The hope for Vietnam to catch up with the regional economies is vague without further reform, said the report of the State-level scientific research project. “The economic growth model of Vietnam in the period 2011-2020: from awareness to action” conducted by the National Economic University.
The report is made at the request of the National Assembly Economic Committee quoted data on the incomes of Vietnam and the regional countries previously collected by the International Monetary Fund (IMF).
It says the gross domestic product (GDP) per capita of Vietnam has risen from US$114 in 1991 to US$1,061 in 2010, calculated on the exchange rate. At the same time, China’s per capita GDP has surged from US$353 to US$3,915.
In other words, Vietnam’s comparative average income per capita has gone down from a level equal to 32% of China’s in 1991 to 27% in 2010.
Meanwhile, calculated on purchasing power parity (PPP), Vietnam’s GDP per capita has jumped from US$706 in 1991 to US$2,948 in 2010. The figures of China are US$888 and US$6,786.
As such, the ratio of Vietnam’s income per capita calculated on PPP to that of China has dropped from 80% in 1991 to 43% in 2010.
In comparison with other ASEAN countries, the gap has been narrowed down but still remains large.
In 1991, Vietnam’s GDP per capita in terms of PPP was equal to one half of the Philippines’ and Indonesia’s, one fifth of Thailand’s and one tenth of Malaysia’s. After almost 20 years, the figures have exceeded three fourths, one third and one fifth respectively, said Pham Hong Chuong and his colleagues at the National Economics University.
Regarding the nation’s GDP per capita of US$1,061 calculated on exchange rate and US$2,948 on PPP in 2010, Chuong said: “Such figures are still far lower than the average level of the region, Asia and the world.”
After a quarter century of reform and openness, Vietnam has moved from a low-income to a middle-income country, according to the standards of the World Bank, said Chuong.
However, he said Vietnam’s economic growth has yet to clearly reflect the determination and ability to escape the risks of lagging development. In addition, multiple potential risks to the growth sustainability have emerged in recent years.
The report indicates the rate of unemployment is 4.6% in urban areas and 20% in rural areas, meaning over ten million laborers are completely jobless in Vietnam.
The fact that Vietnamese income is left behind the regional countries is not a new issue. The Vietnam Development Report 2009 of the World Bank showed that the average income per capita of Vietnam was 51 years behind Indonesia, 95 years behind Thailand and 158 years behind Singapore.
Based on the growth in Vietnam’s income per capita calculated on fixed prices in the 2001-2007 period, the report concluded that it would take many years for Vietnam to catch up with regional nations.