Economic forum develops practical solutions for 2014

Significant progress

Participants at the April 28-29 forum in Quang Ninh province shared the view that the economy has weathered the storm and begun to see positive improvements.

The GDP growth rate increased in a quarterly basis; inflation was kept at a low level; Quarter 1 ended with a US$1 billion trade surplus; and the foreign currency market remained stable.

Industrial production began to pick up, with an increasing number of businesses resuming operation and new businesses registering for the first time. Thanks to low interest rates, more businesses are now accessible to bank loans to maintain production.

All the same, many experts were quick to caution that many challenges are still lying ahead. They cited low aggregate demand as a key factor that affects the health of the economy, especially private businesses.

Nguyen Van Giau, Chairman of the National Assembly Committee for Economic Affairs, pointed out that State employee incomes have stagnated and have not increased over the past two years, showing the aggregate demand of the society is rather low.

Experts at the forum also discussed market difficulties, including a lack of adequate policies for implementing a VND30,000 billion stimulate package for the real estate market and the thorny problem of not adequately dealing with non-performing loans.

They agreed that economic restructuring that began a year ago has not met expectations, especially for State-owned enterprises and big economic groups.

Although the public debt is within safe limit approved by the National Assembly, it still remains high. It is important for the State to balance budget to pay debts and ensure expenditure structure to promote economic development.

The State has issued a large amount of bonds, 80% of which have been bought by credit organisations, slowing down capital for production and trading.

The forum also dealt with many other social issues, including labour, employment, education reform, epidemics, and unemployment

Urgent solutions

Experts proposed that the government mobilise all resources to address pending issues, with a primary focus on economic restructuring, especially in agriculture.

They underlined the need to put FDI allocation under the microscope, giving priority to essential areas and products of higher added value.

Some experts proposed introducing a more flexible exchange rate policy to fuel economic growth, supporting businesses in accessing market, and evaluating the comprehensive impact of the new integration process, taking into account Vietnam-EU Free Trade Agreement negotiations, the establishment of the ASEAN community in 2015 and Trans-Pacific Partnership (TPP) agreement negotiations.