Illustrative image (Photo: VNA) Hanoi (VNA) – The EU-Vietnam Free Trade Agreement (EVFTA),which came into force on August 1, is hoped to create a driving force to helpVietnam reap further achievements in poverty reduction and economic growth.
A World Bank study said the EVFTA will help an additional 0.1 – 0.8million people escape poverty by 2030, equivalent to a reduction of 0.7 percentin poverty rate compared to a no-EVFTA scenario.
The gender-based income gap will be narrowed by an additional 0.15percent, with the group of 40 percent of families with lowest income benefitingthe most.
The EVFTA would bring this through creating more jobs, reducingredundant labourers and unemployment, and raise workers’ income.
With the deal, the door to a 508-million strong market worth 18 trillionUSD has opened wider than ever for Vietnamese goods.
According to the Ministry of Planning and Investment, in the short termthe EVFTA will help Vietnam’s GDP increase by 2.18 – 3.25 percent. In thecontext of the COVID-19 pandemic affecting the global economy, Vietnam would beamong the few countries with positive growth rate in all scenarios of developmentthanks to the deal, the WB said.
Vietnam’s exports to the EU are forecast to rise by 42.7 percent in thefirst five years after the deal took effect, with big increases expected forindustries of Vietnam’s strength such as farm produce (particularly rice), manufacturing-processing(textile-garment, leather-footwear) and services (maritime and aviationtransport). As a result, more jobs will become available in Vietnam.
It is noteworthy that intensive commitments in the field of investmentunder the EVFTA will drive the perfection of institutions and improvement ofinvestment and business environment in Vietnam, thus attract more EU investorsto the country who will create more jobs for domestic workers. It is estimatedthat the deal will help create 146,000 more jobs a year.
In the medium and long-term, the EVFTA will contribute to raisingdomestic revenues thanks to economic growth, at an estimated 7 trillion VND 10years after the deal took effect, which compensates for the drop inimport-export duties, projected at 2.53 trillion VND after 10 yearsimplementing the deal.
As the result, the State will have more resources for poverty reductionpolicies.
Besides the number of jobs, the EVFTA is also expected to help improveincomes of labourers through more effective operation of the market and theeffects from salary paid by FDI enterprises.
Research has proved that income inequality and the rich-poor gap isinversely proportional to average per capita income, Sate budget collection andthe ratio of exports to GDP.
The Ministry of Industry and Trade said what makes the EVFTA differentfrom other FTAs is Vietnam’s commitments to sustainable development, comprisingnot only economic commitments but also those related to gender equality, theenvironment and social development, which are important conditions for thecountry to reduce poverty in a more sustainable manner./.
A World Bank study said the EVFTA will help an additional 0.1 – 0.8million people escape poverty by 2030, equivalent to a reduction of 0.7 percentin poverty rate compared to a no-EVFTA scenario.
The gender-based income gap will be narrowed by an additional 0.15percent, with the group of 40 percent of families with lowest income benefitingthe most.
The EVFTA would bring this through creating more jobs, reducingredundant labourers and unemployment, and raise workers’ income.
With the deal, the door to a 508-million strong market worth 18 trillionUSD has opened wider than ever for Vietnamese goods.
According to the Ministry of Planning and Investment, in the short termthe EVFTA will help Vietnam’s GDP increase by 2.18 – 3.25 percent. In thecontext of the COVID-19 pandemic affecting the global economy, Vietnam would beamong the few countries with positive growth rate in all scenarios of developmentthanks to the deal, the WB said.
Vietnam’s exports to the EU are forecast to rise by 42.7 percent in thefirst five years after the deal took effect, with big increases expected forindustries of Vietnam’s strength such as farm produce (particularly rice), manufacturing-processing(textile-garment, leather-footwear) and services (maritime and aviationtransport). As a result, more jobs will become available in Vietnam.
It is noteworthy that intensive commitments in the field of investmentunder the EVFTA will drive the perfection of institutions and improvement ofinvestment and business environment in Vietnam, thus attract more EU investorsto the country who will create more jobs for domestic workers. It is estimatedthat the deal will help create 146,000 more jobs a year.
In the medium and long-term, the EVFTA will contribute to raisingdomestic revenues thanks to economic growth, at an estimated 7 trillion VND 10years after the deal took effect, which compensates for the drop inimport-export duties, projected at 2.53 trillion VND after 10 yearsimplementing the deal.
As the result, the State will have more resources for poverty reductionpolicies.
Besides the number of jobs, the EVFTA is also expected to help improveincomes of labourers through more effective operation of the market and theeffects from salary paid by FDI enterprises.
Research has proved that income inequality and the rich-poor gap isinversely proportional to average per capita income, Sate budget collection andthe ratio of exports to GDP.
The Ministry of Industry and Trade said what makes the EVFTA differentfrom other FTAs is Vietnam’s commitments to sustainable development, comprisingnot only economic commitments but also those related to gender equality, theenvironment and social development, which are important conditions for thecountry to reduce poverty in a more sustainable manner./.
VNA
