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Vietnam records high and sustainable economic growth: WB report
06/08/2010 - 295 Lượt xem
The report focused on improved policies, trade growth and South-South investment flows, but warned of the risks posed by widening payment imbalances and high oil prices. This is considered one of important foundations for developing countries like Vietnam to attract more official development assistance (ODA) and foreign direct investment (FDI).
According to the report, Vietnam recorded high and sustainable economic growth, ranking second in Asia, just behind China. Since 2000, the country has achieved an annual economic growth rate of 7.5 percent. In 2005, the rate reached up to 8.4 percent, helping Vietnam become one of the most attractive investment destinations for foreign investors.
After 20 years of the implementation of the
Doi Moi (Renewal) process, Vietnam has gained remarkable achievements in socio-economic development, particularly in GDP growth and investment rate/GDP. In addition, ODA capital for Vietnam increased rapidly over the past years, thus actively contributing to the country’s socio-economic development. The country ranked sixth among the world’s top 10 countries, and had the largest ODA capital in the 2000-2002 period. In 2004, Vietnam secured fifth position in terms of ODA attraction, just after Iraq, Congo, Afghanistan and China.However, the report said Vietnam still belongs to the world’s low-income group, including Cambodia, the Democratic People’s Republic of Korea, Laos, Myanmar, Mongolia and East Timor.
The reported also noted that net private capital flows to developing countries reached a record high of US$491 billion in 2005, driven by privatisation, mergers and acquisitions, external dent refinancing, as well as strong investor interest in local-currency bond markets in Asia and Latin
America. The surging flows, including record banking lending and bond issuance, coincided with 6.4 percent economic growth in the developing world last year, more than double the 2.8 percent growth of developed countries.According to WB Chief Economist and Senior Vice President for Development Economics Francois Bourguignon, the increased capital flows reflected greater confidence in the economic prospects of several developing countries. Countries are benefiting from improved global market conditions and investment climates, while closer global financial integration is posing difficult challenges to policymakers in both developed and developing countries to sustain economic growth and financial stability.
The sharp rise in private flows to developing countries came despite uncertainties caused by high oil prices, rising global interest rates and growing global payments imbalances. Private debt flows to developing countries rose to an estimated US$192 billion, up from US$85 billion in 2003, driven by abundant global liquidity, steady improvements in developing-country credit quality, lower yields in rich countries, and an expansion of investor interest in emerging market assets. Many developing countries have received credit-rating upgrades to accompany record-low spreads on their bonds, enabling them to raise a record US$131 billion in bond issues in 2005, up from US$102 billion in 2004.
Mansoor Dailami, lead author of the 2006 Global Development Finance report, said while South-South flows are a relatively small share of total private flows, they have the potential to change the face of development finance, particularly if growth in developing countries continues to outpace that of developed countries.
Tran Ngoc
Source: VOV news
