Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized AUSTRALIA-WORLD BANK GROUP STRATEGIC PARTNERSHIP IN VIETNAM Vietnam 2035: From Strategy to Action Vibrant Vietnam Forging the Foundation of a High-Income Economy Main Report Public Disclosure Authorized May 2020 Table of Contents 87 Vibrant Vietnam Forging the Foundation of a High-Income Economy Main Report May 2020 @2020 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank do not guarantee the accuracy of the data included in this work. 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II Vibrant Vietnam – Forging the Foundation of a High-Income Economy Table of Contents Abbreviations ...................................................................................................................................................................................................................................................................................................................................................................... viii Acknowledgments ................................................................................................................................................................................................................................................................................................................................................. ix EXECUTIVE SUMMARY............................................................................................................................................................................................................................................................................................................................. xi Dynamic firms ..................................................................................................................................................................................................................................................................................................................................................................... xiv Efficient infrastructure .................................................................................................................................................................................................................................................................................................................................. xvii Skilled workers and opportunities for all ..................................................................................................................................................................................................................................................... xviii Green economy .............................................................................................................................................................................................................................................................................................................................................................. xx Vibrant Vietnam – Policy Matrix .......................................................................................................................................................................................................................................................................................... xxiii MAIN REPORT .................................................................................................................................................................................................................................................................................................................................................................. 1 Well begun, but half done .......................................................................................................................................................................................................................................................................................................... 2 Imperatives for renewing the growth mode ......................................................................................................................................................................................................... 4 Framing a new growth strategy: Greater accumulation with better use of all forms of capital ............................................................................................................................................................................................................................................................................................................................................................... 9 Four deep dives ................................................................................................................................................................................................................................................................................................................................. 12 Dynamic firms ................................................................................................................................................................................................................................................................................................................................................................ 19 The business landscape in Vietnam .............................................................................................................................................................................................................................................. 19 What prevents dynamic firms from becoming more productive? .............................................................................................................. 23 Recommendations: How to make firms more dynamic ........................................................................................................................................................ 25 Efficient Infrastructure .......................................................................................................................................................................................................................................................................................................................... 35 Why is improving efficiency a priority? .............................................................................................................................................................................................................................. 37 Raising new financial resources .............................................................................................................................................................................................................................................................. 41 Summary of recommendations and next steps ............................................................................................................................................................................................ 45 Skilled workers and opportunities for all ....................................................................................................................................................................................................................................... 50 Skills wanted for the future ................................................................................................................................................................................................................................................................................. 51 Barriers to human capital formation for Ethnic Minorities ................................................................................................................................................ 55 Recommendations .................................................................................................................................................................................................................................................................................................................... 58 Table of Contents III Green economy 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