Hanoi (VNA) - It is critical to 💝improve theresilience of the Vietnamese economy to withstand and recover fromexternal shocks, e♚xperts told a conference in Hanoi on May 15.

Senior economist from the Bank for Investment and Development of Vietnam Can VanLuc spoke at the conference about economic stability and businesscompetitiveness held by the Institute for Brand and Competitiveness Strategy. Luc said that due to its small scale but high level of openness, the Vietnameseeconomy was more vulnerable than most to external shocks. From the end of 2018 to date, major risks to the growth momentum of the globaleconomy and Vietnam included trade tensions between the US and China,the slowdown of the global economy, geopolitical risk and diseases andclimate change, he said. The operation efficiency of firms was low with the return on asset ratio (ROA)averaging only 2.7 percent, Luc said, adding that the highest ROA was stilldemonstrated by foreign direct investment (FDI) companies (6.9 percent),followed by State-owned enterprises (SOEs) (2.6 percent). The lowest ROAwas among non-State firms (1.4 percent). The development of new firms has also slowed since mid-2018, Luc said. He said the equitisation process for SOEs was stagnant while therestructuring of credit institutions remained a challenge, posing athreat to economic growth. To increase the resilience of Vietnamese firms, Luc urged firms to beproactive in enhancing competitiveness by improving corporate governancecapacity and product quality, developing their business strategy andbuilding their brands and a skilled workforce. Focus should also be placed on improving the capacity for integration so thatfirms would be able to take advantage of free trade agreements. Vietnam also needed to promptly issue national strategies for Industry 4.0 andthe digital economy, Luc said. According to Tran Dinh Thien, former director of the Vietnam Institute forEconomics, Vietnam did not have many firms which could competeglobally. Thien said 65 percent of firms are still categorised asmicro. “Why do micro-sized firms account for such a large proportion? We need tofigure out the causes and solutions to boost their development,” Thien said. In the disruptive era of Industry 4.0, many Vietnamese firms struggle to find acoherent plan of action, Thien said. “If Vietnam wants to innovate and avoid being left behind, it is necessary todevelop an appropriate legal framework and take risks,” said Thien. At the conference, Deputy Chairman of the National Financial SupervisoryCommittee Ha Huy Tuan stressed the importance of economic stability in thecontext of global uncertainty and the rapid development of the digital economy. “Vietnam needs to give priority to economic stability, especially financialstability,” Tuan said, adding that the digital economy was developing rapidlybut carried a number of risks.-VNA