Promoting sustainable economic growth in the southeast region to 2030

inable development (Hoyer and Naess, 2001). Economic growth, often determined by GDP and GDP per capita, is the most effective solution to solve the problem of inequality in living conditions between countries. In other words, economic growth, in the form of income growth, is a mandatory condition for the sustainable development process (Kemp and Martens, 2007; Martens and Raza, 2010). Economic growth to achieve sustainability today needs to emphasise the factors of industrialisation and urbanisation (Ogbimi, 2007). Economic restructuring is also a content often mentioned in the research related to economic growth in general and sustainable economic growth in particular. Temin (1999) further examined the relationship between economic restructuring and economic growth by looking at changes in the flow of agricultural labor in 15 European countries in the period of 1955- 1975. The author then concluded that the economic growth rate tends to increase by 0.8% if the proportion of agricultural labor in the total workforce decreases by 20%. However, many studies also suggest that restructuring towards modernisation does not mean focusing only on high- tech modern industries and neglecting the role of agriculture and traditional industry. Research conducted by Spence et al (2010) through analysing the current state of economic development in China and Thailand had concluded that growth in agriculture is one of the important conditions for free labor to work and since the majority of the poor are mainly located in rural areas, increasing agricultural productivity has a positive impact on poverty reduction. It can be said that the process of economic restructuring has a significant contribution to economic growth and the role of the state manifests itself in making appropriate policies to ensure a smooth transition, thereby helping to keep the nation's economic growth over time (Peneder, 2001). In addition, inheriting the conception of neoclassical and 8 new economic growth theories, many studies have investigated the role of human capital in ensuring the sustainable growth in the modern economy. Altinok (2007) argued that a causal relationship exists between the quality of education and the quality of human capital. Accordingly, the improvement and perfection in education is a decisive factor for the improvement of the quality of human capital, which in turn leads to the economic equipment of each country. Besides, many issues are raised when considering the linkage between the equipment and economy on protection of the natural environment. In his paper, Solow (1991) viewed that economic growth as the only condition to eradicate poverty can have negative effects on future generations. Therefore, Solow (1993) argued that the economies of each country need to find a way to pay environmental costs for the depleting resources as an indispensable part to ensure the necessary requirements for an intergenerational sustainable development process to go smoothly. However, many economists, including Daly (1993, 1996), found that all matters in the biosphere of this world are limited in number. For that reason, the possibility of an infinite replacement of artificial capital for natural capital, as Solow (1993) noted, is not really feasible. The limited nature of natural capital, the limited capacity of artificial capital, and the increase of environmental pollution, lead to an urgent need for government intervention in order to develop strategies and policies to manage and protect these valuable energy sources. Beckerman (1992) strongly voiced his opinion to reduce the attention of global warming and the environmental issues facing countries around the world. Kula (1998) pointed out that many economic growth and development strategies in many countries today, besides opening up new industries, contribute to the renovation of urban infrastructure but also leading to unpredictable future due to environmental issues often overlooked. The study then pointed out the inadequacies of current economic development policies as one of several causes of severe environmental pollution and the problem of wasting materials in many countries. Thus, it can be seen that many growth policies sometimes lead to undesirable outcomes. Therefore, the policy of Sustainable Development and Sustainable Economic Development needs to be assessed and considered to be adaptable to the practical requirements at the time and requires each country and region to take into account the management and use these valuable natural resources as reasonably and efficiently as possible to ensure the process of sustainable economic growth. 9 1.2. Domestic research works In order to solve the problems posed by the fact that our country is still at a low development and many regions have high poverty rates, a number of scientific studies examining and assessing the reality of Vietnam's economy in the direction of sustainable development and sustainable economic growth are gradually increasing. The process of sustainable development in general and the sustainable economic growth in particular in Vietnam are still limited. Research conducted by Hoang Thi Chinh (2012) analysed the scale of sustainable economic growth of Vietnam in the period of 2001-2010 also pointed out the weaknesses of the economic growth models at that time. The quality of human resources or the quality of human capital have a strong impact on economic growth. Nguyen Xuan Dung (2008) stated that the development of Vietnam's industry, although fast in some key areas, has not shown the sustainability in improving the potential of human resources. The process of urbanisation also plays an important role and has a significant impact on the sustainable economic growth of a country or a region. However, many studies also show paradoxes and contradictions in the process of implementing urbanisation in order to promote the sustainable economic growth in our country this day. Nguyen Quang Vinh (2013) in his study showed that the level of urbanisation in Vietnam in general and the Mekong Delta in particular is still low and mainly concentrated in a few big cities, thus causing population movement from rural areas to urban areas and causing waste pollution in rural areas, thereby negatively affecting the process of socio-economic development in the rural areas of the regions. In the concept of sustainable development, one of the important issues is to find the harmony between economic growth and environmental protection (Luu Duc Hai & Nguyen Ngoc Sinh, 2001). The Law on Environmental Protection was amended and supplemented in 2005, which clearly shows Vietnam's cognitive progress on the environmental impact on the national economy. However, the lack of experience and effective management capacity from the authorities and the effort of promoting the goal of turning Vietnam into a modern industrialised country make it is very difficult to strictly implement the Law (Clausen et al., 2011, Lafferty and Hovden, 2003). Specifically, by analysing the data collected from the General Statistics Office and many related sources, Ngo Thi Thanh Truc et al. (2008) pointed out the instability and unsustainability in management and use of chemicals in agriculture in the Mekong Delta. In addition, the 10 rapid increase of industrial zones in many regions of the country and the limitation of investment resources in waste collection and treatment as well as low environmental awareness in these industrial zones have led to environmental pollution (Phuong Nhung, 2010; Le Thanh Sang, 2013). The authors in Vietnam have defined the criteria to assess the process of industrialisation and modernisation as part of determining the level of sustainable development of the country or each region. Nguyen Ke Tuan et al. (2015) in the book "Developing the country into a modern socialist- oriented country" gathered quite a number of research works of the domestic authors that propose the criteria for assessing industrialisation and modernisation of Vietnam. Other studies, such as Ngo Dang Thanh et al. (2009), proposed three basic groups of criteria, one for evaluating the economic development and the second for evaluating the social development, and the third is a group of criteria to assess the environmental development, to reflect the level of the process of industrialisation in our country. Do Quoc Sam (2009) based on data from about 20 countries that completed the industrialisation process in the 1960- 1970s and combined with other related criteria to build a basic criteria, thereby assessing the process of industrialisation in Vietnam. Inheriting the research results of the above authors, Nguyen Hong Son et al. (2014) also proposed a set of criteria including 4 criteria: criteria on income/person, criteria on restructuring, the criteria on sustainable development and some reference criteria, in order to specifically assess the level of industrialisation and modernisation of the country. It can be seen that, for international research, the above studies bring a high reference value when they have generalised the factors affecting the process of sustainable economic growth, imposing an requirement that sustainable economic growth must go hand in hand with the policise of environmental and social sustainability through a rational social management system, and approach these issues through interdisciplinary and interdisciplinary method. However, the relevant research works do not really provide clear policies and orientations for each growth period, and do not show the feasibility of methods of sustainable economic growth in each region. Most of the above studies are done with data from European and American countries with the economies quite different from Vietnam which is also a defect that is hard to ignore. An overview of domestic studies shows that these researches are often concentrated in the whole country and their approaches are at many different senses. In other words, although there are many topics on 11 sustainable economic development in recent years, not many topics focus on researching and giving specific policies related to sustainable economic development in a specific region. In addition, similar to international studies, most of the domestic researches usually focus on assessing the impact of a number of factors affecting the economic growth process without paying much attention to assess the combined effects of these factors on the country's economic growth in general and in each region’s in particular. In addition, specific methods to improve and promote the sustainable economic growth and the contents of management and control of policies to improve the sustainable economic growth at many levels have not been clearly defined. The development of criteria and indicators systems to assess the current status of sustainable economic growth at the regional level is still ignored. It should be emphasised that economic activities to promote development and growth are a continuous process not only within each country but also within each region. This shows the need for an in-depth study to comprehensively assess the process of sustainable economic growth to become an important source of documents for the suitable strategy of economic growth and development. Chapter 1 has pointed out some limitations as well as clarifying some gaps in the research related to the content of the thesis. For that reason, the thesis focus on: (i) systematising the theoretical and practical basis in assessing and reviewing the situation of regional sustainable economic growth (ii) inheriting and applying the basis of above thesis to build a system of criteria for the purpose of analysing and evaluating the regional sustainable economic growth such as Southeast region; (iii) identifying the peculiarities in the economic growth factors of the Southeast region to propose solutions suitable to its regional characteristics. CHAPTER 2 THEORETICAL ISSUES AND INTERNATIONAL EXPERIENCE ON REGIONAL SUSTAINABLE ECONOMIC GROWTH 2.1. Some concepts about regional sustainable economic growth 2.1.1. Region and economic region Although there are many different opinions around finding a common concept of region and economic region, but in general, many concepts related to regions and economic regions acknowledge that each country is a collection of many different regions and many different economic regions will constitute the economy of that country. More broadly, while region is defined as a form of physical existence limited to a defined space, the economic region is considered a movement and development space for 12 many industries, sector, is "a relatively complete economic complex with its specialisation closely associated with integrated development" (Thoi Cong Hao et al., 2002; Nguyen Tien Dung, 2009). 2.1.2. Economic growth and economic development a. Economic growth According to Nafziger (1984), economic growth is defined as an increase or decrease in output or income per capita of a nation's economy over a short period of time (usually a year) or from previous period to this period of time. This increase is reflected in the size and growth rate of income. In particular, the growth scale indicates the degree of increase of the economy, while the growth rate is used to relatively compare and reflect the rapid or slow increase between two periods or more. b. Economic development According to Nafziger (1984), economic development is economic growth accompanied by changes in output distribution and economic structure. Thus, economic development reflects all changes in economic, social, political, natural environment. In other words, economic development includes the growth process, the process of economic restructuring (towards reducing the proportion of agriculture and increasing the proportion of industry and services in the economy) and changing better in the context of society (increasing life expectancy, reducing inequality in society...). 2.1.3. Sustainable Development In 1987, in the Brundtland report titled "Our Common Future", the World Commission of Environment and Development (WCED) proposed for the first time an official definition of sustainable development as “a development that satisfies the demand of this generation but not compromises the ability to satisfy the needs of future generations...” (WCED, 1987: 43). In Vietnam, the Vietnamese Agenda 21 signed by the Prime Minister has clearly defined the sustainable development strategy is to “achieve material adequacy, spiritual and cultural wealth, the equality of citizens and the consensus of society, the harmony between human and nature; development must combine closely, reasonably and harmoniously the three sides: economic development, social development and environmental protection” (Prime Minister, 2004: 21). The 11th and 12th Party Congress established the socio-economic strategy for the 10-year period from 2011 to 2020 with many important contents associated with sustainable development, including “sustainable development is the basis 13 for rapid development to create resources for sustainable development. Rapid development and sustainable development must always be closely linked in the socio-economic development plans and policies” (Communist Party of Vietnam, 2011: 9). 2.1.4. Sustainable economic growth According to Tran Binh Trong (2003: 309), sustainable economic growth is “economic growth reaches a relatively high and stable level in a relatively long time (usually a generation of 20-30 years)”. In addition, based on the concept of sustainable development and the concept of economic growth, it can be generalised that economic growth in the direction of sustainability or sustainable economic growth is to maintain the stability of economic growth in the long run in order to meet the needs of current generation while maintaining natural resources and the environment for future generations. 2.2. Models of regional sustainable economic growth and system of evaluation criteria 2.2.1. Models of sustainable economic growth 2.2.1.1. From economic perspective According to Daly (1989), there are currently two most popular models, the weak econmoc growth model and the strong economic growth model. 2.2.1.2. From environmental perspective According to this approach, there are 4 models of economic growth, including: a. Traditional economic growth model b. Model of economic growth through remediation of pollution and environmental restoration c. Model of economic growth through control of environmental pollution d. Model of green economic growth 2.2.2. System of evaluation criteria and methods for assessing regional sustainable economic growth The thesis has been based on the system of basic criteria related to the system of monitoring and evaluating indicators for sustainable development of Vietnam in the period of 2011-2020, the criteria system of stone for regional sustainable development of Vietnam in the period of 2011-2020, together with inheriting the criteria for evaluating a new growth model as announced by APEC leaders (2013) to structure the system of criteria for regional sustainable economic growth. This is also the basis for assessing the current situation of sustainable economic growth 14 in the Southeast region in the period of 2008-2017, including: 5 components with 15 components divided into 48 main indicators. In addition, based on the criteria system to assess the sustainability of economic growth of the region mentioned above, due to the fact that it is difficult to collect all data of indicators. The thesis also propose a criteria system of 14 indicators which have the most complete data source from 2008 to 2017 to determine the sustainable level of economic growth of the Southeast region in the period of 2008-2017. 2.3. Factors affecting regional sustainable economic growth 2.3.1. Natural and socio-economic factors in the region Including: (1) Natural conditions such as geographical location, topography, climate, (2) Land resources, natural resources, (3) Human resources, (4) Capital resources, (5) Science and technology. 2.3.2. Domestic institutional factors Institutional factors including economic environment, political environment, legal environment, and enacted and implemented policies directly and indirectly affect the formation of complete and modern economic structure. They create favorable conditions to promote the strength of industries and fields of the economy as well as support the goals of sustainable development at the national and regional levels. 2.3.3. International factors and conditions 2.4. Experience on regional sustainable economic growth of some countries and lessons for Vietnam in sustainable economic growth in the Southeast region 2.4.1. Experience of regional sustainable economic of some countries in the world 2.4.1.1. Experience of regional sustainable economic of countries in Asia a. Experience from central Thailand b. Experience from Western China 2.4.1.2. Experience of regional sustainable economic of countries in Europe Experience from Schleswig-Holstein state, Federal Republic of Germany 2.4.2. Some lessons from foreign experiences for regional sustainable economic growth in the Southeast region Firstly, it is necessary to focus on developing and persisting in building highly productive industries but still showing the characteristics of the region, thereby forming key economic industries and growth poles 15 to creating spillover effects to promote other industries to develop together. Secondly, it is necessary to make full use of the natural geographic strengths to support the process of economic growth. Third, economic development and growth strategies need to have a solid roadmap, goals and specific targets, in which the integration of development strategies and plans for each sector and industry as well as the participation of localities in the region are extremely necessary. Fourthly, it is necessary to have the support and cooperation between the state, local governments and local businesses to successfully implement the economic growth strategy. Fifth, the experience of Schleswig-Holstein (Germany) shows the urgency of mobilising and building a separate budget and financial mechanism, a development fund for the Southeast region. Sixthly, the implementation of regional sustainable economic growth must go hand in hand with environmental protection, combining economic growth with environmental protection in order to build a clean, modern and beautiful living environment for the people of the country in general and of each region in particular. CHAPTER 3 CURRENT SITUATION OF SUSTAINABLE ECONOMIC GROWTH IN THE SOUTHEAST REGION 3.1. An overview of the factors affecting the sustainable economic growth in the Southeast region 3.1.1. Economic factors in the region 3.1.1.1. Natural condition a. Geographical location Southeast region is one of two regions located in the South of Vietnam next to Southwest region. The Southeast region includes 5 provinces: Dong Nai (DN), Binh Duong (BD), Ba Ria - Vung Tau (BR- VT), Tay Ninh (TN), Binh Phuoc (BP) and Ho Chi Minh City. The Southeast region possesses a favorable geographical position, abundant resources and potentials in many aspects, and has great advantages to expand the economic exchange and cooperation with other regions in the country and in the world. b. Land and climate conditions The Southeast region has relatively flat terrain with diverse soil structure. In particular, faded gray soil occupies the largest area of Southeast region, followed by brown feralite red soil on basalt. In addition, 16 the Southeast region also possesses relatively harmonious climate conditions and is less affected by natural disasters. However, the region is still affected by drought due to the dry season lasting from 5 to 6 months, making it difficult for producting and living at that time of year. c. Natural resources The Southeast region possesses many kinds of mineral resources, abundant water resources and tourism resources. 3.1.1.2. Investment capital for socio-economic growth and development The Southeast region is able to attract a lot of domestic and international investment capital. This creates a great force for the process of production development thereby promoting general growth and economic growth in the region in general and in each region in particular. 3.2.1.3. Human resources - labor The Southeast region has a high population growth rate. In addition, the trend of labor restructuring from agricultural group to non-agricultural groups is taking place stably. However, unskilled labor is still the main source of the region. 3.1.2. Impact of domestic institutions The Southeast region has always been strongly supported by the Government through many guidelines and policies. In general, the national and regional policy institutions have been reviewed and re-evaluated as well as have many innovative adjustments to be more detailed, clear and practical throughout the years. This shows the Government's determination to create the best possible conditions for the Southeast region to implement innovation, build and deploy strong and specific strategic goals to create the sustainability and growth quality of the region. However, the implementation of issued policies is still an issue that needs to be considered. The fierce competition among localities to attract investment leads to the trend of omitting or mitigating discipline and sanctions for violations. The synchronous coordination among localities, especially in bringing together to solve existing issues that may affect the sustainable development of the Southeast region, has not been implemented smoothly. 3.1.3. Impact from international conditions The Southeast region attracts a lot of foreign investment capital and receives new technology as well as is advantageous in exporting commodity products. However, the region also faces strong competition from other countries’ goods after joining trade agreements. In addition, 17 although the region attracts a lot of FDI capital, it is still based on the "static