Eco­nomic re­struc­tur­ing re­mains dif­fi­cult

Viet Nam News - - Front Page -

NINH BÌNH — The bi-an­nual Au­tumn Eco­nomic Fo­rum 2014 held in the north­ern prov­ince of Ninh Bình last Satur­day was seek­ing fresh ways to speed up Vieät Nam’s eco­nomic re­struc­tur­ing process.

The Na­tional Assem­bly’s Eco­nomics Com­mis­sion joined the Viet­nam Cham­ber of Com­merce and In­dus­try and the Academy of So­cial Sciences in or­gan­is­ing the two-day fo­rum, which car­ried the theme: “Eco­nomic Re­struc­tur­ing: Ex­pec­ta­tion for Vig­or­ous and Fun­da­men­tal Changes.”

In her ad­dress at the fo­rum, Nguyeãn Thò Kim Ngaân, Na­tional Assem­bly vice chair­woman, high­lighted Vieät Nam ’ s eco­nomic achieve­ments in the first nine months of this year.

Ngaân said: “This fo­rum is of great im­por­tance be- cause it is held at a time when the Com­mu­nist Party of Vieät Nam is re­view­ing 30 years of ren­o­va­tion and five years of im­ple­ment­ing the Res­o­lu­tion of the 11th Party Congress.”

She stressed the dif­fi­cul­ties now fac­ing en­ter­prises, the weak credit ab­sorp­tion ca­pac­ity of the econ­omy and a range of prom­i­nent so­cial is­sues.

Ngaân re­marked: “ We hope to re­ceive con­tri­bu­tions from eco­nomic ex­perts, pol­icy mak­ers, state man­age­ment agen­cies and lo­cal au­thor­i­ties to re­alise this year’s tar­gets and map out ori­en­ta­tions for the years to come. We need to dis­cuss the con­straints in eco­nomic re­struc­tur­ing, es­pe­cially in com­bin­ing eco­nomic re­struc­tur­ing with growth model shift­ing.”

She also sug­gested that par­tic­i­pants fo­cus on analysing the ef­fec­tive­ness of Viet­nam’s eco­nomic re­struc­tur­ing, in­clud­ing bot­tle­necks and other rea­sons for the slow process, and pro­pose mea­sures to re­move ob­sta­cles to the suc­cess­ful im­ple­men­ta­tion of goals for 2014 and the years to come.

Un­der its So­cio- Eco­nomic De­vel­op­ment Plan for 2011 to 2015, Vieät Nam aimed to re­struc­ture State- owned en­ter­prises, the pub­lic sec­tor and com­mer­cial banks. Ad­dress­ing the fo­rum, UN Res­i­dent Co- or­di­na­tor Prat­i­bha Mehta praised the progress in so­cio- eco­nomic de­vel­op­ments and so­cial se­cu­rity which Vieät Nam achieved in re­cent years.

She said that amid uncer­tain­ties, as well as risks and op­por­tu­ni­ties, Vieät Nam had great po­ten­tial but also needed much greater ef­fort, es­pe­cially in strength­en­ing business com­mu­nity ca­pac­ity on the ba­sis of ad­vanced tech­no­log­i­cal plat­forms, fo­cus­ing on in­vest­ments in hu­man re­sources and push­ing for­ward in­sti­tu­tional re­forms to face the chal­lenges and seize the op­por­tu­ni­ties to fa­cil­i­tate its de­vel­op­ment.

“By Au­gust 2014, FDI en­ter­prises ac­counted for 67.3 per cent while do­mes­tic en­ter­prises ac­counted for only 32.7 per cent of ex­port turnover. The value of FDI in­dus­trial pro­duc­tion also reached ap­prox­i­mately 70 per cent. This should be con­sid­ered se­ri­ously be­cause eco­nomic growth must be as­so­ci­ated with the ac­cu­mu­la­tion of do­mes­tic re­sources, strength­en­ing of na­tional ca­pac­ity and in­creas­ing the strength of do­mes­tic en­ter­prises,” the for­mer min­is­ter noted.

Ac­cord­ing to Traàn Ñình Thieân, di­rec­tor of the Vieät Nam In­sti­tute of Eco­nomics, the coun­try’s econ­omy has yet to reach rock-bot­tom in spite of its sta­ble mo­men­tum and the de­crease in its growth rate ob­struc­tions.

The econ­omy is suf­fer­ing from a heavy “con­ges­tion of growth, ” Thieân noted, adding that only FDI en­ter­prises, among the four growth dy­nam­ics that in­clude State-owned en­ter­prises, FDI en­ter­prises, the pri­vate sec­tor and the agri­cul­tural sec­tor, de­liv­ered a good per­for­mance which, how­ever, has brought about the trend of “FDI-tis­ing” the econ­omy.

Thieân crit­i­cized the weak eco­nomic foun­da­tions, as well as the ap­pli­ca­tion of heav­ily ad­min­is­tra­tive and short-term mea­sures, the non-mar­ket-based pric­ing, and in­signif­i­cant progress in re­form­ing sta­te­owned en­ter­prises and the agri­cul­tural sec­tor.

Show­ing sym­pa­thy with the views of Thieân, Traàn Du Lòch of the Na­tional Assem­bly del­e­ga­tion of HCM City stressed the con­se­quence of macroe­co­nomic in­sta­bil­ity in the last six years, which was ex­posed most clearly in 2013 and showed that the econ­omy was not yet out of the woods of de­pres­sion.

Lòch pro­posed a bet­ter le­gal frame­work for the set­tle­ment of non- per­form­ing loans. In his opin­ion, the Vieät Nam As­set Man­age­ment Company (VAMaC) should be made more fi­nan­cially ca­pa­ble, sug­gest­ing that an in­flow out­side of the bank­ing sec­tor deal with this is­sue.

Nguyeãn Xuaân Thaéng, the fo­rum chair­man, ar­gued that the econ­omy should also be viewed pos­i­tively in the light of such achieve­ments as the im­prove­ment of the com­pet­i­tive­ness in­dex. But Thaéng noted that the agri­cul­tural sec­tor was sta­ble but ex­hibit­ing low growth lev­els as farm­ers kept re­turn­ing their land.

To cre­ate sta­bil­ity, cap­i­tal in­vest­ment in agri­cul­ture should be in­creased. Thaéng and Vuõ Vieát Ngoaïn, chair­man of the Na­tional Fi­nan­cial Su­per­vi­sory Com­mit­tee, agreed that the tight­en­ing of credit due to the po­ten­tial col­lapse of the com­mer­cial bank­ing sys­tem in 2011 was the right pol­icy but some­what over the top, as it limited the ac­cess to credit sources of en­ter­prises and ex­hausted them.

Thaéng pro­posed the clar­i­fi­ca­tion of spe­cific so­lu­tions to re­store op­por­tu­ni­ties to en­ter­prises after the re­ces­sion. He stressed that it was nec­es­sary to clar­ify whether in­fla­tion was slow­ing down be­cause the right poli­cies were be­ing im­ple­mented or be­cause do­mes­tic de­mand was weak.

It was also nec­es­sary to show how to re­store ag­gre­gate de­mand, solve cor­po­rate debt, and iden­tify a rea­son­able rate for the bud­get deficit to have more funds for re­struc­tur­ing the econ­omy with­out recre­at­ing un­der­ly­ing in­fla­tion.

Par­tic­i­pants agreed that no ma­jor changes had taken place in the process of re­struc­tur­ing the econ­omy in 2013, and un­less syn­chro­nized so­lu­tions were in­tro­duced and per­sis­tently ap­plied in 2014, the re­sults in 2015 would re­main un­re­mark­able.

For­mer Com­merce Min­is­ter Tröông Ñình Tuyeån said the re­struc­tur­ing process was slow be­cause of a lack of cap­i­tal reg­u­la­tions, cum­ber­some formalities and an un­fa­vor­able business cli­mate. —

VNA/VNS Photo Thanh Long

Viet­namese en­gi­neers and for­eign ex­perts work at the op­er­a­tion cen­tre of the Dung Quaát Oil Re­fin­ery Plant. —

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