5-year economic development plan doesn’t win economists’ hearts

Though the government has decided to lower the targeted economic growth rate for the next five years to 6.5 percent, which is lower than the target approved by the 11th Communist Party’s Congress, economists still believe that the 6.5 percent GDP growth rate target remains overly high.

Former Minister of Trade, Truong Dinh Tuyen, said at a workshop on Vietnam’s macro economy held several days ago, that most of the economists whom the government consulted with suggested that the economic growth rate target should be 6 percent instead of 6.5 percent.

How high GDP growth rate should be for 2011-2015?

At the socio-economic plan just submitted to the Communist Party’s Politburo, the Ministry of Planning and Investment suggested the 6.5-7 percent economic growth rates for the next five-year period, which is 0.5 percent lower than that set up by the 11th Communist Party’s Congress.

Tuyen said that if Vietnam can better the resource allocation, it may obtain the growth rate of 6.5 percent. If not, the growth rate could be five percent only.

Tuyen quoted former Minister of Planning and Investment, Tran Xuan Gia, as saying that 5 percent growth rate is reasonable, because a period of low growth rate would always follow the period of investment tightening.

The participants at the above said workshop also agreed that in the current circumstances, it is not advisable to attach much importance to the high growth rates, while the inflation rate remains overly high. Therefore, it is necessary to lower the targeted economic growth rate set up by the latest Communist Party’s Congress.

“Traditional way of thinking” followed in projecting economic development

It seems that the five-year economic development plan does not “win the economists’ hearts”.

Commenting that the five-year economic development draft plan still cannot satisfy the urgent requirements of the national economy, Dr Vo Dai Luoc, a well known economist, believes that the report about the 2011 economic performance does not truly reflect the reality.

“The things that are happening now are the low economic growth rate, high inflation, stagnant production, and more serious social problems. But these have not been reflected in the plan,” Luoc commented.

Luoc went on to say that the biggest problems of the national economy, such as the low-quality programming, the establishment of massive industrial zones which have been working ineffectively, have not found proper solutions.

Meanwhile, Dr Tran Du Lich has pointed out that that the five-year economic development plan has still been designed following a “traditional way of thinking”, while the programmers should understand that they need to compile the plan in the context of Vietnam’s lagging behind in the competition and global integration.

Dr Le Dang Doanh has also pointed out that the five-year economic development plan needs to be adjusted to make the goals more feasible.

According to Dr Tran Du Lich, the most important task for the next five years is to focus on obtaining high quality in economic growth, gather strength on restructuring the growth model, thus allowing to create a driving force for the fast and sustainable development for the new 20-year period.

Emphasizing the need for macroeconomic stability, former Trade Minister, Truong Dinh Tuyen, said that it is necessary to curb the inflation rate at one-digit level in 2012.

Sharing the same view with Tuyen, Vo Tri Thanh, Deputy Head of the Central Institute for Economic Management (CIEM), agreed that stabilizing the macro economy should be put as the top priority task for the next five year period.

Source: TBKTVN

Tags: Vietnam economic, Vietnam economic growth, Vietnam economy, Vietnam economy 2011