VietNamNet Bridge – Vietnam has lagged farther behind the rest of the world due to its outdated growth model and mindset, experts and economists told a forum held in Hanoi last week to review 30 years of reform in the country.

The event was held in response to the Government’s Resolution 62 which requires a review of Vietnam’s economy in the 1986-2015 period and a comparison of it with the rest of world, according to Tran Dinh Thien, director of the Vietnam Institute of Economics.

Dr. Nguyen Quang Thai, former deputy head of the Development Strategy Institute under the Ministry of Planning and Investment, said Vietnam’s lagging far behind the rest of the world is a reality.

“An old mindset is to blame for the situation. Our growth model has turned out to be wrong while institutions are not strong enough to create a driving force for more growth,” Thai said.

He noted Vietnam is also out of tune with the world’s development trends.

According to Luu Bich Ho, former head of the Development Strategy Institute, the perceptions of a socialist-oriented market economy, collective ownership of land, the leading role of the State corporate sector have dampened growth.

Thien said he did not deny the remarkable achievements made in the past decades, including high growth in many years in a row, but Vietnam has been left behind by other countries and the growth gap between Vietnam and them has been widening fast. Vietnam is also rated low in terms of development targets in world rankings.

For instance, Vietnam’s economic strength is increasingly low compared to that of China. When Vietnam began doi moi (reform) policy, its gross domestic product (GDP) accounted for 4.1% of China’s based on the fixed price of 2005, but the proportion dropped to 1.9% in 2013.

Based on the purchasing power parity (PPP), Vietnam’s position barely changed, and the relative worth of the Vietnamese is rapidly declining against that of the Chinese.

Data given by Thien showed that in 2035 the average wealth of the Vietnamese would remain far behind the Taiwanese and South Koreans, and account for half the Japanese’ and a third of the Singaporeans’ recorded in 2011.

From this year, it will take Vietnam 10, 12, 17 years respectively to surpass the levels achieved in 2011 by China, Thailand and Malaysia.

“If Vietnam does not make breakthroughs in the next decades, nothing would be changed,” Thien warned.

Thien’s view was supported by an analysis by Dr. Nguyen Quang Thai. Thai said regarding education, Vietnam is in the lower half of the Human Development Index, at 121st out of 187 countries.

With the International Property Rights Index, Vietnam is also near the bottom, at the 108th position out of 130 entries. A near-bottom position is also seen at Vietnam’s index of pollution (102/124).

Besides, Vietnam is placed 123rd among 182 countries in terms of income per capita and 116th among 177 countries in terms of corruption.

Vietnam scores only 22.58 points in terms of quality of life (72/76) and its healthcare is also poorly rated (160/190).

The income per capita gap between Vietnam and the world’s average was around US$4,000 in 1990. But when Vietnam’s GDP per capita has reached US$2,000, the gap has doubled with the global average exceeding US$10,000.

This means the economic strength of Vietnam has not improved though its population has increased by almost two times, according to Thai. The country is also outdated in terms of infrastructure, personnel quality, science-technology and institutions.

Thien said selecting a right development strategy is crucial.