Ho Chi Minh City Determined to Maintain Sustainable Growth

4:33:42 PM | 15/5/2009

Ho Chi Minh City’s contribution to the general image of Vietnam is really significant after 34 years of liberation. During the past years, especially after 20 years of Doimoi, the economic growth pace of HCM City has always been 1.5-1.6 times greater than that of the overall country. In 20 recent years, its economic scale has got ten times bigger. The average GDP per capita has exceeded US$2,500 compared to the country’s average rate of US$1,000 per capita.
Determined to maintain sustainable growth
Since early this year, the global economic recession has continued to undergo a complicated period. Together with the nation, HCM City has its economic growth rate, especially its investment environment, job, income and people’s life subject to negative influences. In order to have a confirm with the Vietnamese Government, during QI, 2009, HCM City focuses on implementing government’s solutions in a comprehensive and drastic manner with an aim to prevent recession, maintain economic growth and guarantee social welfares.
The synchronization and specification are reflected in the content of works proposed by the City, from the action programme to implement the policy to stimulate demand for investment and consumption on the area until 2010, implement domestic investment projects in the stimulus programme on the area, grant additional capital for the Credit Guarantee Fund for SMEs on the area of the city with an amount of VND148 billion, to the implementation of a 30 percent reduction of corporate income tax which is due to be paid in QIV, 2008 according the Government’s resolution, etc. GDP of the City witnesses a growth rate of four percent, among which service increases by 5.4 percent, industry and construction, 1.9 percent, and agriculture, 2.9 percent; the total income from retail goods and service exceeds VND62,000 billion, up by more than 18 percent against the same period last year; total export turnover reaches US$4.42 billion; total import turnover reaches US$3.8 billion; capital mobilized through banking system reaches VND610,000 billion, up by over 15.5 percent against the corresponding period; total budget income reaches VND26,700 billion. Especially, 99 projects of social houses have got implemented. 37,600 houses have got completed, which helps improve the life of poor families. 
Difficulties remain
Despite some socio-economic achievements in QI, 2009, the growth rate of HCM City is lowest during the last ten years. Industrial production value and export turnover both go down compared to the same period last year. Attraction of foreign investment also witnesses a significant decrease. Enterprises are still not active enough and have not paid due attention to expanding the domestic market as well as improving purchasing power of the people. Due to common influences of the economy, enterprises have to shrink their production and business since they do not have enough orders. On the other hand, the increase in the cost of importing materials also makes it difficult for products of enterprises to compete. In QI, 2009 only, nearly 200 enterprises are forced to either stop their production or dissolve, which results in a job loss of more than 26,000 labourers and job lack of over 15,000 ones. Given this situation, the City’s functional agents have provided support, consultancy and introduced new jobs for some 81 percent of the mentioned above job losers. Another problem is that there are difficulties in investment for development. The implemented workload and disbursement rate of capital are still low due to difficulties in site clearance, capacity to get work executed and financial capacity of investors alike.
At the online meeting of the Government in March 2009, Mr Le Hoang Quan, Chairman of HCM City People’s Committee affirmed that the City would not make adjustments to socio-economic targets which got put forward since early this year. So as to get such targets reached, the City will continue to well implement action programmes to stimulate demand for investment and consumption within the area, as well as provide support in terms of lending interests, etc. According to PhD. Tran Du Lich, HCM City should concentrate on making breakthroughs in two points, including human resource and technical infrastructure. Unless these are done, HCM City will not have a right development approach.
Trung Dung