This was the first time in many recent years the consumer price index (CPI) was lower than gross domestic product (GDP) with 6.6 per cent versus nearly 8.2 per cent in 2006. However, the post-WTO will be a challenge for emerging Vietnam. Mr Tran Xuan Gia, former chief of the Prime Minister’s Research Committee, answered the press about this issue.
What are your assessments to economic targets of Vietnam in 2006?
At present, all statistical figures are forecasted and the actual figures could not be released as early as March. However, the matter is not the growth rate of 8.2 per cent or 8.5 per cent or higher but the difference of the 2006-2010 development targets, which we set in all three aspects of economy, society and environment. In fact, the social and environmental aspects have more assessment criteria than economic criteria. Therefore, the development assessment must be based on all these three aspects.
In my opinion, economic targets are basically realised in 2006 but the two other aspects had few progresses. Particularly, most of 18-20 social criteria and the similar number of criteria for environment were out of reach.
We must pay attention to the harmonious development between the economic growth with social progress and equality, poverty reduction and especially education. Education is one of our worst achievements in the year although it is impossible to assess an education with facts collected in only one year.
How do you assess the record amount of FDI and ODA capital in 2006?
We should understand the reality of announced communications. For example, the foreign direct investment (FDI) of over US$10 billion or official development assistance (ODA) of over US$4.4 billion are only promises. Particularly, the over US$10 billion FDI capital consists of 75 per cent coming from fresh projects and 25 per cent from operational projects. And this is of our concerns. Only the capital increase by existing projects in 2006 is real while the others are only a promise. Even the US$4.4 billion ODA capital needs a disbursement roadmap; therefore, many agreements were signed in 2006 but the money will be possibly in hands after 2010. In fact, the disbursement of the ODA capital has never exceeded 50 per cent of the sum pledged by international donors.
However, this is effort of many years. For example, the Asian Development Bank normally pledged to sponsor US$700 million a year to Vietnam but it raised the sponsorship to US$1.1 billion at the Consultative Group meeting in 2006. This showed that Vietnam had prepared for 3-4 years because ADB only lent project-based mechanism.
As a researcher, I think our most concern now is not how to mobilise capital but how to use the capital in the most efficient way. This is a hard work for Vietnam because it has been well-known for incomplete and inefficient expenditures.
Do you think Vietnam is very successful in controlling inflation?
No one wants inflation but they cannot eliminate it. The controllable inflation exists in three states: higher, equal or lower than the economic growth. At present, it is successful in keeping the inflation rate below the economic growth. This success is originated from subjective and objective factors. However, if the inflation rate is higher than the economic growth rate in some years, it is not a disaster.
How do you assess the quality of the growth of Vietnam?
Many countries in the world assess the quality of growth based on six aspects: economics, society, environment, culture, human development and democratic promotion but we are using three first aspects. In reality, the growth rate is the condition to improve the quality, not the decision to the growth quality of an economy. At present, we are now not focusing on the quality of development but the quantity.
I myself think that we should not be satisfactory too early when the total social investment in 2006 exceeded 40 per cent of GDP, verging on the limit of 43-44 per cent of GDP. It is time we relied on sciences, technologies, productivity and economy to increase efficiency.
To increase the economic efficiency, how will Vietnam need to do to resolve disbursement matters?
At present, our disbursement rate is 14 -15 per cent a year on average and each project lasts around six years. Such as disbursement rate is low. Many think that such a low rate is good because we are a debtor from the date the disbursement is made. However, we borrow money to build infrastructure projects such as roads, bridges and power plants and the slow disbursement means our projects will operate late. It is a problem because a six-year disbursement plan means that a road needs more than six years to complete. Furthermore, the preferentiality is reduced gradually. For example, a loan with a grace period of 10 years disbursed in the 9th year means we have only one preferential year, even we have no preferentiality in case of disbursement in the last year.
Nowadays, there is no better way than the reform of administrative procedure and economic mechanism to quicken the implementation of any project. My current most concern is the policy of investment decentralisation. This is a good track but the decentralisation needs a good planning, good personnel, a good appraisal and others. However, we have not fully prepared.
Thi Van
Vietnamese
