3:26:38 PM | 7/8/2005
The Vietnamese Government will continue to restructure its banking system to encourage citizens to invest their savings and thereby satisfy the economy’s capital demands, according to the Ministry of Finance.
Minister of Finance, Nguyen Sinh Hung, recently said that increased revenue gained in this way would be invested in key sectors relating to fertilizer, gas and oil, and electricity.
According to the State Bank of
Efforts to encourage investment from citizens and thereby boost credit growth has yielded around VND60 trillion (US$3.8 billion), but bankers believe the potential amount to be reaped from this activity is much greater, with year-by-year increases expected.
Under the restructuring plans, non-State and State-owned enterprises and equitized firms in hydroelectricity, cement production and telecommunications will be able to set up projects to issue bond and stock securities to encourage investment. Banking experts say it will be difficult to boost investment if enterprises cannot create credit for people.
These experts also argue that enterprises should show transparency in their financial activities, particularly the pre-equitization valuation of enterprises. This measure is essential to increase public confidence and thereby attract capital investment.
The State fund for enterprises is currently estimated at VND200 trillion (US$12.7 billion), but the market-based valuation of these can reach between VND300-400 trillion (US$19-25.4 billion).
The experts also said it is necessary to grant favorable conditions to attract foreign investment and open up more undeveloped economic sectors, such as insurance, banking and telecommunications.
If the situation improves they estimate that domestic capital could reach 40 per cent of the nation’s GDP.
VNS
Vietnamese
