PM Nguyen Tan Dung has sent a New Year message emphasising the central
tasks of 2013, which include institutional improvement, combination of monetary
and fiscal policies, support for businesses, administrative reform, economic
restructuring, and guarantee of social welfare.
The year of 2012 was full of
difficulties and challenges. However, enduring, combined efforts made by the
whole Party, army, people and the entire political system brought us positive
achievements: the macro-economy was improved somewhat, inflation was kept at a
low rate of 6.81 per cent (compared to 18.13 per cent in 2011); export turnover
increased by over 18 per cent; foreign exchange reserve hit a record high, the exchange
rate was stabilised and the trust in Vietnamese currency improved. In the
context of global economic downturn, Vietnam’s GDP still grew over 5 per cent.
Cultural and social affairs made progress; social welfare and security were
guaranteed. National defense, security and diplomatic work gained many
achievements. Political and social stability was maintained. Generally,
development policies proved to be on track.
The above mentioned gains cannot
steer the country away from physical difficulties and challenges visibly seen
in 2013 as the world economic recovery remains at a slow pace and our major
export and investment markets have yet escaped from economic recession. Policy
adjustments undertaken by big economies in the world have not brought about
desired results with risks and instability remaining high. Potential external
shocks are still lingering somewhere, likely leaving negative impacts on our
national economy.
Internal weaknesses found in
economic structure and growth model are dealt with slowly. The process of
restructuring is just at an initial stage and likely to encounter many
difficulties. Bad debts are increasing quickly, inventories remain stagnantly big,
and high lending interest rates are yet covered by enterprises’ profit-making
capacity. State management is coping with weaknesses. A proportion of civil
servants have yet displayed a sense of responsibility, proficiency, and virtue
they were required to have. Corruption and waste are still serious. All of
these weaknesses are reflected in the national economic and social life. The
macro-economy is yet stable and inflation hike is likely to rebound. The
national economy has not regained its growth momentum. Production, business and
job generation are facing extreme impediments; enterprises are experiencing
declining resources and people are dealing with shrinking incomes. Market
confidence is low. Meanwhile, we are regularly challenged by conspiracies to
spark socio-political instability and violate our national sovereignty and
territorial integrity.
In such a context, to fulfill the
overall targets set for 2013, it is necessary for the entire Party, army,
people and the whole political apparatus to make greater efforts in realising
uniform solutions that we have set forth, focusing on the following tasks:
1. Improving the quality of
institutions and policy response capacity in order to build up market
confidence
Institutions are the most
important element to effectively distribute and utilise all resources,
stabilise the macro-economy and achieve a sustainable growth. High-quality
institutions, coupled with simple, open and transparent administrative
procedures and a high sense of responsibility, will forge a favourable
environment for investment and business activities, preventing corruption and
prodigality and significantly contributing to the improvement of the economy’s
aggregate competitiveness. This is also a condition to restructure the economy
and convert the model of growth towards efficiency. To have proficient
institutions and policies, we should strictly observe the Party’s viewpoints of
building a socialist-orientated market economy taking into account development
needs and people’s interests. Policies without clear-cut execution and
supervision methods will not be issued.
Real social efficiency must be
calculated to avoid the situation in which the cost for executing a policy is
bigger than the development benefits it brings.
In the era of deeper and wider
globalisation and international integration, every fluctuation occurred in the
world market, especially in a time when the globe is having unpredictable
mishaps, will speedily and strongly affect the national economy. This requires
us to make quick and proper policy response. In the past years, our response
has not always been prompt. In some cases, we cannot help either seize
opportunities or mitigate external negative impacts, but create new shocks. To
deal with this situation, a firm institutional foundation and a proper economic
structure and effective model of growth are needed.
However, no institution can
handle all economic phenomena, particularly in the current period full of
changes. To have a good policy response, it is important to observe economic
laws, improve forecasting capacity, and fully calculate market reactions and
possible consequences. The promulgation or adjustment of a policy must not
cause big changes and negative impacts on people’s life and enterprises’
operations.
2. Regulating monetary policy in
accordance with market realities and inflation targeting. Closely combining
monetary and fiscal policies
Given the limited State budget
and the narrow-space of fiscal policy, monetary policy plays a vital role in
curbing inflation and promoting growth. Based on the principle of maintaining a
tight monetary policy, interest rates must be regulated flexibly at levels
relevant to inflation targeting. Drastic direction is required to handle
non-performing loans to unfreeze capital flow for the national economy. The
State Bank of Vietnam (SBV) is tasked to effectively use open market tools to
lower lending rates and ensure reasonable credit growth; to strictly manage and
supervise operations of credit organizations. The SBV is also asked to reduce
administrative measures in regulating the monetary market.
In the context of total demand
shrinking, the settlement of bad debts taking time and credit growth likely
being low in the first months of the year, fiscal policy plays a decisive role
in creating a demand for the economy. It is necessary to quickly implement
planned investment projects in a bid to increase total demand to stimulate the
economy, thus making pervasive effects on businesses’ operations. During the
implementation process, it is required to closely integrate fiscal and monetary
policies to accommodate total demand, reduce inflation and obtain a growth that
is higher than that of 2012.
3. Removing difficulties against
production and business and supporting the market
It is required to attach
significant importance to demand-created measures while unfreezing supply
sources, to steer the priorities of monetary and fiscal policies to subjects
and sectors having high rates of demand growth. They include agriculture,
farmers, rural areas, export market expansion, infrastructure development,
social housing and dormitories for students. This is also a solution to help
improve the living conditions of people and low-income groups.
Within the approved state budget
overspending limits, more resources should be sought to raise total demand and
support the market; tax measures should be early introduced to ease
difficulties against enterprises. More credits with longer terms and lower
interest rates should be offered to those who want to buy residential houses so
as to reduce real estate inventories. Proper assistance, including debt
rescheduling, should be adopted for enterprises with temporary difficulties.
New mechanism providing credit guarantee to small and medium-size enterprises
will be promulgated. The campaign Vietnamese people prioritise using
Vietnamese products should continue. Smuggling and import
of commodities which fail to meet technical standards, hygiene, safety and
preventive requirements must be resolutely stopped.
It should be noted that measures
and policies are important and supportive, but the activeness of enterprises is
decisive. Enterprises should know how to convert difficulties into
opportunities to speed up their restructuring process in order to raise their
competitive capacity and take up market share. They should seek ways to reduce
costs as much as they can, effectively utilise resources they have, lower
prices to quickly clear inventories, and actively deploy measures to expand
domestic and foreign markets.
4. Accelerating administrative
procedures reform, upholding the responsibility of officials and state
employees in performing public assignments
Good institutions and policies
are important but not enough. As institutions and policies are executed by
means of administrative procedures together with a contingent of officials and
state employees, there are wrongful doings. Unnecessary procedures must be
resolutely eliminated; disciplines, rules and responsibilities of officials and
state employees in performing public assignments, harassing activities must be
seriously punished. One-stop-shop mechanism must be expanded to all districts.
State agencies must publicise administrative procedures and processing time
must be specified so that citizens and businesses can notice improvements in
the field. Officials and state employees must clearly understand that in public
assignment relations, they are responsible for implementing duties and serving
citizens who have the right of subject.
Ministries, sectors and localities
must closely supervise their officials and employees. The examination of
administrative procedures streamlining will be enhanced at all levels and
local-level administrative reform index will be made public. The National
Assembly, People’s Councils, Vietnam Fatherland Front, and people are asked to
enhance supervision over administrative procedures reform and responsibilities
of officials and state employees in implementing public assignments while
demanding for enhanced accountability on administrative procedures reform,
attitude and responsibilities of officials and state employees in performing
public duties.
5. Stepping up economic
restructuring process
It is required to quickly
restructure credit organisations in combination with the settlement of non-performing
loans. They are the two reciprocal and intertwined processes. Dealing with
non-performing loans must be done in various ways in different credit
organisations and at the national level. If this complicated issue is not
deployed immediately, bad debts will rise making it harder for the settlement,
and the economy will become sluggish. We cannot see all angles of an issue at
once, so the necessity now is to have right orientations to follow and only by
acting drastically can we see through all possibilities and select best
solutions.
Of the three pillars of economic
restructuring from now till 2015, restructuring state-owned enterprises (SOEs)
plays a special role. This is the main axis for restructuring the whole economy
not only because SOEs are consuming big resources with low efficiency but they
are also key stakeholders in investment. SOEs are also accounting for a high
ratio in the economy’s total credits and owing commercial banks a high amount
of bad debts. SOEs reform will also create a breakthrough in creating an equal
competition among economic sectors, contributing to the improvement of the
institution of socialist-oriented market economy. State groups and corporations
must steer resources to their core business lines in order to fruitfully
realize the country’s industrial policies, push up the process of modernisation
and industrialisation, and support the development of the private sector.
Transparency must be secured in SOEs’ operations. Mechanism on exercising
representative functions of State ownership at SOEs will continue to be
perfected and supervision over SOEs’ operation will be strengthened.
6. Ensuring social security and
social welfare
Over the past years, the Party
and State have poured due investments in ensuring social security and social
welfare. In the face of economic hardship, this area needs further attention,
particularly for vulnerable groups. In 2013, it is required to boost poverty
reduction, especially for ethnic people.
Assistance will be provided to
people who live just above the poverty line and those who have got rid of
poverty to help them achieve sustainable poverty reduction. A part from
Programme 30a (programme to support poverty reduction in 62 poorest districts),
the government has decided on a number of new policies for 23 districts with a
high poverty rate. It attaches importance to socio-economic development in
resettlement regions to ensure that people there have better life, considering
it important criteria to evaluate the overall efficiency of an investment
project attached to land recovery and resettlement.
Priority will be continuously
given to people who render services to the nation, making sure that they have a
living standard that is not lower than the average level in the same
residential areas.
While focusing on the above
missions, we need to fulfill our tasks in other fields successfully, especially
security, national defense, social order and safety, national sovereignty, and
improvement of Vietnam’s prestige on the international arena.
Promoting the achievements made,
resolutely overcoming existing shortcomings, holding high the sense of
responsibility, self-reliance, and the tradition of solidarity, our people and
country will surely surmount difficulties and challenges to successfully realise
socio-economic development targets set for 2013.
VGP
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 christian.siodmak@gmail.com. Many thanks.
No comments:
Post a Comment