Vietnam Business Forum interviewed Mr Nguyen Huy Tuong, Vice Chairman of Hanoi People’s Committee, on price stabilisation policy and price stabilization funds on the sideline of the second meeting of the Hanoi People’s Council. Le Hien reports.
How has Hanoi dealt with price control and market stabilisation?
Hanoi has established an interdisciplinary taskforce to carry out programmes to stabilise prices of essential commodities, issuing Decision 1907/QD-UBND dated April 4, 2011 to approve a programme to stabilise prices of essential goods in 2011. Particularly, in order to ease difficulties for low-income workers and residents, the city allocated VND475 billion for the Price Stabilisation Fund to support selling essential goods in 660 points of sales. To date, it has advanced more than VND300 billion for 11 companies to stockpile goods for the purpose of price stabilisation.
Market authorities have actively inspected and monitored businesses, particularly those benefiting from price stabilisation fund, and agricultural wholesale markets. They have checked 761 units, imposed fines of more than VND750 million on 349 units, and destroyed confiscated goods worth more than VND950 million.
Hanoi also issued Plan No. 16/KH-UBND dated January 24, 2011 on implementing the “For the Rights of Consumers” Action Programme in 2011 in response to the World Consumers Day March 15 and the enforcement of the Law on Consumer Rights Protection of Vietnam from July 1, 2011.
Price-stabilised goods are mainly sold at supermarkets where the poor do not frequently go. What do you think about this reality?
The consumer price index (CPI) eased in July but still stayed as high as 1.21 percent from May, with 10 out of 11 groups of commodities gaining prices (except for telecom services), including three groups climbing over 1 percent, like foods and consumer goods. Therefore, Hanoi is proactively deploying its price stabilisation fund. However, we do not have a proper look for supermarkets, thought to be affordable only for well-to-do people. Indeed, many goods sold at supermarkets are cheaper than outside channels and have clear origins. Hence, we should not see supermarkets as marketplaces for the rich, because they sell all kinds of goods affordable for those in all walks of life. Our problem is now how to expand retail networks to deliver essential goods to all consumers.
Most of the poor live in rural and remote areas. Notably, after localities like former Ha Tay are merged with Hanoi, the number of poor people increases. So, how has the city developed and expanded distribution networks to rural areas?
Forming the price stabilisation fund and organising points of sales of price-stabilised goods is a humanitarian policy for the poor to ease difficulties arising from soaring prices. So, the target is low-income earners. Prices of goods under this programme are 10-15 percent lower than market rates. However, due to few distribution networks in rural and remote areas, the purpose of the programme is not brought into full play.
To cope with this shortage, we told beneficiary companies to coordinate traditional market management boards to assign merchants to sell price-stabilised goods to consumers. Of course, this process will be tightly controlled by the Department of Trade and Industry and the Department of Finance to prevent them from raising prices.
Besides, the city also coordinates with large companies like Hapro to organise trade fairs and vendors to sell goods in suburban districts and industrial parks. To date, Hanoi has organised 11 Vietnamese market days, eight mobile sales campaigns and one market day in industrial parks.
In the future, Hanoi will build suburban supermarkets. Private-run Lan Chi Company has to date opened 10 supermarkets in the suburbs which are selling price-stabilised goods for countryside consumers.
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