Business Summit voices support for anti-inflation measures

The nation’s anti-inflation policies got the thumbs up during a Viet Nam Business Summit that attracted 3000 bankers and international financial organisations to the capital yesterday.

The summit was held in the framework of the Asian Development Bank’s annual meeting in the city, the first such meeting to be hosted by Viet Nam in its 45-year membership.

At a briefing before the meeting the bank’s Viet Nam director Ayumi Konishi backed the Vietnamese Government’s monetary policy, especially its reduction in public spending.

He said any policy needed time to improve its soundness, but predicted that from May inflation would certainly slow.

Konishi called on the Vietnamese Government to pursue its inflation control measures even if some enterprises did face difficulties in accessing bank loans.

State Bank of Viet Nam governor Nguyen Van Giau said that so far this year Viet Nam had devalued its currency to reduce demand in order to curb increasing inflationary trends.

He added that the central bank had tightened its credit policy, with growth rates limited to a maximum of 20 per cent; cut public spending by 10 per cent to reduce budget deficits; axed 10 per cent of state investment in an effort to stabilise the macro economy and ensure social welfare.

The Viet Nam Business Summit drew representatives from central banks and financial agencies of Asian Development Bank member countries and international financial organisations and firms.

Deputy Prime Minister Hoang Trung Hai said the event, held at the time of the development bank’s meeting, was a forum for the Vietnamese Government to transmit directly to international community the messages of its development process, investment environment, business climate, policies and strategic orientation.

Viet Nam had fulfilled its socio-economic strategy for 2001-10 with economic growth reaching 7.26 per cent on average, Hai said.

In 2010, when the world was witnessing financial crisis and economic depression, Viet Nam’s economic growth still reached 6.78 per cent and its export turnover topped US$157 billion, a 23.6 per cent increase over the previous year and five times higher than in 2000.

“However, Viet Nam is facing a lot of challenges such as low growth quality, productivity, competitiveness, human resources quality; unstable macro-economic balance and a challenge in narrowing the development gap with other countries in the region and overcoming the average income trap,” Hai said.

Regarding the socio-economic development strategy during the 2011-20 period, he said Viet Nam’s goal was to safeguard its macro-economic stability, fast and sustainable growth, enhancement of natural resources and environment protection and promotion of external relations and international integration.

“To achieve these goals, Viet Nam will have to focus on completing socialist-oriented market-economic institution with essential activities concentrating on administrative reform, creating a fairly competitive environment, quick development of human resources, construction of a harmonious infrastructure system with modern projects focusing on transport network and big urban infrastructure facilities,” he said.

“It is estimated that Viet Nam will need $300 billion for development investment during the 2011-25 period. Therefore, improvement of the business environment, conversion of the growth model and harmonious creation and expansion of markets – such as financial, commodity, service, labour, scientific and technological markets – in an orientation of liberalised trade and investment remain priorities of Viet Nam.”

Asian Development Bank president Haruhiko Kuroda told participants that since the adoption of Viet Nam’s doi moi (renewal) policy in 1986, its economy had been significantly transformed.

Over the last 20 years, the Vietnamese economy had grown six-fold while the poverty rate had dropped from about 58 per cent to just 10 per cent today, Kuroda said.

Broad-based and vigorous economic growth, combined with targeted intervention, had been key in reducing poverty, he said.

The emergence and growth of the private sector had played a particularly important role, generating over 90 per cent of new jobs throughout the period.

“Viet Nam is entering a new decade,” Kuroda said. “With its accession to the World Trade Organisation in 2007, the economy’s integration into the regional and global value chains is accelerating.

“As Viet Nam is going through a period of profound economic transformation, the world environment is also changing.

The ongoing integration of the global economy is helping to stimulate structural reforms and open access to markets, capital and technology, resulting in higher productivity of many economies.”

He told a press conference yesterday that Viet Nam was a development success story that had set an example for developing countries around the world.

“Viet Nam has recently achieved middle income status and after a decade of high growth has made impressive progress in reducing poverty among its citizens,” he said.

“Viet Nam is particularly vulnerable to the impacts of climate change and the Asian Development Bank is supporting the Government in developing action plans to deal with these adversities.

Urban transportation projects are being arranged specifically to reduce greenhouse gas emission by shifting people from private means of transport to a public system.”

Minister of Planning and Investment Vo Hong Phuc said that for the past years the development bank had been an important partner of Viet Nam in terms of finance, techniques, consultancy on policy – especially a big number of important projects relating to development of energy, transport infrastructure, agriculture and natural resources and State-owned enterprises reform.

The development bank’s regular meeting in Ha Noi from yesterday until tomorrow was to discuss regional inflation control measures.

ADB funds university

The Asian Development Bank has approved loans worth US$190 million to establish the state-of-the-art University of Science and Technology of Ha Noi.

The institution would support research, technical innovation and skills development to help one of the region’s most dynamic economies stay on track towards becoming a fully industrialised nation, a bank release said.

France will complement the ADB assistance by extending around 100 million euros ($145 million) over 10 years for the university, with the Vietnamese Government providing $23 million. — VNS

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