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MINISTRY OF PLANNING AND INVESTMENT MINISTRY OF EDUCATION AND TRAINING CENTRAL INSTITUTE FOR ECONOMIC MANAGEMENT NGUYEN MINH THAO RANKINGS, CHALLENGES AND SOLLUTIONS FOR ENHANCING VIETNAM’S NATIONAL COMPETITIVENESS Major: Development Economics Code: 31 01 05 SUMMARY OF DOCTORAL THESIS Hanoi - 2020 The thesis is accomplished at: Central Institute for Economic Management Supervisors: Dr Nguyen Dinh Cung A/Prof Dr Nguyen Anh Thu Reviewer 1: Prof Dr Ngo Thang Loi Reviewer 2: Associate Prof Dr Tran Dinh Thien Reviewer 3: Associate Prof Dr Bui Van Huyen The thesis will be defended in front of the Thesis Evaluation Council to be held at Central Institute for Economic Management at : date: Access to the thesis is available at: - Library of Central Institute for Economic Management - Vietnam National Library, Hanoi INTRODUCTION The neccessity of research topic Over the past three decades, despite having many achievements in economic development, Vietnam’s economy has shown its challenges, and its competitiveness is weak The income of citizen is lower than those of other countries in the region On the other hand, the rapid and complicated external changes have increasingly affected Vietnam’s economy In this context, the Party and the Government have determined the orientation, policies and made efforts on enhancing Vietnam’s national competitiveness, which is reflected in documents such as: The Document of the Twelth National Congress of the Communist Party; Resolution No 05-NQ/TW of the 4th Plenum of the 12th Party Central Committee; Resolution No 39-NQ/TW of the Politburo, dated 15/1/2019; Resolution No 24/2016/QH14 of the National Assembly; Decision No 339/QD-TTg of the Prime Minister; and Resolution No 19 (2014-2018) and Resolution No 02 (2019-2020) of the Government; etc However, on the international rankings, Vietnam was placed at low position, even at the end of the rankings This presents many challenges to Vietnam’s national competitivness Therefore, the research on "Rank, challenges and solutions for enhancing Vietnam’s national competitiveness" is necessary and meaningful, especially for policy oriented works and policy making Significance of the thesis Theoretical significance: The thesis is expected to clarify the theoretical background of competitiveness on the following aspects: academic debate on the concept of competitiveness and its application in policy-oriented works; analyzing the evolution of the concept of competitiveness based on theories of economic growth; overview of theoretical frameworks of competitiveness developed by international organizations The analysis of the thesis on the theoretical framework of competitiveness, to a certain extent, can be a useful academic reference, especially for researchers Practical significance: The thesis, to a certain extent, is expected to contribute to the formation of a policy framework and solutions to enhance Vietnam’s national competitiveness This contribution is expressed through analysis, assessment and comparison of Vietnam's positions in the global competitiveness rankings; identifying challenges that inhibit Vietnam’s national competitiveness and solutions The proposed solutions in the thesis are to overcome the bottlenecks of national competitiveness These are in line with the international best practices, at the same time to be consistent with the viewpoints and reform directions of the Party, the State and continue the recent reform efforts of the Government To some extent, they are expected to strengthen resilience to external shocks, and to adapt to the rapid changes of the world economy The data and the strong evidences of bottlenecks, reasons and solutions of Vietnam’s national competitiveness, to a certain extent, can be references for policy makers, research institutions, business associations and enterprises CHAPTER OVERVIEW OF VIETNAM’S NATIONAL COMPETITIVENESS STUDIES 1.1 Overview of competitiveness studies 1.1.1 Studies of national competitiveness a Foreign studies Studies of competitiveness at the national level has attracted the attention of many international organizations and countries Regarding Vietnam’s national competitiveness, there are the following studies: - The Global Competitiveness Report with Global Competitiveness Index (GCI) published by the World Economic Forum (WEF) is the most referenced report GCI is used as a tool to measure natural endowments, macro- and micro-economic factors affecting the national competitiveness of an economy Since 2017, in the context of drastically technology changes, the WEF has adjusted its approach and used the index of GCI 4.0 instead of GCI index This report showed scores and rankings for Vietnam’s national competitiveness, which are mainly based on interviews with business executives, but these results did not show and explain the causes for those scores and rankings In ASEAN, McKinsey Consulting Company (USA) published ASEAN Competitiveness Study (2003) The study shows that many ASEAN initiatives have had limited effects, thus McKinsey recommended that the ASEAN should be a “FTA +” that includes: eliminating non-tariff barriers to services, liberalizing capital flows and allowing a greater mobility of skilled workers across the region This study placed Vietnam in the common context of ASEAN countries, without a separate analysis and specific recommendations for Vietnam Peter Lloyd and Penny Smith (2004) analyzed and looked for solutions to enhance the ASEAN competitiveness in the context of the rapid changes of the world economy and put Vietnam in the common context of ASEAN countries Similarly, Philippe Gugler and Julien Chaisse (2010) compiled a book “Competitiveness of the ASEAN Countries: Corporate and Regulatory Drivers” with emphasis on the need of enhancing national competitiveness and accordingly putting Vietnam in the context of ASEAN Therefore, the analysis of Vietnam's national competitiveness in these studies is very fuzzy b Domestic studies Regarding the domestic studies, the most referenced research on Vietnam’s national competitiveness is “Vietnam Competitiveness Report 2010” published by CIEM and ACI in 2010 Based on the analytical framework of competitiveness developed by Porter (2008), the report analyzed in details the macro- and micro-economic factors of Vietnam’s national competitiveness This report did not focus on the ranking, but describes the actual situation of Vietnam’s national competitiveness at that time On the other hand, due to the study's approach and scope, the report lacked an in-depth analysis on some important factors that are challenges and bottlenecks in Vietnam currently, such as institutions of market economy, innovation, etc Business environment – a core factor of national competitiveness- is also mentioned, but with limited analysis 1.1.2 Studies of specific factors affecting national competitiveness National competitiveness is measured by a set of factors In order to assess the competitiveness of a nation, it is necessary to review not only studies of national competitiveness, but also studies of factors affecting national competitiveness These are mainly foreign documents a Regarding business environment: The Doing Business report published the World Bank (WB) is an annual study measuring the regulations that enhance or constrain business activity The report shows the reforms as well as limitations in regulations and implementation, but comments and in-depth analysis on reasons are not profound Forbes annually publishes “The best countries for business”, grading nations on different factors of business environment The ranking of a nation, in a certain extent, demonstrates the perception and some problems of the nation’s business environment, but does not identify the reasons for such results b Regarding property rights: Property rights are an integral part of the market economy institution The index of property rights is captured in many international rankings Property Rights Alliance annually releases the International Property Rights Index (IPRI) with an affirmation that Property rights are a key ingredient for economic and social prosperity This Alliance used data of survey collected by various international organizations; which mainly show the perception of interviewees, does not clearly identify the reasons for limitations of property rights c Regarding Economic Freedom: Economic freedom is the fundamental right of every human The Index of Economic Freedom is an annual guide published by the Heritage Foundation and the Wall Street Journal The Index has measured the impact of liberty and free markets around the globe; helps to identify restrictions on freedom, but doesn't address specific causes In addition, Fraser Institute annually publishes index of Economic Freedom of the World which measures the degree to which the policies and institutions of countries are supportive of economic freedom This report also fails to show the causes of the identified limitations d Regarding State Governance: Enhancing national competitiveness requires improvements of state capability and accountability The typical studies in this aspect include: the Worldwide Governance Indicators (WGI) published by the WB measures and ranks the quality of national governance; the Corruption Perceptions Index by Transparency International reflects the level of perceptions about corruption in the public sector; etc These indexes are based on the surveys, mainly from perception of the respondents Therefore, it is not possible to explain why such results were made and the policy implications are not specific e Regarding innovation: There are a number of global rankings for this content, such as the Global Innovation Index (GII) of the World Intellectual Property Organization (WIPO); Knowledge Economy Index of the WB; etc Of which, the GII is referred quite widely Although these indexes are intended to help countries identify strengths and limitations of innovation, they not present causes and specific policy implications 1.1.3 Studies of ministerial/ provincial competitiveness Most of the studies related to ministerial/provincial competitiveness are domestic documents Currently, there are many different gradings of ministerial/provincial competitiveness For example: The Provincial Competitiveness Index (PCI) by VCCI; the Provincial Governance and Public Administration Performance Index (PAPI); the Public Administration Reform Index (PAR-Index) 1.1.4 Studies of industrial/ enterprise competitiveness a Foreign studies: International studies of industrial competitiveness that are referenced widely include the Travel and Tourism Competitiveness Index (TTCI) by the WEF; the Logistics Performance Index (LPI) by the WB; etc b Domestic studies: There are various domestic studies of industrial competitiveness Some studies assess competitiveness in the sectors of industry, agriculture, and services, but some others assess competitiveness in a specific industry such as electronics, garment, fisheries, etc These studies include UNIDO (2011); IPP and CIEM (2013); Pham M Duc et al (2013); Nguyen D Cung et al (2011); etc 1.1.5 Research gaps Although there are many domestic and foreign studies of the Vietnam’s national competitiveness and of its factors, there is still a lack of research and systematic analysis of competitiveness theories, real situation and challenges of Vietnam’s national competitiveness, especially in the context of rapid technology changes, emergence of new business models and economic integration The above studies proposed solutions that are associated with specific issues in line with the scope of those studies, but have not yet mentioned the causes of the bottlenecks hindering Vietnam’s national competitiveness In addition, the policy implications identified from the rankings are oriented solutions, but not concrete, feasible solutions With the limitations from the previous studies, this thesis is to solve the issues of Vietnam’s national competitiveness that have not been studied Specifically: (i) Review the theoretical views of competitiveness; (ii) Develop an approach of assessing Vietnam’s national competitiveness (that is a combination of various theoretical frameworks; based on international practices and adjusted to be relevant to the reality, development stage and reform orientations of Vietnam as well as capture the changes of international context); (iii) Identify challenges for Vietnam’s national competitiveness through analyzing the ranked indicators and assessing the practical situation; and identify causes of the challenges; (iv) Proposing solutions to overcome bottlenecks hindering Vietnam’s national competitiveness 1.2 Research orientation of the thesis 1.2.1 Research objectives The thesis aims to develop an analytical framework of Vietnam’s national competitiveness, to identify challenges and their causes; then propose solutions to enhance the national competitiveness Specifically: (1) Define the concept and the analyzing framework of Vietnam’s national competitiveness; (2) Identify the position of Vietnam through analyzing the global rankings; (3) Identify the factors hindering the national competitiveness, basing on assessing the indicators with low or dropped grades and through assessing practical situation; (4) Analyze the causes of challenges with a focus on the subjective causes; and (5) Analyze the new international context affecting Vietnam’s national competitiveness (the fourth industrial revolution (IR 4.0) and Free Trade Agreements) and propose solutions for enhancing competitiveness 1.2.2 Research object, scope and method of the thesis a Research objects: are the theoretical issues of competitiveness, related indicators and practical situation of Vietnam’s national competitiveness b Scope of research: Contents of research: The thesis studies national competitiveness from the theories of competitiveness, determines the position of Vietnam in the global competitiveness map and identifies its challenges from analyzing the global rankings and assessing practical situation in Vietnam The specific contents include: (1) Overview of Vietnam’s national competitiveness with a focus on analyzing GCI; (2) Business environment; (3) Institutional reform; (4) The quality of human resources; and (5) Innovation Timing scope: The thesis evaluates the real situation of Vietnam’s national competitiveness from 2011 up to now, with more emphasis from 2014 Recommendations are for the short-term (2020-2025) and for the long-term to 2030 and the following years Space cope: The thesis evaluates the real situation of Vietnam’s competitiveness at national level; compares it with those of ASEAN countries c Research method: The thesis applies various research methods (including synthesis, analysis, statistics, comparison, interpolation, extrapolation, etc.) 11 ahead of the peripheric regions; (ii) The economic policies should consider the state of development of every region; (iii) The economic policies should promote the “multiplication effects” of FDI From the endogenous growth theories, competitiveness is regarded as follow: (i) The technological and human capital improvements represent the engines of growth; (ii) Free trade is a determinant of growth and technological development; (iii) The R&D are very important The new theories of trade suggest features of competitiveness, including: (i) The labour specialisation is necessary; (ii) The investments intensify the economies of scale In addition, the concept of competitiveness can be defined from the institutional theories Accordingly, institutions contribute to productivity by facilitating businesses and directing companies’ efforts toward productive activities 2.3 The concept of competitiveness in policy related works and studies 2.3.1 Applying the competitivenss concept from productivity based view Good examples of work concerned with the competitiveness concept from productivity-based view are the Global Competitiveness Report published by the WEF; the competitiveness reports of some nations (i.e Latvia Competitiveness Report 2013, Vietnam Competitiveness Report 2010, Singapore Competitiveness report, etc.) 2.3.2 Applying the competitivenss concept from cost based view Good examples of works/studies more concerned with the concept of competitiveness from the cost-based view are Doing Business by WB, the sectoral studies by consultants (i.e Sirkin et al 2014) and the reports of the Productivity Commissions in Australia and New Zealand Remarks: The concept of competitiveness is a controversial issue Each of the concepts has validity with respect to the issue for which it 12 has been created, therefore assessing competitiveness of a nation can be applied both concepts (productivity-based view and cost-based view) 2.4 Approaches of competitiveness by international organizations 2.4.1 National competitiveness a The WEF’s approach of global competitiveness index The WEF published the Global Competitiveness Index (GCI) on the basis on adapting Porter’s theory of competitiveness from productivitybased view Accordingly, the WEF studied and benchmarked many factors underpinning national competitiveness, consisting of: (1) Natural endowments, (2) Macro-level competitiveness and (3) Micro-level competitiveness; and taking the stages of development into account by attributing higher relative weights to those pillars that are more relevant for an economy given its particular stage of development b The WEF’s approach of global competitiveness index 4.0 In the midst of rapid technological change, since 2017, the WEF has introduced the new Global Competitiveness Index 4.0 (GCI 4.0) The GCI 4.0 reflects the growing complexity of policy prioritization by weighting pillars equally rather than according to a country’s current stage of development In essence, the index offers each economy a level playing field to define its path to growth c IMD’s approach of World Competitiveness Yearbook IMD publishes annually the World Competitiveness Yearbook (WCY) According to IMD, an economy's competitiveness goes beyond measures of GDP by country and productivity because there are political, social and cultural factors that affect competitiveness For this reason, IMD groups hundreds of criteria into four fundamental dimensions or factors of competitiveness, namely: economic performance, government efficiency, business efficiency, and infrastructure 13 d European Commission’s Regional competitiveness index European Commission introduces the Regional competitiveness index (EU RCI) to measure factors of competitiveness of EU’s members The RCI is the region's capability to create an attracting and sustainable environment for businesses and people to live and work (Dijkstra et al 2011) This approach is to balance the goals of business success and citizen welfare The RCI follows the framework adopted by the WEF for its GCI The RCI is composed of 11 pillars classified into three groups: Basic, Efficiency and Innovation e Approaches to competitiveness of some nations In the world, a number of countries have also developed their own approach to annually assess their competitiveness (such as Ireland) Some other countries (i.e Mexico, Brazil, etc.) base on the available approach (mainly the productivity based view) to analyze and evaluate the factors of their competitiveness 2.4.2 Industrial/ business competitiveness At business level, competitiveness is regarded as the ability to provide products and services more efficiently and effectively than related competitors At industrial level, there are many different views on competitiveness Lall (2001) determined that industrial competitiveness means achieving relative efficiency with sustainable growth Martin, Westgren and Van Duren (1991), Fischer and Schornberg (2007) supposed that industrial competitiveness is the ability to profit and maintain sustainable market share A recent approach regards productivity as the source of industrial competitiveness (Porter 1990) 2.4.3 Competitiveness identified from specific factors (indicators) a The World Bank’s Doing Business: measures and ranks 10 indicators of doing business according to business cycle 14 b The WB’s Worldwide Governance Indicator: measures and ranks governance efficiency of nations c Index of Economic Freedom developed by the Heritage Foundation and the Wall Street Journal: assesses the government intervention in business activities d The Property Rights Alliance’s International property rights index: measures the degree of property rights protection 2.5 Selected concept and approach to Vietnam’s national competitiveness The thesis applies the concept of competitiveness from both productivity-based view and cost-based view Accordingly, national competitiveness is regarded as a set of factors contributing to social productivity; and the growth in productivity in turn determines the level of growth and prosperity of a nation The thesis combines different approaches of competitiveness to build a separate analytical framework on Vietnam’s national competitiveness Specifically: (i) Develop a pyramid-shaped analytical framework on competitiveness; (ii) Relying on a productivity-based view of competitiveness associated with development stages; (iii) consistent with the requirements of reform towards a market economy; views, priorities and reform efforts of the Party and the Government; (iv) Adapt to the impact of the international context of technology transition, new business models and Free Trade Agreements CHAPER REAL SITUATION OF VIETNAM’S NATIONAL COMPETITIVENESS 3.1 Overview of Vietnam’s national competitiveness 3.1.1 Some achievements Since the early 2000s, the Government has paid attention to enhance national competitiveness Since 2014, the Government has 15 officially chosen to improve Vietnam’s competitiveness according to international practices; recognized the ranking results on competitiveness published by prestigious international organizations to identify problems and to reform The Government's efforts are mainly focused on enabling business environment and on institutional reform Thanks to that, the score (the quality) of Vietnam’s competitiveness has been raised In the period of 2012-2017, although the GCI grades for Vietnam change unsustainably, but its scores have continuously improved The GCI rank for Vietnam in 2017 (55th) exceeded 20 levels compared to 2012 (75th) Since 2015, Vietnam's business doing scores have continuously improved; its rank in 2019 (69th) increased by 21 places compared to 2015 (90th) Vietnam's GII rank has also improved continuously (its position in 2019 increased by 29 places compared to 2014) 3.1.2 Improvements of competitiveness indicators and the impacts on productivity a Impact on productivity: Productivity (GDP/number of labors) increased in terms of both value and growth rate b Improving quality of growth: Total Factor Productivity (TFP) contributes increasingly to GDP growth The efficiency of inputs and the improvement of business environment contribute to the growth of TFP c Attracting more resources: This is reflected in the increase of the number of newly registered enterprises and increased registered capital; the number of enterprises returning to operation; etc d Improving trade balance: The trade balance has improved considerably, from a deficit of 9.8 billion USD (in 2011) to a surplus of 6.8 billion USD (in 2018) e Improving capital efficiency: A decrease in ICOR represents an increase in the efficiency of investment capital 16 f Some other positive impacts: The Purchasing Managers' Index (PMI) for Vietnam always presents an expansion, showing an optimistic business psychology 3.2 Identifying challenges for Vietnam’s competitiveness 3.2.1 Identifying challenges from the WEF’s Global competitiveness index The WEF’s GCI for the period 2006 to present shows five (05) problems that constraint Vietnam’s competitiveness Namely: (1) Institution: Challenges are reflected in the indicators of Judicial independence, Burden of regulations, Corruption, Property rights; (2) Skills: Challenges are reflected in the indicators of Quality of vocational training, Skillset of graduates, Critical thinking in teaching; (3) Product market: Challenges are reflected in the indicators of nontariff barrier (specialized inspection procedures); (4) Business dynamism: Challenges are reflected in the indicators of starting a business, Insolvency; (5) Innovation capability: Challenges are reflected in the indicators of R&D expenditures, Patent applications; etc 3.2.2 Identifying challenges of business environment Business environment is an important pillar of national competitiveness In Vietnam, although the business environment has improved, its rank is still slower than other countries in the region a Starting a business: The regulations for starting a business in Vietnam have not yet created favorable conditions for businesses The reasons include: (i) inadequate regulations on business registration; (ii) there are gaps between regulations and implementation; (iii) lack of coordination among agencies in implementation b Dealing with construction permit: This procedure is currently creating a major barrier, causing difficulties and frustrations for 17 businesses and people (the time lasts 166 days) The reasons are explained as follows: (i) The adjustments of legal documents make more difficulties; (ii) There is a gap between the regulations and the implementation; (iii) Attitude and responsibility of officers c Trading across border: This index of Vietnam stands at a low position and has continuously decreased in the last years; lags behind ASEAN High time and costs for customs clearance in Vietnam are mainly due to specialized inspection procedures, which negatively affects investment and business activities, and thus the economy’s productivity The reasons are: (i) There are many unpredictable legal documents on specialized inspection; (ii) The principles according to international practices (such as risk management, post inspection, etc.) have not been paid attention by ministries; (iii) There is a fact of adding items to the list of goods in Group 2; (iv) Scope of items under inspection is too wide; and (v) The applications of online procedures are not substantial 3.2.3 Identifying challenges of institution The theoretical schools and pactices show that a market economy institution brings more prosperity to the economy The Index of Economic Freedom measures institutional quality that represents market efficiency However, this index of Vietnam is ranked very low and considered “mostly unfree” a Property rights: According to the International property rights index 2018 published by the Property Rights Alliance, Vietnam was placed at 76th Vietnam’s Physical Property Rights Subindex was placed at 82/125, of which its registering property with score and ranking were lower than all ASEAN countries ranked in the list This is similar to the survey results conducted by the WB in Doing Business It can be argued that property rights in Vietnam have not been protected 18 The causes can be explained as follows: (i) The legal framework on property rights protection is not comprehensive; (ii) There are inadequacies in regulations and implementation of land use rights; (iii) Some regulations are not transparent, which leads to ineffective implementation or inconsistent interpretation; (iv) There are overlaps and inconsistencies between regulations; (v) The procedures of registering property are cumbersome, time consuming and costly b Enforcing contracts and Resolving insolvency: These are under the responsibility of the judiciary and have been slowly improved over the years There are many shortcomings in regulations and the judicial administrative procedures are lacking a transparency Therefore, over the past years, the indicator of Enforcing contracts decreased by 15 places; Resolving insolvency decreased 29 places (standing at the bottom of the ranking) The reasons can be explained as follows: Regarding enforcing contract: (i) The dispute resolution procedures at court are complicated, unpredictable and difficult to implement Simple proceedings for the settlement of small value cases disputes have not been implemented in practice; (ii) The mechanism for resolving disputes through arbitration is still difficult; (iii) Weak judicial administration; slow judicial reform; poor implementation; (iv) Low rate of successful judgment execution; (v) The limited capacity of judges, judicial officers, and lack of transparency in judicial status Regarding Resolving insolvency: The shortcomings of the Law on Bankruptcy and related legal documents, the inconsistencies between the laws are the major bottlenecks in resolving insolvency c The situation of legal quality in Vietnam One of the challenges for Vietnam’s national competitiveness is the institutional barrier, especially the burden of regulations This situation is explained by many reasons, for example: (i) Policies and laws 19 are unstable, untransparent and unfair, and unpredictable; (ii) Limited capacity in drafting legal documents; (iii) Policy advocacy for the interests of a small group or part of society; and (iv) There are many shortcomings in the way of making and implementing laws d The situation of corruption and informal costs in Vietnam In general, international organizations have pointed out that corruption is one of the bottlenecks for Vietnam’s national competitiveness This assessment is also consistent with VCCI's survey on PCI, where informal costs tended to decrease in the last two years, but remain high This is due to poor regulatory quality and implementation e Barrier of business conditions: In fact, business conditions are still creating a heavy barrier, leading to risks and increasing costs for investment and doing business They create room for corruption and hinder innovation 3.2.4 Challenges of human resource Industry Revolution 4.0 (IR4.0) poses requirements for high quality human resources - is a key factor of productivity growth However, Vietnam’s human resource has not been yet ready for IR4.0 The available studies and surveys indicate that high skilled labor and the quality of vocational training in Vietnam are very limited This fact is due to: (i) unreasonable structure of human resource; (ii) low curriculum quality; (iii) shortcomings in vocational training; (iv) lack of linkages between schools and businesses; and (v) prejudice about apprenticeship 3.2.5 Challenges of innovation Innovation is an unlimited driving force for growth However, Vietnam's economic growth has not relied much on knowledge, science and technology On the international rankings, Vietnam’s position on technology and innovation are still low There are many reasons, notably: 20 (i) There is a delay in changing mindset and action in creating a favorable policy environment for innovation; (ii) Investment in science, technology and R&D has not been paid adequate attention CHAPTER SOME RECOMMENDATIONS FOR ENHANCING VIETNAM’S NATIONAL COMPETITIVENESS 4.1 New context and its impact on Vietnam’s competitiveness 4.1.1 Industry Revolution 4.0 and its impacts on Vietnam’s competitiveness IR4.0 brings many breakthrough impacts to the national competitiveness, such as: (i) using less capital and reducing costs; (ii) creating new revenue sources; (iii) increasing diversity; (iv) confirming the role of technology and human resources; (v) being concerned by many nations Vietnam has the opportunity and potential to take the advantages of IR 4.0, which is demonstrated through some evidences, namely: High rate of IT users; potential market size for science and technology development and innovation; potential of non-cash payments and development of IT and communications markets 4.1.2 Free trade agreements and their impacts on Vietnam’s competitiveness In the context of international economic integration, trade facilitation is one of the priorities of economies, which is clearly recognized through joining FTAs 4.1.3 Selected solutions for reform - Solutions on enabling business environment: focus on improving doing business indicators in order to protect business freedom, reduce costs, time and risks for doing business - Solutions on institutional reform: focus on institutional reform of property rights; improving the effectiveness and efficiency in resolving 21 contract disputes and insolvency; improving policy quality and implementation; applying e-government, etc - Solutions for strenthening the quality of human resources: focus on higher education and vocational training - Solutions on innovation: encourage technology application and development; and start-ups 4.2 Some recommendations for enhancing Vietnam’s national competitiveness 4.2.1 Solutions on enabling business environment Recommendations focus on improving doing business indicators in order to protect business freedom, reduce costs, time and risks for doing business on some selected areas, i.e Starting a business; Registering for construction permit 4.2.2 Solutions on institutional reform a Protecting property rights: Completing regulations on property rights; simplifying regulations and procedures for registering property; establishing a consistent system of land information; etc b Reform of business conditions: Reviewing and evaluating the quality of business conditions; removing unnecessary, non-transparent, and unpredictable ones to protect business freedom and facilitate market entry c Judicial reform: Regarding enforcing contracts: Establishment of civil courts specializing in settling small value cases with simplified procedures; Training to strengthen the qualification of full-time judges; Applying electronic proceedings; Improving the quality of judgment execution; etc Regarding insolvency resolving: Providing information on bankruptcy cases, list of creditors on official website of courts; 22 Applyinging one-stop judicial administration; Promoting the application of electronic payment for court fees; amending the Bankruptcy Law d Improving the quality of regulations and policies: Ensuring transparency, consistency, stability and predictability of the law; Government agencies must change their mindset and management methods in accordant with requirements of development, etc e Improve effectiveness and efficiency of policy implementation: changing the state management method towards governance instead of management; applying the outcome-based assessment method in policy implementation; providing online public services; etc 4.2.3 Solutions on strengthening skills and reforming vocational training - Reform of training programs, and teaching and learning methods - Develop a linkage between schools and businesses - Promote the workforce market demand forecasting - Improving the quality of technology business incubators - Reform of the state management mechanism for vocational training in accordance with the market demand and employers' requirements 4.2.4 Solutions on promoting innovation - Reform institutions, create an enabling business environment for application of technology and innovation in enterprises - Create a policy framework promoting the development of startups - Promote international cooperation in science, technology and innovation 23 CONCLUSIONS New contributions of the thesis Theoretical contributions: The thesis is expected to clarify the theoretical background of competitiveness The thesis has clarified the academic controversies on the concept of competitiveness; analyzed the evolution of the concept of competitiveness based on theories of economic growth; presented its application in policy-oriented works; at the same time, provided an overview of theoretical frameworks of competitiveness developed by international organizations Accordingly, the thesis applies the concept of competitiveness from both productivity-based view and costbased view; combines different approaches to competitiveness to build a separate analytical framework on Vietnam’s national competitiveness Specifically: (i) Develop a pyramid-shaped analytical framework on Vietnam’s competitiveness; (ii) Relying on a productivity-based view of competitiveness associated with development stages; (iii) Be consistent with the requirements of reform towards a market economy; views, priorities and reform efforts of the Party and the Government; (iv) Adapt to the impact of the international context of technology transition, new business models and Free Trade Agreements Practical contributions: The thesis, to a certain extent, is expected to contribute to the formation of a policy framework and solutions to enhance Vietnam’s national competitiveness This contribution is expressed through analysis, assessment and comparison of Vietnam's positions in the global competitiveness rankings; identifying challenges that inhibit Vietnam’s national competitiveness and reasons Specifically: (i) Barriers to doing business; (ii) Institutional barriers; (iii) Limited quality of human resources; and (iv) Technology constraints and lack of incentive policies for innovation, technology application and development, R&D 24 The proposed solutions in the thesis are to overcome the bottlenecks of Vietnam’s national competitiveness These are in line with the international best practices; to be consistent with the viewpoints and reform directions of the Party, the State and continue the recent reform efforts of the Government To some extent, they are expected to strengthen resilience to external shocks, and adapt to the rapid changes of the world economy The proposed solutions include: enabling business environment; Improving quality of human resource; and Innovation The thesis’s limitations and suggestions for further research: Due to limited capacity and survey budget, the thesis cannot avoid the shortcomings of practical assessment Some arguments are subjective, expressing the author's own opinion This may lead to controversies from academic views On the other hand, competitiveness is a broad concept, covering many contents, so the analysis, evaluation and recommendations of the thesis may not cover all practical issues The author also recommends a number of topics for further research, specifically: (i) Conduct an in-depth study with expanding research objects to have a better overview of Vietnam's national competitiveness The research should also capture the international trends of competitiveness and propose specific and appropriate solutions; (ii) Carry out an in-depth research on the competitiveness of some industries that have a great significance on the national competitiveness, especially in the context of rapidly changing technology (such as logistics, tourism, etc.); (iii) Further research on property rights, focusing on legal review, implementation mechanisms and specific solutions; (iv) Further research on the role of judicial reform in enhancing the national competitiveness; identifying barriers to judicial reform; thereby proposing specific solutions for the judicial reform and improving the national competitiveness LIST OF PUBLISHED RESEARCH OF THE AUTHOR Nguyen Dinh Cung, Nguyen Minh Thao (2015), “Vietnam’s doing business and national competitiveness assessed by international organizations: Recommend indicators for reform”, Vietnam Economic Management Review, (65) Nguyen Minh Thao (2013), “Identifying Vietnam’s competitiveness through analyzing the World Bank’s Doing Business ranking”, Vietnam Economic Management Review, (57) Nguyen Minh Thao (2017), “Government’s Resolution No 192017/NQ-CP and expectations of public administration reform”, Economy and Forecast Review, (05) Nguyen Minh Thao (2019), “Five years of implementing the Government’s Resolution on improving business environment: Results, Issues and the following solutions”, Economy and Forecast Review, (02) ... Studies of competitiveness at the national level has attracted the attention of many international organizations and countries Regarding Vietnam’s national competitiveness, there are the following... need of enhancing national competitiveness and accordingly putting Vietnam in the context of ASEAN Therefore, the analysis of Vietnam''s national competitiveness in these studies is very fuzzy... overcome bottlenecks hindering Vietnam’s national competitiveness 1.2 Research orientation of the thesis 1.2.1 Research objectives The thesis aims to develop an analytical framework of Vietnam’s national
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