vows change to build modern economy

Vietnam’s ruling communists vowed on Wednesday to overhaul the country’s economic growth model in order to build an industrialised nation by 2020, while fostering “democracy” within the party.

Two decades ago Vietnam was feted as the new “Asian Tiger” but it now faces troubles including soaring inflation, a struggling currency, a trade deficit and problems among its state-owned enterprises — a key pillar of the economy.

The nation must “renew the growth model and restructure the economy to speed up industrialisation and modernisation with fast and sustainable development,” Communist Party leader Nong Duc Manh said.

“The strategy is to strive towards 2020 so that our country will basically become an industrialised nation,” Manh told almost 1,400 delegates in a speech at the opening of the party’s five-yearly congress.

The secretive meeting at a cavernous Hanoi convention centre, guarded by police armed with assault rifles, is expected to pave the way for a new term for Vietnam’s ambitious and media-savvy Prime Minister Nguyen Tan Dung.

The party outlined a series of measures, which analysts and foreign investors have also called for, to help the country realise its economic potential.

Vietnam’s growth model has relied on natural resources and unskilled labour to achieve rapid growth, but Manh spoke of moving to a more advanced system of production based on science, technology and “high-quality human resources”.

Manh, the party’s general secretary, also called for a “knowledge-based economy” with reform in the education system, which experts have said is far from an international standard, afflicted by corruption and unsuited for providing the skilled workforce the country needs.

Addressing a major concern of foreign investors, he said Vietnam must upgrade its transport infrastructure, including airports and seaports.

Manh, who is expected to retire after this congress, touched only briefly on the country’s immediate economic problems — such as soaring inflation and a weakening currency — noting a need to “stabilise the macroeconomy.”

Unlike many Asian countries, Vietnam spends more on imports than it earns from exports — a discrepancy that has to be financed. The trade deficit last year exceeded 12 billion dollars, official data showed.

Vietnam has enjoyed economic growth that ranked among the fastest in Asia since the war-shattered country began to turn away from a planned economy in the mid-1980s to embrace the free market, a policy called “Doi Moi”.

Today Vietnam has a “socialist-oriented market economy” where the state sector maintains “the key role,” said Manh, wearing a red tie.

He spoke of improving “democracy” within the party and singled out the role of the National Assembly, which observers say has become more outspoken.

Civil society groups also have more of a presence in Vietnam than they did even a decade ago, said Ben Kerkvliet, emeritus professor at the Australian National University in Canberra.

“I see more positive political change in Vietnam during the last 20 years than I see in the Philippines”, he said.

But radical political change has been ruled out by the communists. On Monday a member of the elite Central Committee said the party was determined not to have political pluralism.

Western countries have expressed concern about freedom of expression and human rights, which they say could help the country’s growth if they were strengthened.

President Nguyen Minh Triet, who is also expected to retire, told congress delegates “the great thoughts of Ho Chi Minh together with Marxism and Leninism will always be the ideological foundation, and the guiding star for the activities of the Vietnamese party and revolution”.

Red banners hang throughout Hanoi and large portraits of Ho, the revered founding president, have been erected to welcome delegates, elected by their communist colleagues to represent the party’s more than 3.6 million members.