Tin mới
Consistent Government Policies Stabilize Economy (01/6)
01/06/2011 - 10 Lượt xem
Signs of improvement
Economic experts said that Government Resolution 11 and a series of policies to tighten money and finance, reduce public investment and budget overspending, boost production and trading, and restrict import would lead to positive changes in the Vietnamese economy. Initial good results were visible after the General Statistical Office under the Ministry of Planning and Investment announced the Consumer Price Index (CPI) for this May, which increased 2.21 percent from last month. This means that after three months of continuous growth to a record high 3.32 percent this April, the CPI growth began slowing down in May.
The balance between supply of and demand for foreign currency has also improved after a range of the State Bank's amendments to several policies on the flexible foreign exchange market, such as putting in place a policy on organizations/individuals subject to foreign currency loans, increasing the obligatory reserve rate, regulating the ceiling interest rate of US dollar deposits of individuals. The US dollar flow to banks has increased meeting enterprises' need for payment in foreign currency.
Particularly, the Ministry of Planning and Investment said that in an effort to reduce public investment, ministries, central agencies and local authorities have slashed VND97 trillion accounting for 10 percent of total investment capital. Although the reduction fell below what was expected, experts believed that it would greatly affect the economy in the near future.
Associate Professor, Dr. Le Xuan Ba, the director of the Central Institute for Economic Management (CIEM), said that Resolution 11/NQ-CP presents comprehensive solution packages, which if taken seriously would help curb inflation and stabilize the macro economy.
Dr. Nguyen Minh Phong from the Vietnam Socioeconomic Development Research Institute was optimistic about the achievements. However, he predicted that despite possible improvements in the last months of this year the Vietnamese economy will still be put under great pressure, particularly that created by high inflation and high interest rate that will affect the market, businesses, social security and employment.
Seeking stability and sustainable development
Nguyen Minh Phong said that Vietnam will need adaptation policies in the short term. Specifically, central and local authorities, ministries, sectors and related agencies need to (1) pursue the sustainable development goal, (2) increase information and prediction of social policies that would affect the economy, (3) show the dark side of current policies in order for competent agencies to make timely changes and (4) create conditions favorable for businesses to grow by increasing underwriting of loans for them, simplifying loan procedures and changing loan term to match the borrower's production cycle.
Particularly, it is needed to go the right way to the total competition market, meaning that competition in supply must take place before a market price mechanism is applied, particularly in the areas of power, gasoline and oil. It is also important to increase and soften the ceiling interest rate of deposits before it is floated, while control the ceiling interest rate of loans and increase macro control to reduce capital trading and an emphasis on loans for non-production projects. Apart from prohibiting banks from speculating/raising and lending gold, it is vital to quickly devise a regulation on, and institutionalize gold production and gold ingot trading.
The state and every organization/business need to attach much importance to (1) developing information systems and warning tools, (2) making scenarios to prevent risks related to internal insecurity, first being public debts and short-term credit debts and (3) increase investment evaluations and timely find/terminate unworkable investment projects. Businesses also need to examine investment projects, restructure themselves, particularly business directions and capital sources, reduce operational costs and focus capital on production and trading.
It is also necessary to (1) strengthen social security systems, stabilize people's livelihoods by boosting hunger eradication, poverty reduction, vocational training and job creation, (2) develop domestic distribution systems to keep abreast of the market demand and (3) increase information and propaganda to make people better understand and support the government's efforts to put prices under control and stabilize the market./.
Source: VEN.
