Developing dynamic economic regions to create momentum for economic growth

The regional development has been a consistent and overarching policy of the Communist Party of Viet Nam during the country’s development process to exploit and maximise the potential and advantages of each region and locality to serve socio-economic development, ensure national defence and security, and improve the material and spiritual lives of the people.

Viet Nam’s strategic orientations have identified the need to develop certain areas ahead of others, creating growth drivers to pull other regions and the entire country to develop. The Socio-Economic Development Strategy for the 2001-2010 period states: “Promoting key economic regions to uphold their role as locomotives for rapid growth."

This direction reaffirmed and further expanded in the Socio-Economic Development Strategy for the 2011-2020 period: “Promoting the development of key economic regions, creating momentum and spillover effects to other regions.”

The Socio-Economic Development Strategy in the 2021-2030 period continues to set the task of building economic and financial hubs with special breakthrough mechanisms, institutions, and policies in some areas with exceptional advantages.

On this basis, the research team from National Economics University recently recommended carrying out synchronous solutions to boost the development of dynamic economic regions in pursuit of double-digit economic growth in the following period.

Firstly, mechanisms and policies should be improved to develop dynamic economic regions, early reallocating dynamic regions, and revising regional socio-economic development plans for the 2025–2030 period with a vision to 2050. These plans must reflect the new situation after mergers and serve as guiding frameworks for provincial and sectoral planning.

Secondly, regional institutions and governance should be upgraded while completing interregional and regional coordination mechanisms to overcome localism, which can lead to conflicts of interest and a lack of cooperation between localities within regions. Creating superior institutions with international competitiveness to promote new models in dynamic economic regions, such as development of free trade zones and international financial centres.

Thirdly, human resources in the region are to be developed, aiming to produce high-quality personnel, strengthening training based on market needs and linking training with business demands; the productivity and quality of science-technology activities in educational and training institutions should be enhanced; the development and issuing policies to attract and utilise domestic and foreign talents should be prioritised to quickly develop key and emerging sectors such as semiconductor manufacturing and artificial intelligence (AI).

Fourthly, the efficiency and spillover effects of regional infrastructure investment should be enhanced, while adjusting public investment allocations to increase funding for inter-provincial and inter-regional projects with high “breakthrough” potential and strong chain effects, and focusing on regional-level transport, energy, and digital infrastructure, especially infrastructure serving regional-level climate adaptation and resource management.

Fifthly, the business environment should be improved to effectively attract resources by exploiting regional comparative advantages. Accordingly, localities in a region should coordinate to build an attractive, transparent regional investment and business climate to attract and allocate social resources effectively. Region-level industry clusters should be established, along with policies to help small and medium-sized enterprises join the supply chains of larger firms. FDI attraction into key sectors in dynamic regions should continue, especially among high-tech sectors. A rational investment structure should be built among dynamic regions to maximise their spillover and driving effects on the national economy, while giving priority in state budget allocation towards regional linkages that serve national, regional, and local interests.

Sixthly, a regional mindset should be integrated into the planning and execution of socio-economic development programmes and policies. Experts recommend that to ensure that the regional factor is truly effective, the “regional” mindset must be deeply ingrained and ensure high enforcement in the planning and implementation of all national development programs and projects. It is especially vital to build high-quality information databases to support decision-making by all related sides, with the aim of fostering cooperation and regional linkages.

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