Progress made in 2014 can be the foundation for a robust economicrecovery in 2015, Vuong Dinh Hue, Chairman of the Central EconomicCommission, tells Nong thon ngay nay (Countryside Today).
*What were the economic bright spots for us in 2014?
Therewere three bright spots. Our macro-economy remained stable anddeveloped steadily while inflation was much lower than the target set bythe National Assembly. In 2014, our GDP was 5.98, the target set by theNational Assembly.
Secondly, our monetary and financial marketsituation in 2014 was much better than in 2013. An indication of thiswas the reduction in interest rates for both deposits and loans. Inaddition, the exchange rate between Vietnamese dong and US dollar wasrather stable, pushing up exports and boosting business confidence.
Another bright spot was the success of our economic restructuring process.
*What is the current status of our economic restructuring process?
I will focus on three major issues – the restructuring of State- owned enterprises, the banking system and public investment.
In2014, the SOE restructuring focus had two main prongs - equitisationand withdrawal of capital from non-core businesses. According to aNational Assembly report, in the first 10 months of 2014, the capitalwithdrawal from non-core businesses was 3.5 times higher than in 2013,and the number of big SOEs successfully equitised was also higher.
Thanksto timely restructuring efforts, Vietnam was able to push back theimminent bankruptcy of our banking system. As a result, our paymentssystem became stable and served as a catalyst in restoring production.In 2014, we gained initial success in handling bad debt.
In 2014,we took the right course in restructuring our public investment. Asignificant success was the efficient use of capital investment.
*How do you assess our 2014 performance compared to other countries in the region and beyond?
Ourcredit ratings by Moody jumped from B1 to B2. Fitch Ratings raised therating of our internal and external debts from B+ to BB-. The ratingswere based on four criteria – an increase in our GDP compared withcountries in the same group; a reasonable reduction in credit growth;inflation being under control; and a higher rate of public investmentcompared with countries in the same group.
*What are the challenges facing Vietnam in 2015?
Wewill continue to face the same challenges as 2014, particularly theissues of balancing the budget, energy and national food security.
Anotherchallenge would be the slow recovery of domestic demand. In addition,enterprises are still facing many difficulties. According to the GeneralDepartment of Tax Administration, just 30 percent of enterprisesoperating in the country have posted profits.
The other challengewe cannot ignore is high public debt. We'll have to borrow money toservice it. At a recent meeting, the National Assembly spent quite a lotof time discussing this issue.
*So what should be our focus for 2015?
This year, the world economy will continue to recover. However, quite a few countries face many challenges.
Iwould say 2015 is a very important year for us as it is the last yearof our latest national five-year plan. All provinces and cities aretrying their best to achieve socio-economic targets.
In addition,2015 will also be the year that negotiations on many free tradeagreements are concluded and when other agreements come into force.These agreements will become important catalysts for growth andinternational integration.
Also in 2015, many of our new lawswill come into force, including those relating to business andinvestment environment, like the Law on Enterprises, the Law onInvestment and the Law on the Use of State Capital in Enterprises.Hopefully, these laws will breathe new life into the national economy.
*Do you think the drop in world oil prices will affect our economy significantly?
Vietnamis both an oil importer and exporter. So no doubt, when the oil pricesdrop, it will hurt our crude oil revenues. However, we have developedseveral scenarios to cope with the situation.
As an oil importer,we'll also have some benefit. We can say that the recent reductions inpetroleum and diesel prices in the past months have positively affectedthe lives of citizens.-VNA
*What were the economic bright spots for us in 2014?
Therewere three bright spots. Our macro-economy remained stable anddeveloped steadily while inflation was much lower than the target set bythe National Assembly. In 2014, our GDP was 5.98, the target set by theNational Assembly.
Secondly, our monetary and financial marketsituation in 2014 was much better than in 2013. An indication of thiswas the reduction in interest rates for both deposits and loans. Inaddition, the exchange rate between Vietnamese dong and US dollar wasrather stable, pushing up exports and boosting business confidence.
Another bright spot was the success of our economic restructuring process.
*What is the current status of our economic restructuring process?
I will focus on three major issues – the restructuring of State- owned enterprises, the banking system and public investment.
In2014, the SOE restructuring focus had two main prongs - equitisationand withdrawal of capital from non-core businesses. According to aNational Assembly report, in the first 10 months of 2014, the capitalwithdrawal from non-core businesses was 3.5 times higher than in 2013,and the number of big SOEs successfully equitised was also higher.
Thanksto timely restructuring efforts, Vietnam was able to push back theimminent bankruptcy of our banking system. As a result, our paymentssystem became stable and served as a catalyst in restoring production.In 2014, we gained initial success in handling bad debt.
In 2014,we took the right course in restructuring our public investment. Asignificant success was the efficient use of capital investment.
*How do you assess our 2014 performance compared to other countries in the region and beyond?
Ourcredit ratings by Moody jumped from B1 to B2. Fitch Ratings raised therating of our internal and external debts from B+ to BB-. The ratingswere based on four criteria – an increase in our GDP compared withcountries in the same group; a reasonable reduction in credit growth;inflation being under control; and a higher rate of public investmentcompared with countries in the same group.
*What are the challenges facing Vietnam in 2015?
Wewill continue to face the same challenges as 2014, particularly theissues of balancing the budget, energy and national food security.
Anotherchallenge would be the slow recovery of domestic demand. In addition,enterprises are still facing many difficulties. According to the GeneralDepartment of Tax Administration, just 30 percent of enterprisesoperating in the country have posted profits.
The other challengewe cannot ignore is high public debt. We'll have to borrow money toservice it. At a recent meeting, the National Assembly spent quite a lotof time discussing this issue.
*So what should be our focus for 2015?
This year, the world economy will continue to recover. However, quite a few countries face many challenges.
Iwould say 2015 is a very important year for us as it is the last yearof our latest national five-year plan. All provinces and cities aretrying their best to achieve socio-economic targets.
In addition,2015 will also be the year that negotiations on many free tradeagreements are concluded and when other agreements come into force.These agreements will become important catalysts for growth andinternational integration.
Also in 2015, many of our new lawswill come into force, including those relating to business andinvestment environment, like the Law on Enterprises, the Law onInvestment and the Law on the Use of State Capital in Enterprises.Hopefully, these laws will breathe new life into the national economy.
*Do you think the drop in world oil prices will affect our economy significantly?
Vietnamis both an oil importer and exporter. So no doubt, when the oil pricesdrop, it will hurt our crude oil revenues. However, we have developedseveral scenarios to cope with the situation.
As an oil importer,we'll also have some benefit. We can say that the recent reductions inpetroleum and diesel prices in the past months have positively affectedthe lives of citizens.-VNA
