Vietnam’s priority next year will be the aggressive implementation of its plan to restructure the national economy, while placing secondary importance on high economic growth, Prime Minister Nguyen Tan Dung told international donors at a meeting yesterday.
At the Consultative Group Meeting in Hanoi yesterday, the Prime Minister emphasized that the government will take drastic measures in order to be able to effectively restructure the economy.
He said Vietnam’s macro-economy has seen positive developments recently, with inflation remaining under the government’s control and consumer prices steadily declining over the last six months.
“Vietnam is capable of restricting inflation to around 9 percent next year,” he said.
Dung added that the government will continue to carry out measures intended to avoid a depreciation of the dong.
He said that the country’s foreign reserves have increased, while export turnover also posted a 34 percent rise compared with 2010.
“The government’s overspending has also fallen this year, standing at 4.9 percent, less than the 5.3-percent estimate,” Dung said.
“Overspending will continue to drop to below 4.8 percent next year.”
Regarding GDP growth, the Prime Minister said the growth rate this year is between 5.8 percent and 6 percent, adding that the government is targeting to keep the rate around 6 percent next year to stabilize the macro-economy and ensure social security.
“High growth is not the country’s first choice,” he assured.
Donors urge restructuring
Speaking at the meeting, Victoria Kwakwa, World Bank Country Director in Vietnam, said that once Vietnam has made up its mind on prioritizing the economic restructuring, the next thing the country needs is a strong will to create and implement the plan.
She urged that the restructuring should be quickly introduced.
“Delayed action can lead to a crisis,” she warned. “Vietnam is in a better condition to restructure the economy now than it will be when the depression comes.”
A representative from the International Monetary Fund urged Vietnam to issue more drastic measures to reign in the high inflation that is wracking the country.
“The economic restructuring can only be effective if the government creates adequately strong and appropriate policies,” he said.
Pratibha Mehta, United Nations Resident Coordinator in Vietnam, advised that Vietnam should expand the government’s welfare programs for people who live on government subsidies and low-income earners in this time of high inflation.
“The restructuring should aim at facilitating operations for small and medium sized enterprises to create more jobs for the poor,” she said.
“Moreover, the country should reinforce the fight against inflation to ensure that it achieves its targets.”
Administrative restructuring needs speeding up
Japanese Ambassador to Vietnam Yasuaki Tanizaki suggested that the Vietnamese government quicken its administrative restructuring to cut spending.
He added that the state budget collection system also needs improving if it is to conduct fair tax collection.
He said that although the official development assistance (ODA) pledged by the Japanese government to Vietnam this year has been delayed due to the devastating earthquake disaster in March, Japan has promised to provide Vietnam a total of US$1.9 billion in aid in 2012.
Ha Chan Ho, South Korean Ambassador to Vietnam, said that the Vietnamese government has an extremely heavy responsibility, since Vietnam is now in a new stage of development amid the global economic woes.
The Korean ambassador spoke highly of Vietnam’s economic restructuring plan, but added that “not every good strategy can be successfully achieved without strong support from the government officials.”
The meeting concluded with international donors pledging $7.38 billion in ODA to Vietnam in 2012.
The World Bank, Asian Development Bank, and Japan are the biggest donors, with their respective donations of $2 billion, $1.4 billion, and $1.9 billion.
“Although the assistance is not as high as the $7.9 billion granted last year, it is still valuable support when you take into account the EU debt crisis and the fact that Vietnam is now a mid-income earning country,” Vietnamese Minister of Planning and Investment Bui Quang Vinh said.