Reversing economic slowdown

Mr Dung noted that the global financial meltdown and economic recession took a heavy toll on almost all countries, including Vietnam which was actively integrating into the world. Exports, investment and tourism services were the hardest hit. When the crisis began, Vietnam’s economy was already suffering the effects of measures taken to rein in runaway inflation in 2008, as well as the aftermath of natural disasters and epidemics. In addition, hostile forces continued to carry out subversive activities against the country.

After consulting many experts, the government issued resolution No30 proposing a number of emergency measures to halt the economic slowdown, maintain steady growth and ensure social welfare. 

At the 5^th session in May, the National Assembly approved the government’s proposal to shift the priority from curbing inflation to stopping the economic downturn. Mr Dung said that the objective has been achieved. Despite the global economic recession, Vietnam has stabilised its economy, achieved steady economic growth and increased resources for investment and development. GDP has increased steadily each quarter, from 3.14 percent in quarter I to 4.46 and 5.76 percent in quarters II and III respectively. Overall, the nine-month GDP rose by 4.56 percent and the figure is expected to reach 5.2 percent for the year, meeting the legislature’s set target.

To do this, Mr Dung said the government has shifted from a “tight financial and monetary policy” to a “pro-active financial policy” and a “loose and flexible monetary policy”. Thanks to the recovery of productivity, total budget revenue this year is expected to hit VND390.65 trillion (0.2 percent higher than previously estimated) and the trade deficit is likely to be kept at 6.9 percent of GDP. The total national debt balance is forecast to make up 29.7 percent of GDP, which is within acceptable limits.

In the face of the global economic turmoil, the government has paid special attention to caring for the poor, social policy beneficiaries and those living in disadvantaged areas. Total spending on social welfare is estimated at VND22 trillion, up 62 percent against 2008.

Progress has also been made in cultural and social affairs, administrative reform, thrift practice and the fight against corruption and waste. The country has maintained social-political stability, strengthened national defence and security, and continued to elevate its position in the world.

In his report, the PM pointed out weaknesses of the national economy in the past 9 months, saying GDP hit a 10-year record low, economic restructuring proved inefficient in some areas, and competitiveness remained low. In addition, macro-economic balances were not steady, budget overspending increased and a loose monetary policy ran a potential risk of high inflation. Administrative reform did not meet expectations, corruption was still serious and there were more public complaints and denunciations than last year.

Outlining major tasks and solutions

In 2010, Mr Dung said the main targets are to raise the GDP growth rate to a level higher than in 2009, improve the quality of growth, maintain macro-economic stability, prevent high inflation, ensure social welfare, accelerate global integration and increase international economic cooperation.

According to him, the government has identified  6 major tasks for 2010:

1. To make the best use of investment and development resources, accelerate economic restructuring and increase the quality, efficiency and competitiveness of products, businesses and the national economy as a whole.
2. Ensure large economic balances, reduce the import surplus and improve the international payment balance; reduce the trade deficit and apply an appropriate monetary policy to rein in high inflation, increase macro-economic stability and create a favourable environment for investment and business activity.
3. Develop agriculture and rural areas; promote the programme on building new rural models; develop agriculture in a comprehensive, efficient and sustainable manner; and improve farmers’ lives.
4. Develop social services in harmony with economic development, speed up the poverty reduction programme, increase social welfare and solve the social issues of most concern to people.
5. Make a breakthrough in administrative reform, perfect market economic institutions, create an equal footing and competitive environment, develop high-quality human resources and build transport infrastructure to create the prerequisite for restructuring the economy and transforming the growth model to ensure rapid and sustainable development.
6. Firmly defend national sovereignty and maintain political security, social order and safety, improve the efficiency of foreign relations activities and international economic integration and make full use of resources to create a favourable environment for national development.

The government has proposed 5 major solutions to fulfil the tasks for 2010.

1. Continue to improve the investment and business environment; boost production, develop services; urgently draw up and implement a project on economic restructuring and the transformation of the growth model.
2. Manage the financial and monetary policy flexibly to stabilise the macro economy, prevent high inflation and achieve the growth target.
3. Ensure social welfare; develop culture and social affairs and protect the environment;   
4. Increase the effectiveness and efficiency of State management; accelerate administrative reform, practise thrift, combat corruption and waste.
5. Increase national defence and security; ensure social order and safety; improve the efficiency of external affairs and create a favourable environment for national development.

The government will keep a close watch on national developments, enhance forecasting capacity, act deliberately and make all-out efforts to fulfil all tasks entrusted to it by the Party and people, said Mr Dung. 

Major targets proposed for 2010

• GDP: up 6.5 percent, GDP per capita: US$1,200
• Total export value: up 6 percent
• Total budget revenue: VND456.4 trillion
• Trade deficit: 6.5 percent of GDP
• Total social development investment capital: 41 percent of GDP
• Consumer price index: 7 percent
• Job generation: 1.6 million
• Poverty rate: below 10 percent
• Urban housing area per capita: 13.5 sq.m.
• Safe water access: 83 percent in rural areas
• Forest coverage: 40 percent