The Vietnam Annual Economic Report 2022 - Enhancing the digital platform for the service industry

Enhancing the digital platform for the service industry - Value policy recommendations at the Conference on the Announcement of the Vietnam Annual Economic Report 2022

Hanoi, on May 20th, 2022, the Conference on the Announcement of the Vietnam Annual Economic Report 2022 (VAER 2022) will be held by the Vietnam Institute for Economic and Policy Research (VEPR) under the University of Economics and Business – VNU, and the Friedrich Naumann Foundation (FNF). The conference will take place at the Sheraton Hotel, with the participation of policy makers, scientists from international organizations and press agencies.

The Vietnam Annual Economic Report is a key product of the Vietnam Institute for Economic and Policy Research (VEPR) under the University of Economics and Business – VNU and has been published for the 14th consecutive years. The Institute's annual reports focus on independent research and analysis, based on evidence from practice. In addition, the reports also highlight achievements, difficulties, opportunities and challenges in the process of economic development in Vietnam, contributing to providing a scientific basis for macroeconomic policymaking, at the same time, selectively discuss some major and in-depth economic issues of Vietnam.

Vietnam Annual Economic Report 2022 focuses on the topic: Enhancing the digital platform for the service industry. In 2021, the complicated development of the COVID-19 pandemic in Vietnam has seriously affected the entire economy. Many economic sectors and fields were in decline or stagnation. Many enterprises and business households had to stop operating, dissolve or go bankrupt, causing millions of workers to lose their jobs. In that context, the service industry faces great pressure from the impact of the pandemic, as well as from changes in the methods to prevent, fight and control the disease. However, digital transformation in industries and sectors, including the service sector, was an important achievement in helping enterprises and business households adapt and gradually recover by the end of 2021 and the beginning of 2022. Nevertheless, Vietnam's economic recovery has been somewhat deviated compared to many other countries in the world, requiring the promotion of motivations to maintain the growth rate to pre-pandemic levels. Therefore, Vietnam needs to accelerate economic restructuring in association with renovating the growth model based on innovation and improving the digital economic platform. Digital transformation for the service industry is considered to create a direct impetus for economic growth, on the other hand, create spreading effects on all sectors of the economy through providing high-quality inputs and ensuring outputs for the agricultural and industrial sectors.

This year's Annual Report by Assoc Prof. Dr. Nguyen Truc Le, Assoc Prof. Dr. Nguyen Anh Thu and Dr. Editor-in-Chief Nguyen Quoc Viet has gathered the participation of a large number of scientists, economic research experts, and lecturers from research institutes and universities. The report has received the advice and criticism from many senior experts in the economic field. The report will be a useful reference for managers, policymakers, researchers as well as for everyone interested in issues of macroeconomics and development policy in Vietnam in recent years. 

The Vietnam Annual Economic Report 2022 Announcement Conference was held at the Sheraton Hotel, facilitating the direct exchange and discussion among experts on the topics discussed in the conference. The conference attracted great attention with the presence of many policy makers and domestic and foreign senior economic experts. The list of participants in the conference includes many leaders and representatives of government agencies, policymaking agencies, national and international theoretical and research institutions, leaders of universities and research institutes, representatives of many embassies, international development organizations in Vietnam, international donors, unions and associations, businesses, banks and press agencies.

Summarizing the Seminar, Assoc.Prof.Dr. Nguyen Anh Thu, Vice President of the University of Economics, has made a number of important policy recommendations to improve the digital platform for the service industry with the following key points:

Short-term policy recommendations

  • Due to limited fiscal resources, policies to support businesses and people during the pandemic need to be focused, economical, and at the right place. Design a package of policies to stimulate and restore production/business in general for all types of businesses and business households, support policies/credit guarantees, especially for small and medium enterprises/micro-small businesses as well as business households after the pandemic has been basically controlled. All subsidies on income tax or luxury spending should be eliminated.
  • Fiscal policies should play a key role in supporting the recovery of the economy. Monetary policy needs to maintain a state of "adaptation" to the current state of the economy, continue to balance inflation and financial risks with support for economic recovery, and clear capital flows.
  • Public investment should only focus and accelerate on planned national key projects. The policy of supporting interest rates should still be maintained so that businesses can restore production and promote growth.
  • Completing a set of indicators to evaluate digital transformation of enterprises to serve as a basis for building digital transformation strategies at all levels. Publication of manuals for digital transformation for businesses.
  • Strengthen the promotion of digital transformation in the service industry, namely building technology infrastructure, encouraging enterprises to develop equipment, and promoting the application of technology in daily tasks.
  • Promoting the improvement of the quality of digital human resources with training programs on technology, helping businesses adjust their business structure, processes and culture to the digital transformation platform.

Policy recommendations in the medium and long term

  • In the medium term, it is necessary to strengthen social security, energy security, promote the flexibility of monetary policy and increase the resilience of the banking system. The social security packages for the affected people need to be maintained and at the same time expand the beneficiaries of the policy, focusing on the group of workers in the informal sector. It is necessary to move towards a transition to green energy, renewable energy, ensure energy security through energy reserve which a strong enough, diversify and avoid depending on one energy source. Vietnam must closely monitor the price increase trend in order to promptly adjust appropriate policies to help ensure macroeconomic stability.
  • In the long term, it is necessary to continue to restructure the economy, promote productivity enhancement - the core of competitiveness, and upgrade participation in global value chains.
  •  Implement the national digital transformation strategy.
  •  The government needs clear planning on IT, Communication and energy infrastructure. Attract investment in digital infrastructure development and “clean” renewable energy in addition to public investment. Review and improve equal access to digital infrastructure.
  • Strengthen cybersecurity capabilities through skills acquisition, using block chain systems to protect data, and building trusted public systems.
  • Attracting foreign investment for digital devices in education. Develop a roadmap in the education system to develop a quality digital human resource infrastructure. Promote e-commerce and high-tech services.
  • Implementing digital transformation of the public sector and developing digital government.
  • Building innovation ecosystems, technology centres and high-tech parks. Implement intellectual property registration on the block chain, conduct it online, and publish instructions and information on types of copyright and protection Intellectual property needs to be protected in a highly digitalized future.