USING DESCRIPTIVE STATISTICS TO QUANTITATIVELY ANALYZE ECONOMIC DEVELOPMENT OF VIETNAM Pham Dang Quyet1 ABSTRACT This talk uses the techniques of descriptive statistics to quantitatively analyze Vietnam's economic development In this talk, the concept of development is understood according to the World Economic Forum The World Economic Forum divides the economies of the world into five stages of development, taking into account GDP per capita and the weights of the major drivers of the economy: (1) factor-driven stage, (2) efficiency-driven stage, (3) innovation-driven stage and two transition stages: one from stage to stage and one from stage to stage Currently, Vietnam is assessed in the transition from stage to stage Using tables and graphs of time series data from IMF World Economic Outlook (April 2018) the author analyzes Vietnam’s development stages from 1960 to 2018, compares them with development stages of Malaysia and South Korea and gives three scenarios of Vietnam’s economic development Keywords: applied statistics, descriptive statistics, economic development, drivers of the economy, catch up INTRODUCTION Statistics is the science of studying data, which is the science of collecting, organizing, and interpreting digital facts that we call data There are two main statistical methods used in data analysis: descriptive statistics, the method of summarizing data from a sample using indicators such as mean or standard deviation, and inference statistics that draw conclus io ns from random variation data (e.g error of observations, sample of population) "Applied statistics" includes descriptive statistics and applications of inference statistics (evidences) Descriptive statistics and inference statistics provide a simple summary of the sample and the measures Together with simple graphical analysis, they provide the basis for all quantitative analysis of the data In order to understand the phenomena and make the right decisions, the basic methods of describing data should be grasped There are many techniques used These techniques can be classified as follows: Graphical representation in which graphs represent data or help to compare data; Demonstrate data into summary tables of data; Summary statistics (in the form of unique statistical values) describing the data This paper uses the techniques of descriptive statistics to quantitatively analyze Vietnam's economic development In the article concept of development is understood according to World Economic Forum The World Economic Forum divides the economies of the world into five stages of development, taking into account GDP per capita and the weights of the major drivers of the economy: (1) factor-driven stage, (2) efficiency-driven stage, (3) innovation-dr ive n stage and two transition stages: one from factor-driven stage to efficiency-driven stage and the other from efficiency-driven stage to innovation-driven stage Currently Vietnam is assessed in transition from stage to stage Vietnam Statistical Association, 54 Nguyen Chi Thanh, Hanoi, Vietnam, phamdangquyet@gmail.com Using tables and graphs of time series data from IMF World Economic Outlook (April 2018)2 the author analyzes Vietnam’s development stages from 1960 to 2018, compares them with development stages of Malaysia and South Korea and gives three scenarios of Vietnam’s economic development To achieve the goal of becoming an industrialized modern country that towards prosperity, creative, equitable and democratic in 2035 Vietnam needs to plan a proper developme nt direction, namely to make progress on the 12 pillars of the Global Competitive ne ss Framework, in which spearhead higher education and training, good market efficie nc y, labor market efficiency, financial market development, technology readiness, business sophistication and innovation, which play a vital role of development QUANTITATIVE ANALYSIS The World Economic Forum divides the economies of the world into five stages of development, taking into account GDP per capita and the weights of the major drivers of the economy (Table – Table of data) Each development stage of the national economy is characterized by a certain proportion of each of the major drivers Thus, for the first stage, weight for basic requirements is important (60%), which include the pillars: institutions, infrastructure, macroeconomic environme nt, health and primary education, while the weight for innovation has little impact on development (5%) For the second development stage - efficiency-driven - the weight for the basic requirements is less influence than the weight for efficiency enhancers (50%), which includes the pillars of higher education and training, good market efficiency, labour market efficiency, financial market development, technological readiness and market size In the third development stage - innovation-driven - the highest level over the previous stages will be the weight for innovation and sophistication factor (30%), includ ing innovation and business sophistication (Figure - Block diagram) But nowadays in the context of Fourth Industrial Revolution, the World Economic Forum is introducing the new Global Competitiveness Index 4.0 The GCI 4.0 framework is organized into 12 main drivers of productivity, or ‘pillars’ (Figure 1) It places a premium on factors that will grow in significance as the 4IR gathers pace: human capital, agility, resilience, and innovation4 This data has been updated by IMF World Economic Outlook (October 2018) but in this article still use data updated in April 2018 GDP is expressed in current U.S dollars per person Data are derived by first converting GDP in national currency to U.S dollars and then dividing it by total population The Global Competitiveness Report 2018 In this presentation, the author still uses the information contained in The Global Competitiveness Report 2017–2018 Table (Table diagram) classifies economies by each stage of development Source: The Global Competitiveness Report 2017–2018 Vietnam is assessed in transition from stage to stage The factor-driven stage is extended to 53 years (from 1960 to 2013), while the period 2014-2020 (6 years) is the transition from factor-driven stage to efficiency-driven stage (Figure - Graph of time series) Figure Comparison of development stages of Vietnam, Malaysia and South Korea 1960-2018 Source: IMF, World Economic Outlook (April 2018), Roslina Md Isa Malaysia [2], and author’s adjustment The factor-drive stage of Vietnam (from 1960 to 2013) is longer than that of Malaysia and Korea (1960-1968) due to many reasons In particular, political causes have the strongest impact on development Vietnam experienced a long period of war until 1975 After 1975, during the period 1976-1989, the country did not successfully implement the socioeconomic development policy in the centralized planning model Vietnam has lagged far behind the other countries in the region From the above analysis, an important question is raised: how can Vietnam shorten the development stages to catch up with developed countries in 2035? Table Comparison of GDP per capita by PPP in dollars in 2011 in some selected countries Singapore Korea Malaysia Thailand China Indonesia Philippines Vietnam 1980 8853 2184 3300 1605 310 1250 1886 435 1990 22198 7519 6762 4264 979 2880 2635 952 1991 23784 8489 7539 4721 1091 3189 2645 1022 2000 40984 16452 12789 7358 2918 4647 3390 2058 2008 63447 27464 19502 12258 7583 7637 5175 3924 2015 87043 36395 26228 16199 14330 11157 7332 6035 2018 98014 41388 30858 18944 18066 13162 8893 7463 Source: IMF, World Economic Outlook (April 2018) To assess a country's wealth the economists use the Gross Domestic Product per capita by purchasing power parity for international comparisons, the data are derived by dividing constant price purchasing-power parity (PPP) GDP by total population Figures in Table (Summary table) show that Vietnam lags behind South Korea for about 28 years, Malaysia around 27 years, Thailand for about 18 years, China and Indonesia for 10 years, and near Philippines Source: IMF, World Economic Outlook (April 2018), and author’s calculation Figure (Graph of predicted time series) shows that Vietnam's GDP per capita is 7,463 USD (by PPP in dollars in 2011) in 2018, with growth at 5% per year, GDP per capita will reach 16,302 USD in 2035, which is equivalent to the average annual income of Malaysia in 2005 and Thailand’s in 2015 This is the average growth rate of Vietnam in the period 2000-2018 and much higher than the growth rate of 3.8% per year for middle income countries in the same period However, with a lower growth rate but more feasible at 4% per year, Vietnam's GDP per capita only increased to 14,536 USD by 2035 and this is equivalent to the average annual income of Thailand in 2012 and China’s in 2015 With a growth rate of 7% per year (optimistic growth scenario), GDP per capita of Vietnam in 2035 will be approximately 22,467 USD that equivalent to South Korea's average income per capita in 2005 or Malaysia’s in 2012 Such higher growth rate will help Vietnam catch up with Indonesia and overtake the Philippines DEVELOPMENT DIRECTIONS FOR VIETNAM In order to catch up with a number of countries in the region, Vietnam needs to plan a suitable development strategy for a long time The current per capita income of Thaila nd and China is nearly 2.5 times larger than Vietnam’s, but their income growth rate is approximately or even higher than Vietnam’s If Vietnam maintains its current growth rate, we cannot catch up with them for 20-25 years with per capita income This suggests that the goal of catching up with these two countries in the medium term is not feasible However, that does not mean that Vietnam needs such timeframes to reach the current level of development of these countries In development economics, there is a well-known argument for the advantages of the latters (advantages of backwardness) and a related hypothesis of shortening and narrowing the process of economic development (compressed industrial development) (Liu, 2006) The essence of this thesis is that the latters have advantages in using technology, business knowledge, management experience from advanced countries and can shorten the development process Lee and Lim (2001) have introduced three patterns of catching-up based on Korean experience They are path-following catching-up, stage-skipping catching- up and path5 creating catching-up Path-following means that companies in developing countries follow what innovative companies did before in successive stages but in a more efficient way By stage-skipping way, companies in developing countries may skip a few stages to jump to the next stage in a parallel way to innovative companies in developed countries Path creating require breaking down the way in which innovative companies did before and developing their own technology to bridge the gap with industry leaders Both stageskipping and path creating are the way of leapfrogging In the 21st century, with a comparative advantage in human resource development and a late arrival in a dynamic region in terms of technology, capital, and business skills development, Vietnam is likely to shorten its to develop with neighboring countries However, that is just the opportunity and potential to be shown to Vietnam In order to catch up with neighboring countries with higher levels of economic development, Vietnam's path of chasing should be chosen as a leapfrogging In order to successfully implement this development plan, it is necessary to plan a proper development direction, namely to make progress on the 12 pillars of the Global Competitiveness Framework, in which spearhead higher education and training, good market efficiency, labor market efficiency, financial market development, technology readiness, market size, business sophistication and innovation, which play a vital role of development Without that progress, Vietnam cannot exploit opportunities, nor can overcome the challenges and consequently the risk of lagging further and difficult to achieve the goal of becoming an industrialized modern country that towards prosperity, creative, equitable and democratic in 2035 REFERENCES IMF (2018), World Economic Outlook (April 2018), http://www.imf.org/external/datamapper/datasets/WEO Isa, R.Md (2016), Empirical productivity analysis and policy recommendations for productivity enhancement - Malaysia's approach and experience, Vietnam Productivity Institute Conference, Hanoi Lee, K and Lim, C (2001) Technological regimes, catching up and leapfrogging: finding from the Korean industries, Research Policy 30, pp 459-483 Liu, X (2006) Path-following or Leapfrogging in Catching-up: the Case of Chinese Telecommunication Equipment Industry, Paper no 2007/01 Centre for Innovatio n, Research and Competence in the Learning Economy (CIRCLE) Lund Univers ity, Beijing Pham Dang Quyet (2017), Vietnam’s Economic growth and economic development – factors and prospects, Banking Technology Review, Issue No 130&131, January and February 2017, ISSN 1859-3682, Banking University Ho Chi Minh City World Economic Forum (2018) The Global Competitiveness Report 2017–2018, https://www.weforum.org/reports/the- global-competitiveness-report-2017-2018s ... of the world into five stages of development, taking into account GDP per capita and the weights of the major drivers of the economy (Table – Table of data) Each development stage of the national... be shown to Vietnam In order to catch up with neighboring countries with higher levels of economic development, Vietnam' s path of chasing should be chosen as a leapfrogging In order to successfully.. .Using tables and graphs of time series data from IMF World Economic Outlook (April 2018)2 the author analyzes Vietnam? ??s development stages from 1960 to 2018, compares them with development