Crude oil was an important factor which made a great contribution to economic growth for a long time. But things have changed.
Reports show little impact of crude oil exports on Vietnam’s export growth in the last two years. Instead, export growth now relies on electronics and mobilephone exports.
The mining industry has been declining in the last two years, especially crude oil and coal exploitation.
In 2017, Vietnam has exploited 13.28 million tons of oil, or 3 million lower than 2016, though it intends to exploit an additional 1 million tons of oil to boost GDP growth.
“It was easy in the past to exploit an additional 1-2 million tons of oil. But now it is not. The mining output in the first nine months of the year was 8 percent lower than the last year,” Hue said.
This is good news that Vietnam is now seeking new channels for economic growth with no reliance on crude oil.
Economists said this is good news that Vietnam is now seeking new channels for economic growth with no reliance on crude oil, commenting that growth not based on crude oil will be a path to sustainable development in the context of shrinking fossil-based energy and a developing tourism and service sector.
Tourism an alternative solution
Hue said it would be better to attract 1 million more travelers because the tourism sector is green and safe.
The mining industry still makes up 10 percent of GDP, which analysts say is still very high. But is more difficult to exploit oil, and export turnover depends on global market demand and prices.
SSI Research commented that in the current circumstances, Vietnam needs to restructure the economy and seek new motivation for economic growth, such as hi-tech agriculture and tourism.
A report from VNAT (Vietnam National Administration of Tourism) found that in the first nine months of the year, revenue from the tourism sector reached $16.5 billion, an increase of 26.5 percent over 2016.
Vietnam ranked sixth among the 10 fastest-growing tourism countries and it is leading in Asia in tourism development.
HSBC believes that Vietnam’s tourism has developed rapidly thanks to investment activities.
South Korea is the biggest foreign direct investor in Vietnam with capital mostly in the manufacturing sector. And Chinese businesses are now more interested in Vietnam real estate because of the government decision to allow foreigners to buy houses.