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Young
people take part in a march on November 2, 2013 to welcome the 90 millionth
citizen of
A Vietnamese professor at a Japanese university has warned that
Prof Tran Van Tho, of This is a plausible scenario if the country fails to take advantage of the precious period in which the number of working-age people reaches its maximum, Prof Tho said. Changes in the population structure of a country usually come in four stages, he added. In the first one, both birth and death rates are high, so the population does not expand, or may increase only very slowly. In the next, death rates tend to decline, while birth ratios continue to rise, leading to a rapid rise in the population. This stage is characterized by a very high proportion of young people, often under 15. In the third stage, birth rates shrink and the population goes up slightly. Those who were born in stage 2 now become the workforce.
Working-age people reach their peak number in this phase,
while the portion of dependants is small, as young people (0-14 years old)
occupy a limited share in the population structure and the number of elderly
people (over 65 years of age) is not yet high.
This is an ideal period for economic growth, so it is called a “demographic
gift,” “demographic bonus,” or “demographic devidend.”
In the last stage, the demographic bonus period ends and the population
begins aging, with the propotion of the elderly soaring and a gradual
decrease in the number of working-age people.
A welfare burden also comes into being in this stage, because the size of the
dependant group grows, the scholar noted.
A proper way to move a country forward would therefore be preparing all the
necessary conditions for strong development in stage 3, he suggested.
Such conditions include universal basic education, infrastructure
development, and an effective legal framework.
Full employment should be carried out at this point, Prof Tho advised,
elaborating that all available labor resources should be used in the most
efficient way possible.
The above term represents the highest amount of skilled and unskilled labor
that could be employed within an economy at any given time.
The third stage, informally known as the “golden population” period in
The academic said that it is advisable for a country to promote education,
advance science and technology in order to maximize productivity, and
re-align economic structures to maintain growth before it enters stage 4,
when the population ages.
“Golden population” period
will end very soon
The United Nations has forecast that its population will rise to 100 million
by 2030, and 105 million ten years later, before it plunges.
The country’s working-age population began to rise around 1970, when its
proportion was 51 percent. The rate is expected to surge to 71 percent in
2020.
Similarly, the number of dependants started dropping in 1970, and is
predicted to drop to the minimun in 2020, prior to an expected rise again in
the middle of that year.
So
Most of the period, however, has already elapsed, with the country failing to
make the best use of it for economic growth, partly because of the war during
1970-1975, while the “Doi Moi” (Renovation) policy was not adopted until ten
years later.
In the first ten years of Doi Moi – a set of reforms implemented to
spur the Vietnamese economy initiated in 1986 – apart from resuming
agricultural production, the country simply embarked on the building of
foundations for a market economy and international integration, the expert
pointed out.
Between 1995 and 2005, the Vietnamese economy grew 7-8 percent a year, still
lower than the 9-10 percent average of other Asian countries in their
respective demographic dividend periods.
The time gap between Vietnam’s demographic dividend period and those of
China, South Korea and Thailand is not too wide – about 10 years (see Table
1), but the issue here is that the development level of Vietnam in its
“golden population” period is lower than that of each of the other three
countries during their own periods.
As shown in Table 2, Vietnam’s GDP per capita estimated in the year when its
demographic dividend period ends is also far below that of Japan, China,
South Korea and Thailand when their corresponding phases conclude.
Risks & solutions
Thus it is facing a great challenge: its population will have already aged, while it has yet to reach the expected level of development. Overcoming this challenge requires massive efforts from those who are supposed to be responsible for the country’s socio-economic growth. The only way now is to reform institutions comprehensively to better mobilize resources like capital, land and labor, and effectively use them to speed up sustainable development. The country should rapidly and thoroughly implement the policies of reforming and restructuring its growth model, state-owned enterprises, and the banking system. Three other important issues must be addressed at the same time, including land ownership and agricultural and rural development; corruption; and the quality of education, science and technology. Prof Tho remarked that It will become a powerful country if good institutions and a sound development strategy are both put in place, he said.
TUOITRENEWS
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Reporter: What is your assessment of the property market in 2013?
Nam: Over the past year, the real estate market has increased social and commercial housing supply in line with low income earning buyer demands.
Several real estate projects were altered to social housing developments to provide housing for poor people and alleviate market strain.
The country’s 124 social housing projects currently contain more than 78,700 apartments. Eighty-five were tailored to low income earners, the equivalent of 51,900 apartments, while another 39 (27,000 apartments) will be made available to workers in industrial zones. Total investment exceeded US$1.69 billion.
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| Deputy Construction Minister Nguyen Tran Nam |
Authorities proposed converting 57 commercial projects into social housing, providing an additional 34,837 apartments with VND20.567 trillion in investment.
Real estate market transactions gradually increased as 2013 drew to a close, especially in small scale apartments sold at modest prices.
As of late 2013, the total value of housing inventories was estimated at VND 94,458 billion. Value had fallen 26.5 percent from the first quarter of the same year.
But rising registration taxes and higher real estate credit growth also point towards a late 2013 rebound.
Incomplete housing projects proceeded to sale, consolidating customer trust in the market’s recovery. The recovery can be credited to the Government’s national housing development strategy and urban planning.
Reporter: What were the practical effects of the Government’s real estate market solutions?
Nam: Government’s Resolution 02 covers mechanisms and polices to control the property market in major cities like Hanoi and HCM City.
Hanoi has reviewed 15 project proposals for increasing the number of apartments from 5,478 to 10,587. Another 10 HCM City projects submitted proposals to increase the number of apartments from 4,655 to 9,052.
Demand-supply imbalances are a major market weakness.
The Ministry of Construction is currently guiding localities and investors through real estate restructuring.
The Government’s Decree No 188/2013, on the development and management of social housing, aims to increase social housing supply and regulate the property market.
Entering into effect on January 10, the decree exempts social housing projects from land use taxes.
Investors would enjoy additional benefits such as reductions or exemptions from, value-added and corporate taxes.
Enterprises joining the projects could apply for loans from credit institutions.
The decree stipulates commercial banks and credit institutions are responsible for reserving at least 3 percent of their total debt balance for social housing projects and offering assistance to low income earners at lower interest than market rates.
The State budget would support investors through land clearance and infrastructure upgrades.
Investors are allowed to issue Government-guaranteed bonds when arranging capital for their projects.
Further, the purchase of social housing will be transferred after 5 years of use, from the time of signing the contract with the investors.
In the last two weeks of 2013, VND170 billion of a VND30 trillion property market stimulus package was disbursed in the form of soft loans to home buyers and property developers.
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The State Bank of Vietnam (SBV) committed VND 1.75 trillion in loans to 13 businesses and 1,764 home buyers by the end of 2013.
Commercial banks loaned VND304 billion to seven enterprises and 1,750 individuals.
Reporter: What will the Ministry of Construction do to alleviate the real estate market’s difficulties?
Nam: The Ministry will continue to work hand in hand with localities harbouring major real estate business projects to monitor the implementation of underway urban and housing developments and align new projects and local housing priorities.
Market complexities will force greater State and interested party effort to facilitate business activities, stimulate economic growth, and protect social security.
Urban and housing development regulations must be fine-tuned to ensure property market stability and balanced supply and demand.
The approach to easing property market problems should reflect the Prime Minister’s housing development strategy through 2020. The strategy rests upon providing quality housing at minimal prices and is especially focused on poor and low income households.
Housing programmes need to consider the special requirements of rural areas, those credited with revolutionary service, and the isolated elderly.
Reporter: What is your prediction for the real estate market in 2014?
Nam: Judging from the market changes seen in 2013, the property market will remain relatively stable.
Real estate will focus on supplying small and medium-sized apartments to meet buyers’ demands.
