There are currently around 30 banks in Vietnam, but overseas Vietnamese experts believe half that number will be better for the economy.

Overseas Vietnamese who are scientists, experts, and intellectuals from the U.S., France, and Japan discussed ways to improve Vietnam’s competitiveness in the global economy at a forum in Hanoi on Sunday.

The banking system restructuring and personnel development topped the agenda at the event, held by the Ministry of Foreign Affairs, the Party Central Committee’s Economic Commission, and the State Committee for Overseas Vietnamese Affairs.

Nguyen Tri Hieu, a U.S. banking and finance expert, said many foreign banks will bring fiercer competition to the Vietnamese banking industry in the future, and Vietnam must seriously handle the bad debt issue to avoid a shock caused by such a ‘strong attack.’

“The number of banks in Vietnam should be reduced to around 15, instead of some 30 currently,” Hieu recommended.

The leading banks of the sector must have a minimum equity of US$5 billion each to be able to operate and compete in Southeast Asia, he added.

The idea of cutting the number of Vietnamese banks was echoed by Professor Nguyen Duc Khuong, chairman of the Paris-based Association of Vietnamese Scientists and Experts.

“The banking market needs fewer, but stronger, banks to be able to deal with risks and internal shocks of the economy,” Khuong told reporters on the sidelines of the forum.

Professor Vo Dai Luoc, an economic expert, has another concern.

“Vietnam has signed as many as ten free trade agreements with different countries but its competitiveness is very weak,” he said.

“Speaking of lending interest rates alone, it is impossible for Vietnam to compete with other countries.”

Lending rates in Vietnam now range from eight to nine percent a year, whereas the interest in other countries is only 1-2 percent, or even below one percent, he elaborated.

The forum also focused on how to improve the competitiveness of Vietnamese human resources in the coming years.

Dr. Tran Hai Linh, from South Korea’s Chonbuk National University, believes Vietnam can learn from the East Asian country to restructure its higher education system to boost technological advancement and economic development.

“Higher education is the key impulse behind the development of an economy,” he told the forum.

Dr. Linh said South Korea’s recipe for success will be helpful for Vietnam as the two countries have many things in common.

Vietnamese colleges and universities must have the right of autonomy toward its enrollment, training, and research programs, he said.

These education institutions should also seek to attract overseas Vietnamese to return to Vietnam to teach and conduct research.

“Many Vietnamese intellectuals and scientists living overseas want to return home to contribute but they lack information on how to connect with education institutions,” he elaborated.

Professor Ngo Bao Chau, the first-ever Vietnamese to win the Fields Medal, joined the discussion with a video sent to the forum, in which he underlined that the problem of Vietnam’s education lies in higher education, rather than high school.

The renowned mathematician said Vietnam should learn from the university models of developed countries and grant autonomy to its higher education institutions.

Vuong Dinh Hue, head of the Party Central Committee’s Economic Commission, spoke highly of the recommendations and suggestions by the overseas Vietnamese pundits, saying they “pointed out what is challenging Vietnam’s economy.”

The insights shared at the forum will be of great reference for the government in preparing policies for the country’s eco-social development, Hue said.

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