HANOI – International donors were still concerned about the problems faced by Vietnam despite the Government’s commitment to rescue the economy from the tough times and regain growth momentum in the middle term.
Prime Minister Nguyen Tan Dung said: “We will enter 2013 with strong determination and firm belief to overcome challenges, boost reform and restructuring and achieve better development results, creating a momentum for sustainable growth in the coming time.”
He was speaking at the Consultative Group (CG) Meeting for Vietnam themed “Laying the foundation for sustainable growth” held in Hanoi on Monday. The event marks the 20th year international donors have extended aids to Vietnam.
Dung added: “We do not overlook our shortcomings, weaknesses and difficulties. We are not satisfied and we will strive to obtain what we are aiming for.”
He said Vietnam had managed to maintain macroeconomic stability and restrain inflation. The country achieves an economic growth of over 5% in 2012, a year full of difficulties, thanks to “its determination and creativity”.
From an undeveloped nation in the early 1990s, Vietnam has become a middle-income country. GDP per capita has surged from US$140 in 1992 to US$1,600 in 2012.
In addition, Vietnam has basically accomplished the Millennium Development Goals (MDG).
Challenges still plentiful
However, international donors still felt worried about the problems that the country is coping with.
Victoria Kwakwa, World Bank country director for Vietnam, expressed her concern over economic growth slowdown over the past years, which indicates the economy is losing some motivations. Structural constraints have been affecting growth and competitiveness of the economy.
The current problems of Vietnam arise from State-owned enterprises, the banking system and public investment, she reiterated. If the Government did not have aggressive measures, the cost of handling these problems would be high.
“Without aggressive measures, Vietnam would likely fall into the middle-income trap with poor competitiveness and a high risk of uncertainty returning, worsening the problem of social inequality,” she warned.
Franz Jessen, head of the European Union (EU) Delegation to Vietnam, wondered why the State budget did not set aside a specific sum for restructuring or risk provision.
“We want to see transparency in restructuring. For example, it would be better if schemes for banking and SOEs restructuring were publicized,” he said.
He suggested forced land withdrawal should be open, fair and transparent and it should only serve national defense and security and community benefits.
The United Nations (UN) agencies voiced their concern over the current economic woes and declining confidence among investors, making it hard for Vietnam to create jobs in the context that there are one million new laborers every year.
Pratibha Mehta, UN resident coordinator, said the cause of the current macroeconomic uncertainty lied in the structure and was related to inefficient use of public resources, poor management and corruption.
Furthermore, poverty is becoming a more difficult problem and inequality is increasing, she stressed.
ODA pledges reach US$6.5 billion
International donors committed to provide Vietnam with nearly US$6.5 billion of official development assistance (ODA) in 2013, down US$900 million against last year.
Japan remains the biggest donor for Vietnam with an aid of US$2.6 billion for infrastructure development, poverty reduction and climate change adaptation.
South Korea announced to give Vietnam US$1.2 billion worth of loans in the next three years, in addition to the projects of Korea International Cooperation Agency (KOICA).
The EU pledged to offer Vietnam US$743.16 million of ODA. With the EU’s contributions to the Asian Development Bank (ADB), UN and the World Bank counted, the total fund that the EU will give Vietnam next year is US$965 million.
In the first 11 months of the year, Vietnam disbursed US$3.56 billion of ODA, 17% above the year’s target. By the end of 2011, the country had disbursed some US$33.4 billion of ODA, or 61% of the pledged amount.
Tu Hoang - The Saigon Times Daily
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at email@example.com. Many thanks.