Transformation of economic growth model of thailand and malaysia after the global economic crisis and implications for Vietnam

ic growth model transformation in Thailand, Malaysia and Vietnam. 7. The structure of the thesis In addition to the Introduction, Conclusion, the thesis is structured as follows: Chapter 1: Overview of research works related to the topic of the thesis Chapter 2: Theoretical and practical basis for economic growth model and transformation of economic growth model Chapter 3: Changing economic growth models in Malaysia and Thailand after the global economic crisis 6 Chapter 4: Lessons learned from the practice of changing the model of economic growth in Malaysia and Thailand after the global economic crisis and implications for Vietnam Chapter 1 OVERVIEW OF RESEARCH WORKS RELATED TO THE TOPIC OF THE THESIS 1.1. Literature review of economic growth model and transformation of economic growth model - Foreign research situation - Domestic research situation 1.2. Literature review on changing the world economic growth model after the global economic crisis, especially in Southeast Asian countries of Thailand, Malaysia and Vietnam - Foreign studies - Domestic studies 1.3. The agreed points, gaps and research direction of the thesis 1.3.1. The agreed points - Researches on economic growth models agree that: Each country depends on specific historical conditions to select, build and develop its economy according to its own models. All similar to any country. At the same time, over each stage of development, an economic growth model has been developed and re-applied that needs to be adapted to the internal and international context of the impact. There is no "one-to-one" economic growth model for all stages of development. - Most domestic and foreign studies related to the impact of the global economic crisis agreed that: This is a crisis and recession with extremely serious impacts on most economies, from developed countries to developing countries. - Due to the impact of the global economic crisis, it is necessary to re- evaluate the economic growth models that countries are pursuing, based on 7 which they seek to adjust or reform to find a The new model is more relevant to the new domestic and international circumstances. With the current nature of deeper and deeper international integration, researching and learning from experiences of transforming economic growth models of other economies is an indispensable objective objective. With the agreed issues from the above-mentioned domestic and foreign research works, they are of reference value and selected by the PhD candidate in the course of their research. 1.3.2. The gap and research direction of the thesis Firstly, there are very few studies on transforming the economic growth model after the global economic crisis in Thailand and Malaysia. Most studies mention these two countries only as part of the study on economic growth model transformation in Southeast Asia. Domestic and foreign studies on this topic mainly focus on countries in East Asia such as Japan, Korea, and China as examples of successful economic growth model transformation after crisis. Global economic crisis. However, the PhD student said that it is necessary to focus on a deep research on the transformation of economic growth model of Thailand and Malaysia because these countries share many common cultural and geographical features. Ethnicity in Southeast Asia with Vietnam; At the same time, although their economic growth model conversion has not been successful, it will be valuable lessons for Vietnam in the economic growth model transformation. Secondly, in Vietnam, although the transformation of economic growth model after the global economic crisis is still underway, looking at the statistics of Vietnam's economic growth rate, The growth rate is still on a downward trend, the most worrying thing is that the labor productivity gap between Vietnam and other countries continues to increase. Each Vietnamese employee has a productivity of only 42.3% of Indonesia; 56.7% of the Philippines and especially 87.4% of labor productivity in Laos 8 [13]. Obviously, Vietnam's economic growth model is still not suitable for economic change. Therefore, changing the economic growth model is still an indispensable requirement of Vietnam. And the study of changing the economic growth model of Thailand and Malaysia to draw lessons from experience, implications for Vietnam is very necessary. This is also the content that the PhD student will clarify in the thesis. 1.4. Research questions and analytical framework of the thesis 1.4.1. Research questions To accomplish the research objectives, the thesis focuses on answering the following research questions: Why must economic model be transformed? What can the experience of changing the economic growth model in Malaysia and Thailand after the global economic crisis be applicable to Vietnam? What model of economic growth are we pursuing? Is the model really suitable and can be developed sustainably? How to transform the economic growth model successfully? 1.4.2. Analytical framework of the thesis Chapter 2 THEORETICAL AND PRACTICAL BASIS ON THE MODEL OF ECONOMIC GROWTH AND TRANSFORMATION OF THE ECONOMIC GROWTH MODEL 2.1.3. The speed and quality of growth in the economic growth model When studying the growth process, it is necessary to fully consider both the quantity and quality of economic growth in a close relationship with each other. Growth quality is a concept that reflects the internal content of the growth process, manifested in the means, modes, objectives and effects on the environment containing that growth process. The growth rate reflects the outside of the growth process, expressed in the extent, large number of small, fast or slow scale expansion. 9 The speed of growth and the quality of growth are two sides of a problem, interlinked. Economic growth in terms of quantity usually takes place first and is a prerequisite for promoting and improving the quality of economic growth. Improving the quality of economic growth, sustainable and efficient growth, in turn, contributes to the creation of wealth and income ... facilitating additional resources for the post-production cycle and promoting push growth in quantity. In each development stage is different and depending on the choice of different development models, the position of the quantity or quality face is set differently. 2.1.4. Elements of economic growth model From the perspective of the concept and based on the summary of economic growth theories, it is possible to identify the factors that affect growth in different ways. Opinions on the determinants and origins of economic concentration also change over time, with more and more complete and clear trends about the forces driving growth: - Can be divided into groups of economic and non-economic factors. - It is also possible to generalize the factors affecting growth in the four dimensions of an imagery. These are: (i) The dimension of the inputs, (ii) the dimensions of output, (iii) the dimension of the economy's structure and (iv) the dimension of institutions. - There is also a general view of the components of MTCT including three factors: growth motivation; inputs of economic concentration; management mechanism. 2.1.5. Some theories and models of economic growth - Classical growth theory: - The theory of economic growth by Karl Marx: - Keynesian school growth model - Neoclassical growth model - Endogenous growth model - Growth models considering non-economic factors 10 2.2. Some theoretical and practical issues about changing the model of economic growth after the global economic crisis in 2008 First: Causes of changing economic growth model - Development trend of the global economy after the crisis - Problems with the old growth model itself and new demands at home Second: The purpose of transforming economic growth model The term innovation or transformation of economic growth model in the common sense is changing the way the economy operates in a progressive manner. It is the process of establishing a common framework or common pattern of operating the economy on the basis of optimizing national resources in association with a rational, efficient and modern economic structure, in order to achieve High and sustainable economic growth. From the perspective of growth resources, the transformation (or innovation) of the economic growth model is essentially a change in the way resources are used from primarily on increasing scale to relying mainly on increase investment efficiency, increase labor productivity and total factor productivity (TFP), while ensuring the benefits of growth are distributed more reasonably and equitably across regions and population strata. [CIEM, 2012]. Thirdly, Factors affecting the economic growth model transformation Practical experience and international trends in the transformation of economic growth models Chapter 3 TRANSFORMING THE MODEL OF ECONOMIC GROWTH IN MALAYSIA AND THAILAND AFTER THE GLOBAL ECONOMIC CRISIS In this chapter, the thesis analyzes the practical transformation of economic growth models of two Southeast Asian countries, Malaysia and Thailand; clarifying the reasons for these countries' transformation of 11 economic growth models after the global economic crisis, the basic orientations for transforming economic growth models and generalizing the actual transition process. out in these countries; From there, draw some lessons for Vietnam. 3.1. Transforming the model of economic growth in Malaysia after the global economic crisis 3.1.1. Issues raised with Malaysia's economic growth model since the global economic crisis Firstly, Malaysia, despite being an advanced developing country with impressive economic growth, at the beginning of the 21st century, is also stuck in the general difficult situation of the global economy and is seeking how to get out of the middle income trap. Secondly, even before the onset of the global economic crisis, Malaysia tried to diversify its export markets to help reduce the country's economic vulnerability to external impacts. , and recently there have been policies to fully exploit the domestic market, but due to the relatively small size of the domestic market, the future of Malaysia's economy will continue to depend on the success or failure of the economy. However, some of Malaysia's main partners (such as the US, Japan, China, EU and ASEAN) have so far consumed a significant portion of Malaysia's exports. Third, with the long-term efforts of the government of former Prime Minister Mahathir Mohammed, Malaysia is considered to be the most advanced developing country in ASEAN, with the most developed infrastructure and caring human resources in all three areas of education, health and social security. However, compared with the set goals as well as the development requirements to become "Tigers in Asia", these areas in Malaysia are still considered underdeveloped, inadequate, and being major obstacles to the development of both the economy and the life of the people. Fourth, although Malaysia's politics is not wobbly and prolonged as a few neighboring ASEAN countries, the domestic political order is changing 12 rapidly and it is also one of the main drivers of the transition, changing the economic growth model of this country. 3.1.2. Some key directions in transforming the economic growth model The directions for changing Malaysia's main economic growth model are reflected in the New Economic Model (NEM), published on March 30, 2010, replacing the new economic policy (New Economic Policy - NEP); and Malaysia's 11th Plan, 2016-2020 (Rancangan Malaysia Kesebelas- RMKe-11). Transitions aimed at shifting from a race-based policy, giving preference to Malaysians to priority action policies for problem-solving, demand-driven, liberalizing the economy and eliminating gradually the deep protection and intervention of the State, in order to make Malaysia's economy more competitive, more marketable and more investor-friendly, with high growth and quality, and people have higher incomes; In order to achieve the vision to turn Malaysia into a developed and high-income country by 2020. 3.1.3. Some practical transformation after the crisis In order to implement orientations for changing the economic growth model after the global economic crisis, Malaysia has made the following major adjustments: Firstly, reform economic institutions, improve transparency; Second, adjust economic policies; Third, increase investment in developing human resources, science and technology; Fourth, accelerate the process of regional economic integration. 3.1.4. Assessment of economic growth model transformation in Malaysia Major achievements - GDP per capita growth rate shows that Malaysia's economy is in the process of strong growth; - Agricultural, industrial and service sectors have achieved significant achievements; 13 - Infrastructure construction and transportation - Investment and trade field. Outstanding issues: The Economic Transition Program (ETP) in 2009, aimed at attracting large investment in Malaysia with the aim of promoting GDP growth to over 6% per year, aims to increase the country's per capita income to the level of USD 15,000 / year since 2019, aiming to put Malaysia on the list of high-income countries in 2020. But in fact, after 5 years of implementing the conversion policy, this target only reaches about 5%, making the above goal impossible to achieve. One of the reasons why Malaysia fell into the middle-income trap is that the country has not changed development policies since the period of getting out of poverty. Income inequality in Malaysia is also an issue. Malaysia's education system is also thought to be problematic, particularly failing to meet the labor market's needs and with many limitations. 3.2. Transforming the economic growth model in Thailand after the global economic crisis 3.2.1. Issues raised with Thailand's economic growth model since the global economic crisis Firstly, for a long time, Thailand achieved rapid growth but mainly relied on capital intensity, including domestic and foreign capital. Secondly, rapid growth but low quality of human resources is one of the reasons for the low labor productivity in Thailand. Third, rapid growth creates inequality in Thailand's income distribution. Fourthly, income inequality is one of the reasons limiting the poor's access to education and health opportunities. Fifth, Thailand's financial structure is also an obstacle to long-term growth. 14 Sixth, monopoly power still exists in state-owned enterprises, and there are provisions to prohibit adequate competition in some vital economic sectors, especially in the areas of value-added services. soaring, like finance and telecommunications. Consequently, the creative dynamism of the business sector, especially small and medium-sized private enterprises, is not promoted well. Seventh, institutional weaknesses and constant political instability are the most important impediments to Thailand's long-term growth. Eighth, although Thailand has been very successful in achieving its economic concentration goals fast, increasing GDP per capita, these successes have caused the country to pay too high prices on environmental issues, such as pollution, exhaustion of natural resources and forest destruction. 3.2.2. Orientations to transform the economic growth model The implementation of the Thai Government's socio-economic development plans shows that the stages of economic development are divided into three main stages as follows: - First stage: Focus on rapid economic growth. This period extends from the First Plan to the end of the Seventh Plan (from 1961-1996) with the main strategy of exploiting resources and labor. - Second stage: Towards a full economy. This period extends from the 8th Plan to the 10th Plan (from 1997-2011). This period particularly focused on social development through human capital development, along with economic stability. - The third phase: Towards a full economy and sustainable development. This period begins with the 11th Plan (from 2012-2016), based on a harmonious combination of human capital, technology and innovation. The directions for transforming Thailand's economic growth model after the global economic crisis are integrated into Thailand's 5-year economic and social development plans, focusing on Plans 10 and 11. Plans follow the 15 King's Philosophy of "a sufficient economy", to enhance the "resilience" of the economy in addition to the conventional growth model. 3.2.3. Policies implemented - In order to improve the competitiveness from which to increase exports, Thailand has pursued a liberalization policy based on the implementation of a range of appropriate market access strategies, but focusing on only a few sectors and a number of products in each industry the country having strength. - The Thai government has consistently carried out flexible monetary and fiscal policy reforms, helping the country to overcome economic shocks. - To improve low labor productivity, the Thai Government has introduced human resource development policies, science and technology and is integrated into the country's five-year plans. - In addition, economic restructuring along the line of sustainable development has been included in Thailand's 5-year plans. - In order to resolve the development gap between regions, the Thai Government has adopted regional balance development policies by clearing the excessive concentration of economic, trade and financial activities in the region, Bangkok and some surrounding areas. - To promote the sustainable development of agriculture, Thailand has adopted a number of strategies such as: enhancing the role of individuals and organizations operating in the agricultural sector; Improve professional skills of farmers; strengthening social insurance for farmers, solving well the debt problem in agriculture; reduce risk and establish a system to ensure risks for farmers. 3.2.4. Evaluation of economic growth model transformation in Thailand Major achievements Implementing the economic growth model transformation after the effects of the global economic crisis, Thailand has achieved certain achievements: 16 Transforming the model of economic growth has helped Thailand improve its poverty status and be able to meet most of the Millennium Development Goals (MDGs). Transforming the economic growth model contributes to improving the income of households, giving them the opportunity to invest more to improve the quality of life and education. Regarding economic growth, although the period of 2014 - 2015 was delayed due to internal political instability; From 2016 to the present, the Thai economy has recovered, GDP growth rate in 2016 was 3.3% (412 billion USD), 2017 was 3.9% (455 billion USD) and Quarter I In 2018, it was 4.8%. Inflation in 2016 was 0.2%; 2017 was 0.7% and in the first 6 months of 2018 was 1.5%. The Thai economic outlook is currently well evaluated by international financial institutions, but due to the internal political situation, there are still many risk factors, so it is difficult to forecast growth in the coming time; Thailand's economic growth rate in 2018 does not exceed 3.9% and forecasts for 2019 are about 3.7%. Some economic sectors which Thailand has identified as the key include: Tourism, agriculture and fishery (rice ranked first in the world, seafood export ranked third in the world), automation and auto parts, electronics, food and agribusiness. Existing issues: Research on the practice of exchanging economic growth models shows that Thailand only achieved the target of rapid growth in a certain period and the growth rate tended to decrease, this demonstrating the unsustainability of growth. Despite these adjustments and efforts to transform the economic growth model, those adjustments have not yet adapted to the changes in the internal and external environment. The fact shows that Thailand still maintains the signs of growth model in the phase out of poverty, that is, it still uses development policies based on cheap labor and low innovation capacity. 17 3.3. Similarities in the transformation of Malaysia and Thailand's economic growth models Malaysia and Thailand pursue different economic reform and transformation programs. Each transition program has specific goals, orientations or content depending on the shortcomings of the model itself, on specific (economic, political, and social) conditions of each nation. However, also from the above analysis, we also see that behind the differences, the characteristics of each of these national programs, there are very basic similarities showing the trend of renewing the economic growth model, common practice of the world and the region. Chapter 4 LESSONS LEARNED FROM PRACTICE TRANSFORMING THE ECONOMIC GROWTH MODEL OF MALAYSIA AND THAILAND AFTER THE GLOBAL ECONOMIC CRISIS AND IMPLICATIONS FOR VIETNAM 4.1. Lessons learned from changing practices of economic growth models of Malaysia and Thailand after the global economic crisis Lesson on implementing macroeconomic policies in a timely, synchronized and effective manner Lesson on financial market stability and restoring public confidence Lesson on restructuring the economy after the crisis Lesson on deep concern about social security. 4.2. Implications for Vietnam 4.2.1. Scientific basis for identifying a new economic growth model in the post-crisis period in Vietnam - Global economic crisis and problems raised for Vietnam's economic growth - New features in the international context affecting the transformation of Vietnam's economic growth model - Issues raised for Vietnam's economic growth model after the global economic crisis 18 + Growth depends more on capital increase + Unstable macroeconomic stability + Low investment efficiency + Low labor productivity and slow increase + National competitiveness is slowly improving + The goals of institutional reform have not been given adequate attention. 4.2.2. Practical transformation of economic growth model in Vietnam from 2011 to the present - Objectives, missions of economic growth model transformation + Period from 2011 to 2015 + Period from 2016 to 2020 - Achievements in economic growth model transformation from 2011 until now + From economic growth aspect + From social aspect - Challenges to economic growth model transformation nowadays in Vietnam + From economic aspect + From economic growth connected with social development +From economic growth connected with environmental protection 4.2.3. Suggested experience for Vietnam on innovation of growth model - Perspective on growth model: Innovating growth model must grasp a thorough view, that is, economic growth must ensure sustainable and effective requirements in the long term. The above general view is concretized as follows: (i) Growth in a concentrated direction (not spread, dispersed); (ii) making the private sector a real driver of economic growth; (iii) vigorously renovate economic management institutions towards greater accountability and transparency; (iv) build industrial production capacity to become the foundation of 19 economic growth; (v) economic growth is closely linked to social progress and justice, focusing primarily on improving the well-being of the population; (vi) closely associate economic growth with ensuring environment-friendly goals and climate change adaptation. - Content of growth model Based on practice and research objectives; Based on the roadmap defined in the Socio-Economic Development Strategy of Vietnam (in this Strategy, the contents of socio-economic goals are also set until 2020 and followed by the vision to The thesis divides the implementation schedule into two phases: Phase 1 from 2011 to 2020, and phase 2 from 2021 to 2030. Specific content and proposed goals and solutions for the main economic growth model in the thesis focused on phase 2 (2021 - 2030). The growth model in this period is aimed at sustainable and effective goals for people on the basis of: (i) Focusing on capital investment and in-depth labor activities across the whole economy; (ii)