The remarks were made by Minister of Planning and Investment Bui Quang Vinh at a Vietnam Business Forum (VBF) held in Hanoi on December 2 within the framework of the Consultative Group (CG) meeting for Vietnam.
However, Vinh said the country’s economy still faces a number of challenges, including high inflation, sluggish securities and real estate markets, increasing bad debts of banks, and stagnant industrial production. In addition, businesses find it difficult to access capital due to the tight monetary policy.
In response to the situation, the Government plans to restructure the economy, focusing on public investment, State-owned enterprises, and the banking and financial market. It will approve a restructuring plan in the three areas in January 2012 and submit to the National Assembly an overall master plan on economic restructuring together with a renovated growth model in June 2012.
Minister Vinh expressed his hope that Vietnam will receive more support from international organizations and donors for the process.
He said that this year VBF discussions centre on five major issues: banking, the capital market, production-distribution, tax, and land, which are closely related to Vietnam’s requirements for the renewal process and can help the country compete in the investment and business environment.
A VBF report shows that 2011 is a difficult year for businesses and more challenges are lying ahead. This is demonstrated through the business confidence index which has hit a record low over the past three years. Only 26 percent of 240 surveyed businesses said the businesses environment in 2011 is good, equal to half of last year’s figure. However, most businesses are optimistic about the long-term economic prospects. Seventy percent of the surveyed businesses agreed to expand operation in the next three years.
Access to information and tax procedural settlement was viewed as positive while little progress was made in ensuring intellectual property rights, fighting counterfeit products, and accessing foreign currencies and land.
Macroeconomic management was placed atop the three concerned fields.
Most businesses said that the Government should consistently maintain macroeconomic stabilization measures, strengthen administration reform, lessen barriers to market access, and improve the transport and energy systems.
Alain Cany, President of the European Business Association in Vietnam said confidence in the Vietnamese market fell by 20 percent due to high inflation and macroeconomic management issues, which affects both domestic and foreign businesses. However, European businesses find great potential in the market.
Such dialogue between businesses and the Government will devise effective measures to improve the investment environment in Vietnam in the future, Alain said.
At the VBF, businesses and the Government discussed issues related to building an effective and competitive banking system, building a capital market for growth and competitiveness, and developing Vietnam into a production centre with increased value./.