PM conveys strong message on mastering fiscal measures (04/02)
04/02/2013 - 16 Lượt xem
In less than 3,000 words, the Prime Minister (PM) expressed his determination
to implement six goals including improved institutional and policy
response capacity, to create market confidence; monetary policy
adjustments based on market fluctuations and target inflation; monetary
policy further linked with fiscal policy; Removing difficulties in production and sales and providing proper marketing support; promoting administrative
reform and highlighting the responsibility of public officials in the
performance of their official duties; Promoting economic restructuring
process; and ensuring social security and welfare.
Looking
back at the economic situation in Vietnam last year, the biggest
achievement was the highest foreign exchange reserves yet recorded.
However, increased bad debts, large inventories, high credit interest
rates compared to business profitability, snail-paced economic growth,
and decreased corporate and individual incomes were still major
questions. PM Nguyen Tan Dung also indicated big challenges for
Vietnam's economy in 2013, especially when the world economy and
Vietnam's major export and investment markets are slowly recovering.
In such a context, the Government decision
to adjust domestic monetary policy based on the market and the
targeting of inflation and to combine tightened monetary policy with fiscal controls was applauded by economists.
PM Nguyen Tan Dung said, "In conditions of a limited budget and narrowed fiscal space, monetary policy plays an important role in controlling inflation while promoting economic growth."
To increase demand while raising money is considered the "golden key" to unlock the current congestion, which is also a problem plaguing not only faced by Vietnam but also global powers such as the US and Japan.
So,
PM Nguyen Tan Dung pointed out: "In principle, the implementation of
tightened monetary policy should be flexible to make sure interest
rates are maintained in line with the targeted inflation rate.
Non-performing loans should be drastically dealt with to unfreeze
capital in the economy. The State Bank of Vietnam should effectively
use market instruments to reduce interest rates and to ensure
reasonable credit growth, manage and supervise the activities of credit institutions. Administrative measures in regulating the money market should be minimized."
In
terms of economic restructuring (with the restructuring public
investment by far the most important), three strategic breakthroughs -
the model of innovation and growth, institutional and administrative
reforms - and social security and welfare improvement won't be
successful unless Vietnam knows how to master and optimize the use of
its currency.
The
write-off of bad debts, huge warehouse inventories and properties will
likely depend on the effectiveness of these policies. "In terms of
demand reduction, treatment of bad debts may take time, credit growth
may be even low in the first months of the year, but fiscal
policy has a crucial role in creating demand in the economy. We must
urgently implement the planned investment projects in order to increase
aggregate demand to stimulate the economy and create spillover effects
on business activities. In the course of the implementation of the
projects, we need to incorporate fiscal
and monetary policy to regulate aggregate demand, ensure lower
inflation and higher growth in 2013 compared to the previous year," PM
Nguyen Tan Dung said.
The goals are clear and the solutions have been set; however, the decisive factor how good organizations of the administrative enforcement and the socio-political system will function.
Moreover, time is also pressing. 2013 is set to be the year to rush to the finish
for Vietnam, to realize PM Nguyen Tan Dung's message, to see positive
changes in every business, every unit, and every locality. The Year of
the Snake 2013 could bring a radiant smile to every one of us./.
Source: VEN
Source: VEN
