The Trans-Pacific Partnership (TPP) agreement will provide economic impetus predominantly, economically and strategically significant to Vietnam, according to economists.
The economic experts said Vietnam will receive the biggest boost, nearly 10 %, which is attributed to preferential access of its textiles and apparel industry to the US and other key markets. The details of the controversial free trade agreement have been revealed to the public after almost seven years of discussions.
Vietnam has renewed its economic mechanism, boosted renovation and improved the business climate with a view to attracting more foreign investors. In addition, challenges facing the country include the reduction in the State budget from import tax and the pressure on competition from foreign service and goods, even as human resource and high-tech quality remain poor.
Concerning the outlook for 2016, Associate Professor Trung Thanh of the National Economic University said world economic growth tended to improve thanks to the developed countries such as the US.
This year, Vietnam's economy will continue to recover as the world economy bounces back stronger than before in which foreign direct investment (FDI) plays an important role, Thành said. Việt Nam will participate in the global value chain and receive numerous opportunities from the free trade agreements so as to increase exports and attract more investment capital. Thanh predicted that in 2016, monetary policy would be narrowed and the exchange rate can be adjusted.
Prices of some commodities would become higher. The increased pressure on public debt and limited participation of private companies due to their poor finance and abilities would influence the country's economy. Moreover, Vietnam lacks a long-term motivation for growth, so it needs to renew its growth model and restructure the economy by focussing on important industries.
The World Bank Group (WBG) consists of five financial organisations: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Financial Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).
Vietnamese Ambassador to the US Pham Quang Vinh and representatives of four TPP member countries informed the public in each country about the trade deal and potential future challenges that may be created by its signing and implementation. Vinh said the agreement is economically and strategically essential to Vietnam and other members, hoping that Vietnam will receive technical support from others to quickly adapt to the new economic environment created by the TPP. He noted that many countries including several TPP members have recognized Vietnam as a market economy. Vietnam is proactively urging the US to do the same.
Source: The Hanoitimes
Key words: Economists, TPP to help Vietnam, improve, competitiveness
