Global economic volatilities can hurt Vietnam: experts

Potential volatilities in the global economy can undermine Vietnam's economic growth, experts warned on Friday, putting forward suggestions for the Vietnamese government to deal with downside risks and make use of emerging opportunities.

At the "Opportunities and Challenges in the New Context: What Should Businesses Do?" workshop, hosted by The Investor in Hanoi on Friday, Prof. Nguyen Mai, chairman of the Vietnam’s Association of Foreign Invested Enterprises (VAFIE), highlighted that a major risk is the lower-than-expected growth of Vietnam's major trade partners such as the United States, China, and Europe.

Such a slowdown may hurt Vietnam's manufacturing-processing sector, which is the backborn of the country's export-oriented economy, he noted.

Other downside risks may come from the slow recovery of the domestic real estate sector, climate change-related natural disasters and the banking sector's decreasing ability to lend.

Mai proposed several solutions, including the State building required infrastructure to help boost digitalization, attracting investments into digitalization, updating the legal framework to support businesses, streamlining administrative procedures, and enhancing the linkage between foreign-invested and domestic enterprises.

Giving more incentives to AI, cybersecurity sectors

Can Van Luc, chief economist of state-controlled bank BIDV and director of BIDV Research & Training Institute, said that Vietnam's export revenues to the U.S. are increasing fast and the relocation of the global supply chain is benefiting Vietnam.

But he stressed some risks for Vietnam, including limited ability to attract investments into green transition, negative impacts of climate change, and outdated mechanisms for workforce development amid the digitalization and artificial intelligence (AI) trend.

He suggested authorities update the legal framework, allowing sandbox mechanisms and development of the carbon credit market. Luc also called for the engagement of both the private and state sectors in digitalization, and giving more incentives to the AI and cybersecurity sectors.

Infrastructure investments provide opportunities

At the event, Nguyen Anh Tuan, standing vice chairman of the VAFIE, said Vietnam is facing many challenges, including the volatile geo-political and economic factors in the world, climate change, demand for green transition and digitalization, and the outdated legal framework.

He listed conflicts in the Middle East and Europe, risks of "bubble burst" in the global stock market, troubles of the U.S. economy, natural disasters, and Industry 4.0 and AI taking away some traditional jobs.

On the other hand, the Vietnamese economy will see many opportunities, coming from its pacey growth, strong infrastructure investments such as the Long Thanh airport project, North-South high-speed railway project, Can Gio seaport project; and the improving legal framework, including updates to the laws on land, housing, and real estate business.

Grasping new trends and understand challenges

Nguyen Canh Hung, head of business banking at Hanoi-based private lender SeABank, said firms must grasp new trends and understand challenges to build suitable business strategies and adapt to changes. SeABank is committed to helping businesses with tailor-made products, he added.

He also highlighted support for trade businesses, which can help companies grasp opportunities from the global market, with efficient transaction solutions.

Proactively seeking opportunities

Dr. Vo Tri Thanh, director of the Institute for Brand and Competitiveness Strategy, highlighted the world trends of sustainable growth, green economy, circular economy, trade liberation, in addition to the aging population and the rise of the middle class in Asia.

However, confrontation in the global economy is leading to geopolitical tensions, disrupting and fragmenting the global supply chain, Thanh said.

He recommended Vietnamese firms proactively seek opportunities, collaborate with advanced businesses, and focus more on environmental, social, and governance (ESG).