Using favourable conditions to strengthen internal capacity
As the world becomes more willing to accept higher risks to stimulate growth, Vietnam can hardly stand aside from this trend. However, unlike larger economies, Vietnam has more limited policy space, particularly given its dependence on external capital and markets.
One critical approach is to use the current favourable period to invest in long-term foundations. Revenue from exports and FDI should be prioritised for infrastructure, education, healthcare, digital transformation and human capital development, rather than being overly concentrated in short-term speculative sectors. The goal is to lift labour productivity and technological capability, strengthening the economy’s resilience when the global cycle turns.
At the same time, fiscal discipline and banking system stability must be maintained. While major economies can afford to take greater risks thanks to their scale and ability to issue debt in their own currencies, Vietnam has limited room for extreme easing experiments. Chasing cheap global capital while loosening risk controls could create serious instability down the track.
Finally, market diversification and upgrading the position of domestic firms in global value chains are essential. Reducing reliance on a small number of markets or industries and encouraging local businesses to move into higher value-added segments such as design, marketing and after-sales services, will help retain more value domestically and reduce vulnerability to external shocks.
Preparing without overreaching
The global trend of “growth first, risks later” is gaining momentum. For Vietnam, this presents both an opportunity to accelerate and a test of governance capacity and long-term vision. Failing to innovate or take calculated risks could lead to gradual stagnation. Yet embracing risks without strengthening internal foundations or building fiscal, banking and institutional safeguards could lead to even faster failure.
As the world enters a phase of risk-taking in pursuit of growth, Vietnam has a chance to move faster. But this momentum will only be sustainable if the coming years of favourable conditions are used to reinforce the foundations, rather than simply chasing short-lived waves.
Story: Dr Chu Thanh Tuan, Associate Program Manager of the Undergraduate Business Programs at RMIT Vietnam
