Infrastructure for urban and industrial zones and universities need to be planned in a more co-ordinated manner at regional levels, says the former director of the Institute for World Economics and Politics, Vo Dai Luoc.

Workers of Hanoi Clean Water Company bottle pure water. Public investment needed to be focused in areas which offer economic advantages and strong potential to generate returns. — VNA/VNS Photo Bui Tuong

Speaking at a workshop on restructuring public investment held in Hanoi yesterday, Luoc also said that more public investment needed to be focused in areas which offer economic advantages and strong potential to generate returns.

For example, the Hanoi-Hai Phong and HCM City-Vung Tau economic corridors continue to lack good highway and express rail connections even though 80 per cent of the country's total industrial productivity travels through them.

"Vietnamese economic zones have not seen regional planning but a patchwork of planning by localities," he said.

The Government needed to bring its laws on public spending up to international standards and norms, as well as revise its laws on tendering, construction, State budget, land use rights and corruption, he added.

Vietnam Institute of Economics director Tran Dinh Thien agreed, saying that restructuring the economy meant restructuring sectors, regions and institutions with the primary target of changing resource distribution.

Vietnam has had opportunities and a huge potential to develop since joining the WTO, yet the economy's development has been imbalanced, falling into high inflation and instability, Thien said.

"Years of inflation have exposed the shortcomings in our economic growth model and in the structure of our economy," he said.

"A new growth model would help the economy avoid the average income trap and ensure Vietnamese businesses effectively participate in the global value chain," he added, suggesting the new model be based on the pillars of high technology, skilled labour and international associations.

But, Thien said, the focus should not be on resolving short-term instability. The country should "resolve short-term issues on the basis of restructuring."

Vietnam, with a GDP of USD130 billion, had over 100 banks, hundreds of financial and stock companies, 100 seaports, 18 economic zones, 30 border economic zones, 280 industrial zones and 650 industrial clusters, as well as 233 universities and colleges all formed in the past 10 years, he noted.

He said that, by any standard, the distribution of resources suggested enormous amounts of duplication and waste.

Vu Tuan Anh from the Vietnam Institute of Economics urged a reduction in taxes to create a favourable environment for businesses to overcome the economic downturn, expand production and improve competitiveness.