"Vietnam’s Economy Will Grow on Inflation-controlled Foundation”

The prestige and roles of VCCI in trade promotion activities has been substantiated to the Vietnam business community, the Government and international organisations in the past nearly 50 years. Since Vietnam joined the World Trade Organisation (WTO), VCCI has presented its active roles in assisting businesses to expand relationship, cooperation and partnership with foreign partners in all fields.

 

Trade promotion centres on export and domestic trade:

 

- In export promotion, VCCI identifies eight key markets, namely the United States, Europe, China, Japan, ASEAN, India, Africa, and the Middle East - South Asia. Successful trade promotion success in these markets will help complete export targets in 2012. According to statistics, Vietnam’s exports to these markets increase 23.5 percent a year on average. Some Asian countries are becoming more important to Vietnam’s export with average annual growth of 26.3 percent.

 

- The second orientation of the National Trade Promotion Programme is to maintain and develop the domestic market.

 

In addition, trade promotion activities should focus on supporting businesses to set up and develop distribution channel systems from production areas to consumption areas in Vietnam, including border zones, mountainous areas, and islands. They should also centre on accelerating cross-border trade with neighbouring nations, organising regional trade fairs for all economic sectors to introduce products and services to customers.

 

The Resolution 09 of the Politburo not only recognises the role and position of Vietnamese businesspeople but also expresses the care of the Party to them. This serves as a guideline for Vietnamese enterprises and entrepreneurs to become a driving force of social and economic development in the context of deeper international economic integration and extensive competition.

 

Since the advent of the Resolution, VCCI has informed and disseminated its contents to the business community and entrepreneurs, helping them understand and have more impetus to contribute to national economic development. However, as a bridge for Vietnamese businesses, VCCI needs to strengthen contact with industry associations to quickly grasp information and actual difficulties of enterprises to put forth practicable solutions in their favour to the Government. VCCI also needs to organise more training courses to help Vietnamese enterprises to broaden knowledge of international trade rules and laws, create favourable conditions for business associations in the country to exchange and acquire experiences from other countries world.

 

VCCI necessarily promotes arbitral roles in settlement of conflicts and disputes among enterprises, between businesses with the State and between enterprises with their workers; strengthens legislation and associative activities to create new business opportunities for domestic business community to develop. Apart from trade promotion, business trip organisation and business opportunity exploration, VCCI needs to further improve the quality of activities, create best conditions for enterprises to promote their available potentials and extend their arms to regional and international markets.

 

Although most forecasts show agree on a challenging year of 2012 against the Vietnamese economy, I believe that the Government will have right decisions and policies to help Vietnamese economy to develop sustainably. Currently, the Government has plans for macroeconomic stability in association with comprehensive restructuring and reform for at least two years to come. In the current period, economic restructuring is the centre of attention because this is an essential and fundamental for economic stability and sustainability.

 

Specially, financial market restructuring, with priority given to commercial bank and financial institution development, nonbank credit will pace up the restructuring of enterprises, export markets, and domestic market. Therefore, with external economic context as well as internal structure of Vietnamese economy, I think it will grow on inflation-controlled foundation. However, to achieve this objective, Vietnam needs to pay special attention to enhancing financial capacity, governance and risk management and improving operational efficiency of banks.

 

Last year witnessed a lot of reform actions of the State Bank like implementing synchronous and drastic monetary measures and macro policies to regulate interest rates, tighten money supply, and stabilise foreign exchange market. Recently, the State Bank decided to reduce deposit rate ceilings, paving the way for lowering lending rates. This has caused positive impacts on business sentiment and domestic and foreign investors. Besides, I think that this move is right and appropriate to help businesses to surmount difficulties. For credit institutions, the easing of monetary policy will also help them open up many cooperation opportunities for enterprises.

 

In my opinion, interest rates should be reduced on a detailed roadmap to avoid economic shocks and improve the liquidity of credit institutions. However, the Government and the State Bank of Vietnam necessarily continue with strong controlling measures to ensure absolute compliance of banks and financial institutions, and prevent unfairness in attracting deposits. In addition, the central bank should issue appropriate policies to regulate interbank market, bring the market to the right orbit, restore the confidence of credit institutions, clear capital sources for the market, and thus accelerate capital turnover in the banking system.

 

Although the rate cut by the State Bank of Vietnam has invigorated the financial market, it also has certain drawbacks. Too quick rate reduction can raise new pressures on Vietnamese dong, reduce the effective efforts of macroeconomic stability, threaten the trust of investors and consumers, and weaken foreign exchange reserves. Besides, repeated and quick reduction may intensify pressures on inflation and slow down economic growth.

 

SeABank has achieved comprehensive development steps in the past five years thanks to the close guidance of the Board of Directors, the close supervision of the Supervisory Board, the flexible operation of the Board of Management, the strong support and close cooperation of partners and domestic and foreign strategic shareholders, specially foreign strategic shareholder Société Générale and domestic strategic shareholders Mobifone and PVGas, and the effort of more than 2,200 employees. SeABank is one of a few banks not violating standards imposed by the central bank. Hence the bank is always rated Grate A by the central bank. In addition, SeABank is powered by a modern IT system. The Corebanking system was invested very soon and operated very effectively. Thus, in the past year, SeABank was recognised as one of five banks with best IT application in Vietnam. SeABank is the only joint stock bank to be awarded this title. On that solid foundation, SeABank is honourably selected to serve ODA projects in Vietnam and is proudly rated the Group 1 bank - banks with healthy operations - and granted a credit growth quota of 17 percent in 2012.