Finding Solutions to Support Production

Vietnam has witnessed many positive signs of economic growth, according to the report released by the Vietnamese Government. The country’s GDP expanded 4.66 percent in the second quarter of 2012. The GDP climbed 4.38 percent in the first half and is expected to rise in the coming time. However, according to Minister and Chairman of the Government Office Vu Duc Dam, the country’s economy is prone to potential difficulties and challenges in the second half and it needs long-term strategic measures.

 

Although the index of industrial production (IIP) rose 4.5 percent year on year in six months, signs of recovery became clearer. Most industry-driven provinces and cities reported significant growth in industrial production.

 

Exports continued to be a bright spot in the overall economic picture. In the January - June period of 2012, exports valued US$53.1 billion, up 22.2 percent year on year. Total retail sales of goods and services increased by 19.5 percent. Inventory index tended to decrease, from 34.9 percent in March to 32.1 percent in April, 29.4 percent in May and 26 percent in June.

 

The consumer price index (CPI) kept falling during the reporting period. CPI growth accumulated 2.52 percent in the first six months. This is the base to cap inflation growth at 7 - 8 percent this year and create a balance for implementing fiscal and monetary policies aimed at reducing borrowing costs in the remaining months of the year.

 

Remarkably, newly established enterprises outnumbered bankrupt ones. According to the report, 36,200 businesses were established in the first six months while 9,900 units went bust.

 

In a recent regular press briefing on the six-month report, Minister Vu Duc Dam said apart from solutions to address economic difficulties carried out by the Government and by ministries, we need to take long term strategic ones. One suggestion is that the formation of a ministry-level agency in charge of administering State-owned enterprises.

 

The Government is also implementing drastic solutions to accelerate the restructuring of State-run enterprises (SOEs). One suggested measure that drew high public support is the establishment of a super-ministry responsible for administering SOEs. At present, the Government has assigned the Ministry of Planning and Investment to assume this responsibility and it will work with functional institutions to deploy. In the short term, while there is no specialised ministry, SOEs will basically focus on their core businesses and divest from sensitive industries like securities and real estate. Along with that, the State still holds dominant stakes, certainly powers, in these businesses because of overall objectives of the economy.

 

In addition, the Government will also clearly define the responsibility of SOEs and the Finance Ministry, which is accountable for State capital management. Especially, there will be clearer definitions of responsibilities of the suggested ministry in charge of SOE administration in mapping out strategic operating directions of SOEs as well as personnel affairs.

 

Besides, Minister Dam said the Ministry of Finance is developing a plan to establish an agency affiliated to this ministry in charge of State capital in SOEs. "This agency will keep track of SOE performance. It will receive wages from the Ministry of Finance. We will do this in this way,” said Mr Dam.