(VOV) - The cultivation of creative thoughts is needed to ensure the sustainable development of the creative economy and to avoid the “middle-income trap”.
ADB official: Vietnam able to avoid middle income trap Vietnam no longer listed in low-income countries
Eight months of 2011 have passed with numerous challenges facing the entire society. There are now growing concerns among people, businesses, and managers over the complex situation of pricing and the rate of inflation. This shows a snapshot of Vietnam’s economy a year after escaping from the low-income status.
However, Vietnam has been warned against the “middle-income trap”. While economic growth is a top priority for the country, these warnings should be heeded.
According to the World Bank’s criteria, middle-income countries are those with per capita income of US$996-US$12,195. Vietnam, with per capita income reaching US$1,168 in 2010, is still among the lower middle-income countries. It is striving to increase the figure to US$1,300 in 2011 but this is by no means an easy task.
Regarding economic growth, Vietnam aims to reach a per capita GDP of US$3,000, a twofold increase compared to the present figure and an amount which would put the country in the top group of lower middle-income countries. However, the target will only be met if Vietnam becomes a modern industrialised country. That difficult task will take a significant amount of time and require great efforts.
The “middle-income-tax” mentioned by economists denotes the vicious circle which economies are in and which prevent them from escaping the middle-income status. Malaysia, Indonesia, Chile, and Brazil are cases in point. Although they enjoyed significant growth and escaped from the low-income status tens of years ago, they can not maintain that growth rate at present. In Asia, there are few countries such as the Republic of Korea and Singapore, which can avoid the trap and flourish into developed countries.
According to economists from major financial institutions such as the World Bank (WB), the Asian Development Bank (ADB), and the International Monetary Fund (IMF), Vietnam’s achievement of “middle-income” status is attributed to its exploitation of natural resources and cheap labour. When these factors are no longer Vietnam’s advantages, there will be no driving forces for economic development if the country does not change the growth model.
Analysis has shown the inefficiency of the economy, expressed in the high Incremental Capital Output Ratio (ICOR) index.
Vietnam, therefore, is giving top priority to changing its ways to achieve economic growth and sharing the achievement of the growth among people. This is more important than the “per capita GDP” figure.
The Government has addressed institutional improvement, human resource development, and infrastructure development as measures to reach a sustainable and continual development.
Human resource, and the additional value and creativeness which it provides, is among the most important factors for the development of the economy. However, improving the quality of education and training to provide a high-quality reserve of human resources in order to meet the global demand is now one of the most difficult tasks in Vietnam.
In order to ensure the sustainable development of the creative economy and avoid the “middle-income trap”, it is necessary to develop creative thoughts, especially in improving capacity to build development strategies and manage the economy of the Party and State apparatus.