In a report delivered on the opening day of the National Assembly session in Hanoi on October 16, Prime Minister Nguyen Tan Dung reviewed the major achievements of the national economy in the past nine months. He pointed out difficulties and challenges facing the country in the reviewed period, including high inflation and low economic growth, as a consequence of the global economic recession and financial crisis.

High growth despite high inflation

With the strong political commitment and joint efforts by the entire Party, people, army and businesses, Vietnam has initially surmounted difficulties and made important advances. The Government has adopted major solutions to curb runaway inflation and stabilise the macro economy, including applying a tight monetary policy, boosting production and exports, reducing imports and the trade deficit, and keeping a close watch on market prices.

As a result, these solutions have begun to take effect, said Mr Dung. The national economy has enjoyed a comparatively high growth despite high inflation. The GDP growth rate reached 7.38 percent in the first quarter, 5.85 percent in the second quarter and 6.55 percent in the third quarter, and is expected to stay between 6.5 and 7 percent by the end of this year.

The Government has spent VND19.8 trillion supporting beneficiaries of social welfare policies, an increase of VND14.7 trillion against the whole of the 2007 figure. It has also provided free of charge more than 40,000 tonnes of rice for people in natural disaster-stricken areas and reduced and/or exempted water irrigation fees, as well as other fees for farmers. The Government has spent VND28.9 trillion on salary adjustments for State employees, pensioners and social welfare policy beneficiaries.

More progress has been made in education and training in terms of scale and quality. So far 46 provinces have completed the universalisation of secondary education, an increase of 7 provinces compared to 2007. Universities have begun to develop curricula on business demand.

Meanwhile, the healthcare system has been developed, particularly at the district level, helping to ease burdens on provincial and central hospitals. To date, 100 communes and wards and 84.5 percent of villages have medical workers, 98.2 percent of communes have healthcare centers, 70 percent of communes have doctors and more than 70 percent of communes have provided primary healthcare services for medical insurance cardholders.

Progress has also been seen in administrative reforms, thrift practice, and the fight against corruption and waste. Many ministries and provinces have applied the one-stop shop mechanism and worked on Saturdays to serve residents.

Foreign relations affairs and foreign economic cooperation have brought encouraging results, thereby lifting Vietnam’s position on the world arena. For the first time Vietnam assumed the presidency of the United Nations Security Council in July and fulfilled its tasks, receiving high acclaim from the international community.

Regarding work on Vietnamese nationals residing overseas, Vietnam has established a Vietnamese citizen protection fund, offered visa exemptions, implemented a Teaching Vietnamese programme for young Vietnamese nationals, facilitated their purchase of housing, and proposed revising the Citizenship Law in favour of Vietnamese nationals abroad.

Vietnam has better carried out its ethnic and religious policies in respect for people’s right to freedom of religion and belief, while strictly dealing with law-breakers.

Major weaknesses

PM Nguyen Tan Dung also pointed out major weaknesses in the national economy, including high inflation and trade deficit, unsteady macro-economic balance, low economic competitiveness and low economic growth. According to the PM, the soaring prices of commodities have affected the living conditions of the majority of people, especially low-income earners, the poor and those living in remote and natural disaster-stricken areas. Administrative reforms, thrift practice and the fight against corruption and waste have not lived up to the Government’s expectations. Political security and social order in several localities have remained complicated.

He spoke of several lessons that the Government has learned in the past months. They include (i) bringing into full play the combined strength of the entire political system and people in curbing inflation, stabilizing the macro economy and maintaining a steady growth, (ii) consistently pursuing the market economic mechanism under State management, and (iii) paying attention to forecasts and analysis of the domestic and global economic situation to cope with any fluctuations.

The PM stressed the need to increase the quality of growth and the competitiveness and sustainability of the economy during the development process.

Keeping inflation under control

The Government leader said in 2009, priority will be given to curbing inflation, minimising the negative impact of the global financial crisis and economic recession, stabilising the macro economy and maintaining a steady growth.

To this end, Mr Dung pointed out six major tasks as follows:

-          Effectively implementing monetary and financial policies, import-export activities, increasing the safety level of the financial and banking system, reducing the inflation rate to below 15 percent in 2009 and to a one-digit figure in 2010.

-          Better implementing current policies and issuing new ones in favour of social welfare and poverty reduction projects, and continuing to develop cultural, social and environment affairs.

-          Fully exploiting the country’s potential, effectively increasing international cooperation, striving to achieve a 7-percent GDP growth rate by rapidly developing the private economic sector, increasing the efficiency of the State-owned business sector and improving the quality of foreign investment.

-          Paying special attention to the sustainability and quality of growth by increasing the efficiency of planning and investment, applying scientific and technological advances, saving materials and energy in production, and increasing the competitiveness of products, businesses and the national economy as a whole.

-          Developing agricultural production and rural affairs, boosting the shifting of the economic structure in agricultural and rural affairs, improving the physical and material lives of farmers, and finally, 

-          Removing “bottlenecks” in growth to facilitate production and attract investment, increasing the quality of human resources.

Major ambitious targets for 2009

-          GDP: up 7 percent

-          Total export value: up 18 percent

-          Total development investment capital: VND725 trillion (40 percent of GDP)

-          Budget collection: VND418 trillion (up 4.76 percent)

-          Budget spending: VND509.4 trillion (up 7.4 percent)

-          Budget deficit: VND87.3 trillion (4.8 percent of GDP)

-          Consumer price index: below 15 percent

-          Secondary education universalisation: 55 provinces

-          Tertiary enrolments: up 11.4 percent, vocational training enrolments: up 18 percent

-          Birth rate: down to 0.2 %o

-          Job generation: 1.7 million

-          Poverty reduction: down to 12 percent

-          Malnutrition rate for U5 children: down to 19 percent

-         Housing acreage per capita in urban areas: 12.2 sq.m.

-          Water supply: 79 percent of people in rural areas, 85 percent in urban areas

-         Forest coverage: 40.5 percent