If world economic recession, Vietnam will do? Does Vietnam have to think about a new stimulus package or not?
On 23/10, Summit of the euro area countries in Europe held in Brussels (Belgium) in the context of major countries in Europe is still disagreement on the mechanism of bailout funds for the weak and banking system liquidity is difficult in the region. Meanwhile, the U.S. economy and Japan do not have any clear signals of a recovery. The unpredictable changes of the developing economies have domino effect to other emerging economies like Vietnam.
To cope with these risks, Vietnam's economy is facing an important turning point in the transformation of growth pattern and economic restructuring. Therefore, the analysis of the economic situation in Vietnam, forecast of world economic and measure affect the domestic economy is a requirement set for the policy making body.
Seminar on "Prospects for the world economy and policy responses in Vietnam" was held in Hanoi last week was exciting forum to discuss ideas and policy recommendations to help authorities of reference in the policy process to respond to the risks from world economy in 2012 and subsequent years.
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In the context of exports to developed countries reduced external capital loss, whether a stimulus package or other similar measures in 2008 are needed for emerging countries like Vietnam at this time or not? This is an issue of heated debate at the conference this year.
World economic decline, may even fall into recession. So, the phrase "economic stimulus" is once again being hotly debated. Starting from the question of the Chairman of the Finance Committee of the National Monitoring Vu Ngoan: "There are countries that are considering whether or not the stimulus plan?". In fact, many countries, but taking into account the still hesitate and mutual scrutiny. Detect whether the debt crisis in Europe is resolved how? It is true to most of the representatives from international organizations such as ADB or WB.
According to Mr. Sanjay Kalra, Chief Representative of the International Monetary Fund in Vietnam: "I know, many countries have included this issue, but it's not straight country refers to a specific stimulus. Time, their efforts only healthy its policy, cumulative foreign currency ... stepping stone to resist shocks. The country is watching developments in the global economy, particularly the U.S. and Europe ".
Patrick Dominic Mellor, Economist, Asian Development Bank - ADB said: "The low inflation is likely to consider the stimulus package but that high inflation is hard to think of a package stimulate economic growth. "
So if the world economic recession, Vietnam will do? Does Vietnam have to think about a new stimulus package or not. Still the question from the Chairman of Finance Committee monitoring State. Questions received heated debate both workshops:
Mr. Alan Pham, chief economist of VinaCapital said: "It may be thought to stimulate the economy, but should stimulate some specific industries, key industries, manufacturing and business service, such as the agricultural sector and fisheries. But to make on each loan, if that really is the new effective interest rate support. "
Patrick Dominic Mellor, chief economist, Asian Development Bank - ADB expressed: "It is impossible to do that, because how to distinguish the industry sector is specialized in production and business, What industry sectors do better work. I think never fully debated this issue first. "
Answer his question Vu Ngoan, Supervisory Board Chairman of National Finance: "The financial plan taking into account the same if the world economy fell into recession? Representatives from the Ministry of Finance confirmed that Vietnam has yet to set out the economic stimulus plan:
"No plans to focus on stimulating the economy - society 5 years, the trend is to create a large enough fiscal space to deal with the global economic turmoil ... declining budget deficit" - As Vu Thang, Director of Institute of Strategy and Finance Policy, the Finance Ministry said.
International Monetary Fund has also forecast lower world economic growth in 2011 and 2012 to 4%. The global economy is declining rapidly due to rate instability in Europe. Although no country in the world offer a stimulus package like in 2008, but each country is preparing the appropriate policy response to its own ready to face the challenges this.
In this context, restructuring the economy is one of the requirements set out. In particular, a focus of economic restructuring is now restructuring the banking department towards reducing the volume and scale. It is the task of the Vietnam economy is Deputy Prime Minister Vu Van Ninh highlighted in a workshop held last week. Restructuring the banking system is still weak policy proposals are the World Bank, Asian Development Bank and the scientists of research institutes in Vietnam simultaneously proposed in the workshop.
Song not only restructuring the banking sector, where reform of state enterprises and public investment are two of three at the heart of economic restructuring plenum was recently defined 3. The re- How to structure a problem getting more hotly debated by scientists, economists and foreign leaders in the conference. Ultimately resolve this reform is seen as an orientation for Vietnam's economy before the internal difficulties and the unpredictable changes of the world economy at this time.
Proposed by Dr Tran Xuan Gia on the firm selling SOEs, public investment projects that the State does not need to know immediately heated discussion in the hall.
Mr. Tran Xuan Gia, former Minister of Planning and Investment proposal: "The state sold off or even sell at a loss of work, the project is unfinished, but that the State does not need to know, do better than private, to sell, sell off to make the necessary money. "
"Sale" is a good idea to get the consensus. Many investment projects though not efficient, though not raised enough capital to SOEs, but still, the city has been to "place holder". Implications are so many unfinished projects, which cover the projector is waiting.
On this point, Nguyen Xuan Thanh, programs Fulbright Economics Teaching agrees: "For the project, including deployment and, if the seller must sell, if not also be cut. Because public debt to GDP still high. If we do not reduce the immediate, to ensure not affect your ability to cut debt later. "
"Sell". But what part? And how to sell requires careful consideration.
According to Dominic Patrick Mellor, chief economist, Asian Development Bank - ADB: "Do not equate that to clearly classify the SEs. The businesses that provide essential services such as electricity is not welfare so hurry. But the mere business of SOEs, the Government should sell as quickly as possible to make a profit, reduce public spending. "
Sell or equitization has been identified as strategic policy, but implementation is very slow. One reason is the fear of losses when the sale of state assets.
Bui Ngoc Son, head of the International Economic Research Institute of Economy and World Politics question: "The temple is sold for money to the budget or sold for more economic efficiency? Which priority more ".
"Selling is to collect money for the budget, but not too heavy set. It takes a look to the future 5 years, 10 years later. If we continue to give money to support those businesses that are no longer effective not by selling "- the opinion of Mr. Le Xuan Ba - Research Institute for Economic Management Central.
SOEs in any country are also potential problems of governance. In Vietnam, this issue is particularly important when the high proportion of SOEs in the economy. Therefore, restructuring of SOEs and public investment has been identified as key tasks besides restructuring the banking system to bring the economy out of the internal challenges and international moment.
Economic Restructuring is not a new phrase. But it's never mentioned much now, and have never received such high political commitment at this time. Conference Resolution 3 of the Central Party Committee XI recently highlighted the important content is to restructure the economy associated with innovation growth model, focusing on three areas most important restructuring investment, restructuring the financial market and restructuring of state enterprises. Many experts at the conference also agreed highly with this policy as a rule inevitable - after a long time to develop faster overall review and reform the economy is still weak to continue with step sustainable development over the coming years. It is more urgent as the world economy is unpredictable.
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