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A platform for economic growth   2010-02-13 - VietNamNet/VIR

The outlook for 2010 offers a chance to create momentum for high economic growth in the next few years. The Minister of Planning and Investment Vo Hong Phuc shares his views with VIR’s Linh Ngoc on Vietnam’s economic prospects for this year.


Minister of Planning and Investment Vo Hong Phuc

Looking back in 2009, what do you think was the government’s major success in managing the economy?


In my view, the major success of the government’s economic management is its quick response to the global economic crisis. During the fourth session of the 12th National Assembly [that took place in October and November in 2008], the socio-economic development plan for 2009 was approved.


However, we quickly adjusted the overall economic targets in December, 2008 as there were signs of a slowdown in the domestic economy. The global economy was sinking into recession and this would, of course, have negative impacts on our economy.


In particular, the government issued Resolution 30/2008/NQ-CP on adjusting economic growth targets. The targets were changed from reining in inflation to preventing an economic slowdown. This quick response to the fluctuation in the world economy and the drastic measures the government took, helped keep our economy out of recession. These decisions also contributed to keep our economic growth at 5.32 per cent for 2009.


But, would you agree that the economy still has problems that need to be resolved?


I would agree that some economic issues were not resolved in 2009. At first the implementation of the government’s stimulus package was good. But, several administrative procedures caused problems in the implementation of the package in some areas.


Secondly, the disbursement of funds for foreign direct invested projects, government bond-funded and official development assistance-funded projects progressed slowly, despite the implementation of measures designed to speed this up.


Thirdly, administrative procedures in areas such as customs are still complicated and create problems for businesses. We must try to resolve these issues this year.


How do you think the economy will perform in 2010?


I think the economy in 2010 will be better than 2009. The National Assembly has set a growth target of 6.5 per cent, but I hope we will beat this target. If we succeed, conditions in 2011 will be better. Higher economic growth will also create momentum for our socio-economic development plan for 2011-2015.


We have two important duties this year. These include meeting our development targets and restructuring the economy. We need to successfully implement our development plan for 2006-2010 and prepare for the implementation of the next five-year socio-economic development plan. We also need to work on the socio-economic development strategy during 2011-2020.


Our development aims need, therefore, to dovetail with our work in restructuring the economy. If we want higher economic growth, we must focus on restructuring the economy.


The Ministry of Planning and Investment (MPI) has drawn up a proposal to restructure the economy, can you tell us more about this?


We have submitted the plan to the Prime Minister and we are awaiting his comments. In the proposal we pointed out the main problems in the economy. In fact, this is a continuous part of our process of reform. The main purpose of the project is to review and assess the state of the economy so that we can then pinpoint what needs to be changed or restructured.


What are the big problems pointed out in the MPI’s restructuring plan?


Our plan points out three major problems that need to be fixed soon. First, if we want to change the structure of the economy, we have to first build a solid foundation. This foundation must be based on making a breakthrough in market institutions.


Specifically, we must finish constructing market institutions with a socialist orientation. However, these must tie in with our World Trade Organization commitments and our continuing integration into the global economy. The market institutions must be structured to allow state management of the organisations and areas vital to improving Vietnam’s socio-economic development.


Another big problem we face in Vietnam is a lack of good infrastructure. We have to keep improving the quality of our infrastructure to meet the demand for development. Vietnam is also facing a big problem in regard to the quality of human resources. It is essential for us to quickly raise the ratio of well-trained workers so to serve the growth of the local business community as well as the economy.


What specific changes need to be made in each sector of the economy in the coming time?


Certainly, during the restructuring process specific measures need to be taken for each economic sector. For instance, when we make changes in the industrial sector we have to focus on the development of hi-tech industry. However, we will still develop labour-intensive industries.


In the agriculture sector, we will focus on products that have competitive advantages and are export-oriented. The improvements in the agriculture sector will be in terms of quantity and quality. Improving productivity in this sector will help lift the living standards of farmers.


The service sector also needs to be improved. But, it is important to pay particular attention to value-added services such as finance, banking and telecommunications.


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