How to escape underdevelopment?

Could you talk about the specific time frame for bringing development to Vietnam?

The resolution of the 9^th Party Congress said that by 2020 our country will basically become an industrialized country. Therefore, the five-year plan (2006-10) is an itinerary to achieve that goal and we are still discussing the standards for an industrialized country.

We’ve often focused on short-term visions in plans. Could we deal with this problem in this five-year social-economic plan?

Planning is a very significant issue. We can immediately see something, but for other issues, we have to make drafts. For example, how will the petroleum market grow in the next five years? Of course it will change. So the quality of planning and plans depends on the quality of the forecast. In our guidelines, though, long-term vision is a must. That’s why the Government has instructed related bodies to check planning and adjust plans which are not suitable.

What is the higher vision? If domestic experts can’t realise all plans, the government allows international experts for help. It is important that we have to detect what issues have not yet been realised. This not only requires the brainpower of planning experts but the brainpower of the whole people.

The report of the Party Central Committee brought up the idea that the “risk to further lag behind in terms of economics compared to many countries region and the world still exists”. Could you explain this more?

We have defined the risk but, it is more important to have solutions to deal with that risk. That’s the job we must make clear in this year’s plan and the plans of subsequent years. For economics, we have mentioned the standards for economic development.

Losses in capital construction and problems in investment management are now a burning issue. Could you talk about measures for this?

For problems associated with investment management we have had some specific lessons. For the past few years the Government has had many instructions to raise the effectiveness of investment management. For example, the Government issued Instruction 29 on raising the quality of planning and strengthening laws in investment management. Last year the Government released Instruction 21, on checking and adjusting planning, with an eye on stopping ineffective projects. In recent years, the Prime Minister has asked ministries to strengthen inspection of large projects which have problematic signals. Related ministries and agencies are having to make clear the responsibility of each place where the media mentions the PMU 18 scandal.

Previously, we paid special attention to allocating capital to the right places, but did not properly assess the supervision and management of capital. In 2002, under Article 20 of the Decree on Managing Construction Investment, the Ministry of Planning and Investment established the Department on Investment Evaluation and Supervision and the Inspection Body on Investment.

Investment management needs the cooperation of the community at the grassroots level. Thus, MPI has submitted to the Prime Minister to issue the community supervision regulations.

Please tell us about the investment capital raising scale in the next five years?

To have high growth rate we have to raise more investment capital. For example, foreign direct investment last year reached US$5.89bil, over 40% more than 2004. Our target is raising more investment capital from all sources. This task has been defined in the economic structure.

How will diminish state intervention in business?

This policy has been reflected through the Enterprise Law, the Investment Law and others. Enterprises operate under the laws, avoiding the State’s direct administrative intervention into their operations.

State-owned enterprises will operate under the form of one-member limited responsibility companies or joint stock companies. This is a measure to reduce or stop administrative intervention in business operations of enterprises.

There is still a state preference, or discrimination, among certain economic sectors. How can we create a level playing ground for all enterprises?

The State has issued many documents strictly prohibiting discrimination. In fact, discrimination existing at some sectors or some localities is mainly because of management. The State’s policy is that there is to be no discrimination. The Investment Law and the Enterprise Law have been issued and they will take effect on July 1, 2006. We are completing decrees to guide the implementation of those laws. The Prime Minister has also had regular meetings with enterprises to deal with their problems.

The economic growth rate of 7.5-8% is reasonable? What are the measures to realize it?

Some delegates said that last year we achieved growth rate of 8.4% while the target for the next five years may reduce. The target we set is based on actual calculations in recent years. We need to look at the mobilization of resources in all economic sectors and social resources. We will especially attach importance to human resource development and facilitate infrastructure development. Foreign factors can’t do those things for us. These are the foundations for use to set the growth rate target, and it is completely feasible.

Does the issuance of the Investment Law cause difficulties for domestic investors?

No difficulty. When the Investment Law was compiled we met with many domestic investors and received no complaints. Domestic investors don’t have to register their projects worth less than VND15bil (US$937,500), only projects in the conditional fields. They only have to register for projects of VND15-300bil ($937,000-18.75mil). In cases where they need a certificate for investment incentives, the State will grant them.

How do you feel about Party members doing business for themselves?

This policy is being discussed at the Congress. Please wait. The final decision will be in the resolutions of the 10^th Party Congress.

International economic integration

Vietnam may enter the World Trade Organisation (WTO) later than originally planned. How will that affect us?

We set the goal to join the WTO in 2005, but it depends on many factors. By the end of 2005 we had four countries that we still needed to negotiate with. So far, negotiation with those countries is about 90% complete. We hope to join the WTO this year but I can’t tell the specific time.

About the losses due to late accession to the WTO, there are two issues. One is accession, and a second, larger issue is implementation of commitments once we join. Accordingly, we have to amend our laws to be suitable to international commitments and raise the competitiveness of the economy. It is clearly that our enterprises must have higher competitiveness.

Microsoft Chairman Bill Gates is about to visit Vietnam. What is the role of the information technology industry to Vietnam?

IT is one of the key industries of Vietnam. Vietnam ranks sixth among 10 ASEAN countries, but in terms of growth, we have a higher ranking because our human resources have opportunities to access to IT quite quickly, so many large IT groups in the US and Japan, for example, have paid attention to Vietnam. We welcome investors in this field to Vietnam.

When will foreign investors have the rights to buy majority shares?

We are performing the itinerary of integration under international commitments, especially in some conditional fields like banking. The laws regulate foreign investors’ share purchasing. In some areas, they can buy shares more than 30%, and this is one form of foreign indirect investment.

PMU 18 scandal – large gaps in management

The PMU 18 scandal exposes gaps in economic management at the government level. How are these problems identified and are there any others?

There are many stages in project management. In the PMU 18 case, the direct gap is in the management of organization and implementation of the project and the stage of supervision. Another direct and basic reason is personnel. These are three direct reasons.

In economic development, through some decrees, we have clearly defined responsibility. We will try to avoid overlap to find our specific persons for specific responsibility. We will report to the Government to complete the process of project management.

Could you talk about measures to fight corruption and to stop scandals like PMU 18?

Anti-corruption was put forward by President Ho Chi Minh in 1945. The 9^th Party Congress emphasized this issue. The National Assembly has issued the Law on Anti-Corruption and the Law on Thrift practice and Anti-Waste. In addition, we have action plans in the government and we also have a system of macro inspection and a system of inspection for each specific case.

Does PMU 18 affect investment in Vietnam?

This scandal has caused the Party and the State deep grief. The public is aware of what is going on and the case has caught the attention of foreign investors. Whether this case affects investment attraction or not, it depends on the point of view and the way we deal with this case and with anti-corruption. The Party and the Government of Vietnam have taken drastic measures in this issue.

What has MPI learned from this case?

The Prime Minister has instructed all sectors to learn from the experience. The MPI has reported to the Prime Minister. We will make specific results available in the near future

Source: VietnamNet