“The growth target of 6.7% is reasonable”
Economic expert Le Dang Doanh, former President of Central Institute for Economic Management (under the Ministry of Planning and Investment)
"The economy of Vietnam is currently growing below potential. Hence, the growth target of 6.7% in 2017 is perfectly attainable and suitable to the demands of the economy. Moreover, if this target is not met in this year, budget deficit and public debt may exceed the expected threshold. So, the most important thing now is to figure out how to reach this target.
The first thing to mention is to increase productivity and reduce costs to boost economic growth.
Second, cost reduction helps increase the national budget. Prime Minister declared 2017 to be the “cost reduction year”. The first six months have passed, but the plan and progress are nowhere to be seen. Currently, only bank rate seems to decrease, while other costs like transportation costs and land prices are still prohibitively high.
Third, tax payments of business households should be more closely monitored.
Fourth, if privatisation is well conducted, the stocks market has enormous potential for attracting foreign capital and creating jobs.
Fifth, reasonable reallocation of the national budget helps avoid waste and misuse.
Sixth, the industry 4.0 should be promoted in enterprises."
The burning question: What should we trade for economic growth?
Economic expert Vo Tri Thanh, former Vice President of Central Institute for Economic Management
"The economic growth rate of Vietnam is approaching its potential, which is an important factor in shaping policies. Currently, our key policy on economic development is to stimulate supply.
The balance between economic growth and sustainable development should be maintained. If we just focus on a short-term plan, a healthy economy will not be guaranteed in the long run.
We should always consider whether it is reasonable to exchange public debt, national budget, trade balance… for that growth rate.
For sustainable development, the most important thing is to utilise the ‘local’ resources such as cutting red tape, improving the business environment,… If we reach the growth rate of 6.7% but fail to pursue sustainable development plans, numerous grave consequences will follow."
"The economic growth of Vietnam in 2017 must focus on stimulating demand."
Dr Vu Dinh Anh, economic expert, Institute of Economics and Finance (Academy of Finance)
“The Government is following a supply-side plan (stimulating exports, for example), which is a wrong choice. In my opinion, in 2017, we should rather focus on stimulating demand.
For instance, although the consumer sector increases by 7% (contributes 8.5% in GDP growth), investment savings increase by 9.5% (contributes 4.2% in GDP growth), exports increase by 18.9%, a trade deficit of US$2.7 billion will take 7.01% of GDP growth. Hence, to reach the growth goal of 6.7%, we should stimulate demand and decrease trade deficit.”
Dr Can Van Luc, Senior Executive Vice President, Senior Advisor to the Chairman of BIDV.
“We should not focus on the mining industry to stimulate supply for the economy. In the near future, oil price may increase again, but as the supply is currently abundant, it cannot reach the projected increase of 27%. Therefore, if we export too much oil now, we will lose many advantages later.
Instead, we should focus on the consumer sector which can considerably boost the economy. For example, tourism development and consumer credit are two methods."
Accelerating the disbursement process of public investment capital
Dr Nguyen Duc Thanh, Director of Vietnam Institute for Economic and Policy Research
It is about time Vietnam revised its development plans as the global context is changing. Temporary solutions like accelerating the disbursement process of public projects or boosting crude oil production are no longer practical.
In terms of inflation, with the low CPI in the second quarter, the Government may have more chances to adjust monetary policies to stimulate the economy.
In terms of budget spending, the slow disbursement process has negatively affected economic growth, job market and capital spending. Accelerating the disbursement process of public investment capital was mentioned as “urgent” in the recent guidelines of the Government.
Therefore, the Government should be more proactive in controlling spending such as downsizing, divesting from state-owned enterprises,…
Besides, we should cut red tape and create a favourable environment for investors to attract private capital. Therefore, we can relieve the pressure on the national budget and reduce our dependence on foreign capital.