Vietnam: Building a Human Economy in 2021-2030 period, with a vision towards 2045

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The accelerating Industrial Revolution 4.0 (4IR) is altering structures of many sectors in the economy, as well as generating strong and mixed impacts on the labour market. Technology and innovation are emerging as a new and vital engine for Vietnam’s development. Despite the great benefits it ensued, these factors can also create new challenges in controlling inequality due to sharply increasing returns to ideas, capital and skills in relation to low returns to labour.

In many countries, the process of globalisation is seen as going too far and too fast and thus requires some adjustments. It results in the rise in protectionism tendencies in some major world powers. Trade flows of goods and investments tend to decline. Although new-style FTAs such as CP TPP, EVFTA are expected to bring positive impacts on growth, they can possibly contribute to rising inequality in Vietnam, since skilled labour groups and wealthy population will benefit more from these agreements than the rest.

The acceleration of aging population, urbanisation, middle-class transformation in emerging economies, climate change, environmental pollution, non- traditional security, etc. are among the prominent and emerging trends that have multidimensional effects on the contemporary world. Towards 2030 or even further to 2045, increasing wealth inequality potentially threatens the social cohesion in particular and the development of Vietnam in general.

Building A Human Economy in Vietnam: Promoting inclusive growth(1) and curbing the soaring wealth inequality

In my opinion, Oxfam’s concept of “Human Economy” shares similarities with the Vietnam Sustainable Development Strategy for 2011-2020, which views people as the centre of sustainable development.(2)

We should lay out a strategy for an inclusive development.(3) The solutions must keep inequality in check, enhance the Human Economy, and maintain social cohesion through:

• Promoting equality of opportunities in accessing essential public services.
• Controlling wealth inequality with an appropriate plan in implementing property tax, inheritance tax.
• Promoting inclusive digital platforms that are beneficial for all such as e-commerce, cloud computing, etc. to tackle income inequality.
• Encouraging new business models, hybrid business models that pursue dual goals of financial sustainability and contribution to society.(4)
• Designing and implementing effective programs to support ethnic minority groups and other disadvantaged groups to participate in and benefit from the development process.
• Counting unpaid care work to fully recognise women contribution to the country’s development.
• Creating multiple information channels to enhance transparency and accountability, and mechanisms to strengthen people’s participation that are apt for the transition towards a middle- class society in 2030

References

1 Solutions to promote inclusive development are detailed in the 2015 Vietnam Human Development Report “Growth for All” co-created by the Vietnam Academy of Social Sciences and the United Nations Development Programme in Vietnam

2 Source: Decision on Vietnam Sustainable Development Strategy period 2011 - 2020 432/QD-TTg, dated 12 April 2012

3 Solutions to promote inclusive development are detailed in the 2015 Vietnam Human Development Report “Growth for All” co-created by the Vietnam Academy of Social Sciences and the United Nations Development Programme in Vietnam

4 Globally, there have been good experiences in this model. For example, in a multinational cooperative in Spain (which has 13 billion dollars in income and 74,000 workers), the decision was made democratically; the work is guaranteed, and the difference between the highest and lowest income employees is no more than nine times.