2011 was challenging for the agricultural sector. While the central region was struggling to cope with several major floods, the Mekong River Delta, the country’s largest rice producer, was also battling a violent deluge that breached the dyke embankments and submerged thousands of hectares of the third rice crop, resulting in growing concern about agricultural production among both businesses and farmers.
Beyond expectations, Vietnam achieved a bumper rice harvest, with the annual output reaching 41.8 million tonnes, 1.8 million tonnes more than the previous year. It not only maintained its ational food security but also exported a record 7 million tonnes of rice.
In addition to agricultural production, the national economy showed some green shoots of recovery, especially after the 11 th National Party Congress in June, despite all the doom and gloom in the global economy. The Party congress adopted a resolution that demonstrates Vietnam’s determination to pool all resources to cushion the impact of the global economic slowdown and advance towards its target of becoming an industrialised nation by 2020.
The government re-examined its list of projects and decided to put those that are non essential on hold and allocate sufficient funds for key national projects. On February 14, Prime Minister Nguyen Tan Dung signed a resolution clarifying the major tasks required to keep inflation under control, stabilize the macroeconomy and ensure social security, putting curbing inflation in the forefront.
A number of solutions were introduced, including applying tight monetary and credit policies, trimming public investments and reducing budget overspending along with conserving resources, cleaning up corruption and preventing waste. These solutions have paid off initially, resulting in a drop of the monthly consumer price index to below 0.5 percent in the final months of 2011.
Despite those solutions in place, the total capital poured into public investment projects in 2011 still rose by 15 percent, enabling more than 1,000 State-funded projects to get off the ground.
People of all social strata shared difficulties that the Party, National Assembly and Government were trying to surmount and quickly adapted to the times, tightening their belts to help the national economy ride out the global economic slowdown.
Many pressing social issues related to traffic congestion and accidents, health care, education, the environment, food safety and hygiene, and funds misappropriation were raised during the question and answer sessions of the National Assembly and the People’s Councils of Hanoi and Ho Chi Minh City – the country’s biggest and most populous cities.
Voters have high hopes for the members of the newly elected Cabinet who showed their strong commitment at the Q&A session to deal with issues under their management. Initial steps were taken in the banking and economic sectors and security forces recently cracked down on crime to ensure a happy and joyful lunar New Year festival for all.
Politically, disputes over sovereignty in the East Sea were regularly handled following a China visit by Vietnamese Party General Secretary Nguyen Phu Trong in October and a reciprocal Vietnam visit by Chinese Vice President Xi Jinping in December. Vietnam and China, that share a long borderline and the same river, are aware that they will both benefit from respecting and cooperating with each other.
According to the Vietnam Customs, as of the end of October 2011 Vietnam imported US$19.5 billion worth of goods from China, nearly a quarter of its total imports. This 10-month revenue is not insignificant to China which is considered as one of the largest production bases in the world.
It is worth mentioning that when inflation rocketed to double digits early this year, an economist was pessimistic, declaring that the national economy was the worst it has been since 1991. However, the government’s efforts to rein in inflation, stabilize the macro economy and ensure social welfare were rewarded, laying a firm foundation for the country to move forward in 2012.
2012 is forecast to be another difficult year for Vietnam due to the impact of the global economic slowdown and weaknesses in the national economy itself which cannot be surmounted overnight.
2012 is the second year of implementing Government Resolution No11 aimed at bringing inflation down to a single digit index, achieving a GDP growth of 6-6.5 percent and effectively addressing other pressing socio-economic issues.
To this end, Vietnam will accelerate economic restructuring focused on three key areas, namely public investment, the financial and banking system, and the State-owned enterprise sector, primarily economic groups and State Corporations.
The national economy has revealed some weaknesses after embarking on the Renewal process for the past 25 years, and economic restructuring is essential to make it more dynamic and efficient.
Economic reform is a long and difficult task that requires the all-out efforts of every sector. It is necessary and in line with the law of development. Russian President Dmitry Medvedev admitted in a recent television broadcast that the Russian economy needs to be reformed after a recent period of prosperity.
What will Vietnam look like in 2012? The answer lies in the will and aspirations of the Vietnamese people who alone will decide their destiny. Metaphorically speaking, a ship needs a competent captain and brave, united crewmen to successfully ride out a storm. Vietnam has both a competent leadership and the unified support of the people, so it looks certain to weather the storm, no matter how powerful it may be.