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Market economy and State management

In Uncategorized on December 21, 2010 at 9:29 am




Market economy and State management


QĐND – Monday, December 20, 2010, 21:49 (GMT+7)

Vietnam’s socialist-oriented market economy has been operating according to both the market mechanism and administrative regulations.


In early 2010, while the world economy was still in a fix to bounce back, the Vietnamese Party, National Assembly and Government worked out solutions to help the national economy recover from the global economic slowdown. 


Methods included tightening public expenditure, implementing a stimulus package, increasing exports, encouraging domestic consumption, and improving social welfare, which helped stabilize the country’s socio-economy.


Over the past year, the prices of gold and foreign currency have seen fluctuations due to not only the world’s law of supply and demand but also speculation and rumours in the domestic market.


To deal with the problems, the State bank of Vietnam (SBV) introduced effective policies to clean up the gold trading market by allowing gold import, reducing gold import taxes, adjusting exchange rates, and publicizing the national foreign exchange reserve. These policies helped reduce the gold price instability and stabilize the price of foreign currency.


At the end of the year, while the Government is making every effort to curb inflation, many commercial banks joined a race to increase interest rates, creating a more complicated situation in the banking sector.


In response to the banks’ decisions, the Government and SBV imposed administrative measures to control the race. The Ministry of Finance and Industry and the Ministry of Industry and Trade also took the initiative to control prices by deciding not to raise prices of coal, electricity, petrol and oil until the Lunar New Year Festival.


Over 2010 many lessons were learned from the management of the socialist-oriented market economy.


Firstly, the socialist-oriented market economy offers an option for the Government to use policy to intervene in specific economic issues, making the economy more transparent, in accordance with the law of supply and demand. All experts and strategists need to do is to analyse the situation and propose effective measures to the Government.


Secondly, as important social and political events are about to take place in Vietnam and the Lunar New Year Festival is drawing near. Vietnam needs to be more active in stabilizing prices and introducing administrative measures to prevent price fever.


Thirdly, the Government should keep a close watch on the market to introduce proper policies. For example, the price-stabilising fund should be used to help businesses reserve commodities to meet consumer demand in both urban and rural areas.


Fourthly, the market management policies should be transparent and consistent to enhance social unanimity.


Lastly, Vietnam should uphold the active role of mass media to help stabilise the market by providing information and analyzing the market situation, as well as pointing out the deception of those who want to play on the market. This will also help minimize the negative impact on the market created by the mass media.


Despite being adversely affected by the world’s economic downturn and Europe’s debt crisis, Vietnam is expected to see a significant economic growth rate in 2010 with foreign investment remaining high. These achievements are attributed to the State’s effective management of the economy based on the law of the market.


Source: VOV


Source: QDND

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Many countries commit to helping Vietnam in developing low carbon economy

In Uncategorized on December 16, 2010 at 9:48 am

Northern Europe countries and Japan had undertaken to choose Vietnam to pilot the programs to develop low carbon economy, the representative of the Ministry of Agriculture and Rural Development said at a press conference on December 14.

Norway pledged a support package of US$100 million for the Reducing Emissions from Deforestation and Forest Degradation program (REDD) of Vietnam.


Besides, the meeting between high officials in agriculture, food security and climate changes and the chairman of World Bank, Prime Minister of Thailand, and the US Agriculture minister had raised $4.5 billion for REDD program and $6.5 billion for the climate change funds.


The press conference was held to report the activities of Vietnamese delegation at the sixteenth Conference of the Parties of the United Nations Framework Convention on Climate Change in Cancun, Mexico, from November 29 to December 10.

Source: SGGP

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Fluctuation on interest rates hits economy

In Uncategorized on November 22, 2010 at 10:14 am

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Japan’s economy expands in Q3, but risks remain

In Uncategorized on November 15, 2010 at 6:30 am

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National economy still lacks firm stability

In Uncategorized on November 7, 2010 at 4:50 pm

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Japan firms profit from emerging economy demand: report

In Uncategorized on October 31, 2010 at 11:11 am

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National economy continues growing steadily

In Uncategorized on October 13, 2010 at 7:53 am

Vietnam’s economy will be stronger in the last months of this year and the country’s GDP is likely to reach 6.5 percent as targeted, or higher, said the Government.

Shoppers at a Co.op Mart supermarket in Ho Chi Minh City. This year’s CPI is likely to stand at around eight percent, the government says. (Photo: SGGP)

The optimistic forecast was made at the cabinet’s monthly meeting for July held on August 3-4 in Hanoi to review the first seven months and discuss talks for the rest of 2010.


The consumer price index (CPI) in July increased just 0.06 percent from June, the lowest rate so far this year.

The seven-month export turnover was US$38.8 billion, up 17.5 percent from a year earlier, with 10 export items bringing in sales of over US$1 billion each. Meanwhile, trade deficit fell to US$7.4 billion, accounting for 19.45 percent of the total export earnings.

Industrial output between January and July has increased by 13.5 percent over the same period last year.


Based on such developments, total export earnings this year may raise by 17 percent while the trade deficit rate may reduce to less than 20 percent, with the CPI likely to stand at about 8 percent.


The performance revealed that all the three goals recently set by the Government have been met, including maintaining the GDP growth at 6.5 percent, keeping the macro-economy stable and improving social security, said Standing Deputy Prime Minister Nguyen Sinh Hung at a press conference held by the Government yesterday.


He also said that the inflation has declined for two consecutive months and that the Government would take measures to stabilize prices for milk and medicine.  


In addition, the Government will apply flexible policies to the prices of petrol and oil, as one of the efforts to restrain the inflation rate to 7-8 percent this year, he said.


He also forecast that the State budget deficit would be not more than six percent this year.


He asked the Finance Ministry to work with other ministries and local authorities, especially Hanoi and Ho Chi Minh City, to prevent speculation and the unreasonable marking up prices for goods, particularly milk and medicine.


He also ordered relevant agencies to tighten controls over the price of medicine at hospitals.

Source: SGGP

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World No. 2 economy ‘still developing’, says China

In Uncategorized on August 17, 2010 at 11:22 am

China on Tuesday hailed the country’s economic might after it overtook world number two Japan in the second quarter but said it still had tens of millions of people living in poverty.


Thirty years after opening its doors to the world, China has claimed the titles of world’s biggest exporter, auto market and steelmaker in recent years.


Many expect China will this year become the world’s number two economy, just behind the United States — taking the title Japan has held for 40 years and underscoring its emergence as an economic force.


While China has for years stormed ahead with double-digit expansion in gross domestic product, Japan’s growth rates have been comparatively low.


On Monday, Japanese data showed that while Tokyo stayed ahead of its Asian rival in the first half, its second-quarter GDP was smaller than China’s.

File photo shows workers at a hi-tech factory in Shenzhen, southern China’s Guangdong province.

But a commerce ministry official pointed out that in per capita terms, China lags far behind its rivals, and has a long way to go to becoming a world-class power.


“We should not only care about GDP data but also more importantly should pay attention to the per capita figures,” commerce ministry spokesman Yao Jian told reporters at a regular briefing.


He said China’s per capita GDP was 3,800 dollars, around 105th in the world, and added that 150 million of the country’s 1.3 billion people live below the poverty line, according to UN standards. Japan’s per capita GDP is more than 10 times that of China.


“The quality of China’s economic growth still needs to be improved, no matter whether it is in terms of people’s quality of life or in terms of science, technology and environmental protection,” the spokesman said.


“We still have an enormous gap to make up.”


The country’s newspapers insisted that China, while contributing to global growth and helping to drive the world’s recovery from the financial crisis, was still transforming itself into a world-class economic power.


“China’s economic strength is also still at the level of a developing nation. So the world’s second-largest economy is not the equivalent of the second-largest economic power,” the People’s Daily said in a commentary.


In just three decades, China has leapfrogged Britain, France and Germany on its economic ascent and has won developing countries a bigger say in the World Bank and International Monetary Fund.


However, the official China Daily said in an editorial: “The Chinese economy still has a lot more room to grow and can contribute even more to the global recovery.


“But for those who expect China to assume greater international responsibilities just because of the size of its economy, they should take a hard look at the enormous development challenges that the country still faces.”


A columnist for the People’s Daily, Li Hong, offered an optimistic outlook, claiming China could overtake the United States in 15-25 years.


“Our ultimate goal is, naturally, to reach the pinnacle by surpassing the United States and, once again, becoming the largest economy,” Li wrote in the paper, the mouthpiece of the ruling Communist party.

Source: SGGP

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National economy continues growing steadily

In Uncategorized on August 5, 2010 at 11:19 am

Vietnam’s economy will be stronger in the last months of this year and the country’s GDP is likely to reach 6.5 percent as targeted, or higher, said the Government.

Shoppers at a Co.op Mart supermarket in Ho Chi Minh City. This year’s CPI is likely to stand at around eight percent, the government says. (Photo: SGGP)

The optimistic forecast was made at the cabinet’s monthly meeting for July held on August 3-4 in Hanoi to review the first seven months and discuss talks for the rest of 2010.


The consumer price index (CPI) in July increased just 0.06 percent from June, the lowest rate so far this year.

The seven-month export turnover was US$38.8 billion, up 17.5 percent from a year earlier, with 10 export items bringing in sales of over US$1 billion each. Meanwhile, trade deficit fell to US$7.4 billion, accounting for 19.45 percent of the total export earnings.

Industrial output between January and July has increased by 13.5 percent over the same period last year.


Based on such developments, total export earnings this year may raise by 17 percent while the trade deficit rate may reduce to less than 20 percent, with the CPI likely to stand at about 8 percent.


The performance revealed that all the three goals recently set by the Government have been met, including maintaining the GDP growth at 6.5 percent, keeping the macro-economy stable and improving social security, said Standing Deputy Prime Minister Nguyen Sinh Hung at a press conference held by the Government yesterday.


He also said that the inflation has declined for two consecutive months and that the Government would take measures to stabilize prices for milk and medicine.  


In addition, the Government will apply flexible policies to the prices of petrol and oil, as one of the efforts to restrain the inflation rate to 7-8 percent this year, he said.


He also forecast that the State budget deficit would be not more than six percent this year.


He asked the Finance Ministry to work with other ministries and local authorities, especially Hanoi and Ho Chi Minh City, to prevent speculation and the unreasonable marking up prices for goods, particularly milk and medicine.


He also ordered relevant agencies to tighten controls over the price of medicine at hospitals.

Source: SGGP

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Restructuring the national economy

In Uncategorized on July 31, 2010 at 7:18 pm




Restructuring the national economy


QĐND – Saturday, July 31, 2010, 21:30 (GMT+7)

Restructuring the national economy will play a decisive role in helping Vietnam achieve steady and sustainable growth, says Prime Minister Nguyen Tan Dung.


According to economists, restructuring the product categories should focus on giving priority to core products and avoiding failures made by other sectors, such as the automobile industry. The lack of viable support industries has led to a low percentage of domestic inputs. Vietnam does not yet have good support industries for its key export items, such as garments and textiles. The country needs to develop support industries for core products in the future.


Currently, the industrial sector does not have close links with the agricultural sector. Vietnam has to import most inputs for the agricultural sector, such as agricultural materials and machines. This is a huge loss for the industrial sector as it cannot build large rural areas into its domestic consumption market.


Regarding the agricultural sector’s outputs, Dr. Dang Kim Son, Head of the Institute of Strategy and Policy for Agriculture and Rural Development, says that half of Vietnam’s annual agricultural produce is exported but about 90 percent of them are raw products without trademarks. If the country applies new technology for processing coffee, rice and rubber, it will create a modern processing industry and agricultural outputs will become a positive factor in boosting the local industrial sector, he says.


For many years, Vietnam has made full use of its human resources to achieve a high economic growth rate but its Incremental Capital Output Ratio (ICOR) remains low in comparison with other developing countries in the region.


Dr. Nguyen Duc Thanh, Director of the Vietnam Centre for Economics and Policy Research (VEPR) under the University of Economics – Vietnam National University, says it is essential to mobilise different kinds of local resources to full advantage. However, if the country does not have strict mangement and inspection mechanisms, its national resourses will be wasted.


Mr. Thanh cites the link between industrial zones in Hanoi and those in Bac Ninh as a case in ppint. While Bac Ninh province has spent a lot of money on upgrading infrastructure, Hanoi is still reluctant to invest in major infrastructure projects for fear that investors will move to Bac Ninh on account of lower input costs there. Long An province and Ho Chi Minh City also face a similar situation. Other typical examples of wasting national resources could be seen in a number of provinces and cities which focus on building seaports and airports, as well as in the steel and cement sectors.


Vu Thanh Tu Anh, Director of the Fulbright Economics Teaching Programme, argues the inappropriate distribution of resources in different sectors in recent years has resulted in an unbalanced economy.


According to latest statistic figures the state owned economic sector contributes 34 percent of the GDP and makes up more than 33 percent of the total capital for social investment while using only 9 percent of the country’s total workforce. In the private sector these figures are 47 percent of the GDP, 32 percent of the total capital for social investment and 87 percent of the workforce.


The state-owned economic sector has enjoyed preferential treatment in terms of capital and real estate but its performance is remarkably inefficient by comparision with the private sector. Therefore, latter should be paid more attention.


In recent years, foreign direct investment (FDI) has been a major factor behind Vietnam’s economic development, however, the country should work out a suitable strategy to attract more FDI and make full use of it.


According to Nguyen Mai, Chairman of the Foreign Invested Business Association, Vietnam has so far disbursed US$60 billion of its FDI capital but the country only receives about US$1.5 billion from these businesses. The figure is too small in comparision with the priorities of land and natural resources that the FDI businesses receive. Another thing to be considered is that the FDI investors concentrate too much on land and real estate.


Former Deputy Prime Minister Vu Khoan stresses that the country’s economy is facing 3 inter-connected objectives. In the short run, Vietnam has cope with the impact of the global financial crisis and economic recession. In the middle-term, the country should catch up with new opportunities and deal with the challenges of the post-crisis period, while in the long run Vietnam should prepare for a 10-year socio-economic development strategy for 2011-2020.


The country needs to clarify the details of economic restructuring and focus on the quality of development. To support economic restructuring through renovating of development models, Vietnam should adjust its strategy to attract foreign investment giving priority to manufacturing, support industries, and high value added products as well as promoting cooperation between domestic businesses and foreign investors.


The Head of the Vietnam Economic Institution, Tran Dinh Thien, says that the country should basically change its domestic production structure to focus on higher added value industries. There should be a long term strategy of 5-10 years to form a national economic structure with such industries as its backbone. There should also be a transition period (2011-2013) before changing to the new development model. The renovation should occur in every aspect of the economy.


The premises for economic restructuring should also be considered, including forming a comprehensive mechanism for the market economy in line with administrative reform; developing the technology market; creating a fair competitive environment for all economic sectors; abolishing monopolies and developing high quality human resources.


The country’s future development should create a breakthrough in its productivity supported by skills and technology. Restructuring must be undertaken systematically and receive the support of the whole society.


Source: VOV


Source: QDND