It will be very difficult for Vietnam to achieve a per capita GDP of 2,300 USD by 2015 as targeted, said veteran economist Le Dang Doanh.
In his report delivered early this week at the ongoing National Assembly meeting, Prime Minister Nguyen Tan Dung said Vietnam would aim for GDP of 2,300 USD per capita by 2015. Is this achievable?
Using US dollars to calculate GDP per capita in our country will create a big gap compared to people’s real income.
According to the Vietnam General Statistics Office (GSO), our GDP per capita in 2012 was 1,749 USD. And this year, it is expected to be about 1,914 USD – an increase of 9.4 percent.
The country’s economy is expected to be worth about 173 billion USD. However, in the current economic downturn, personal income is much lower than the figure projected by the GSO.
That’s why reaching 2,300 USD per capita by 2015 would require our economy to achieve very high average growth. I don’t know how we are going to achieve such an ambitious target.
It is a matter of fact that our economy is downsizing. Our people are facing many difficulties. I think the government should explain to the people what the country will do to achieve that target.
I’d like to point out that, in 2012, the Vietnamese dong lost 3 percent of its value against the US dollar due to high inflation. Thus, per capita GDP in US dollars was already higher than the people’s actual income in Vietnamese dong.
Furthermore, in 2012 the inflation rate was 9.2 percent.
Although in term of figures, our per capita GDP has increased, living conditions are not much better. Is this a fair assessment?
Given the depreciation of local currency, people’s purchasing demands have increased in recent years. That means they need more money.
Right now I don’t think there is any comprehensive analysis available on the real income of the Vietnamese people over the last few years. But I’m pretty confident that their real per capita GDP is not as high as that reported by the GSO.
In its Vietnam Development Report 2009, the World Bank said Vietnam’s per capita GDP was 51 years behind Indonesia, 95 years behind Thailand and 158 years behind Singapore. Do you think these figures reflected the true picture of our economy at that time?
Well, the WB comment should be considered as food for thought for Vietnam. I have to concede that the real income of our people is still far away from those of other ASEAN nations and China, though it has improved sizeably in the last 25 years.
Vietnam has become a middle income country in accordance with WB criteria. However, looking at it from a different perspective, I think our economic growth has not truthfully reflected both the nation’s resolve and capacity to prevent falling back behind.
So what should we do to improve our income per capita?
The first priority is to score a higher GDP. The second is to stabilise the exchange rate. And perhaps more importantly, there needs to be sustainable development.
Vietnam must be able to maintain a high GDP for many consecutive years. In the immediate future, we must reduce the inflation rate, while retaining our currency’s value against major foreign currencies, particularly the US dollar.