Endeavour to boost economic restructuring

Prime Minister Nguyen Tan Dung has described arranging leaders and managers in their right positions as a decisive factor behind the success of failure of the economic restructuring process.

Dung stressed that it is imperative to replace those who are incapable in restructuring the economy and withdrawn investment capital from areas outside the core businesses of state-owned corporations and economic groups.

He said the government’s implementation of plans to restructure the entire economy has remarkably improved the economy at both macro and micro levels. But generally, Vietnam’s socio-economic development is still facing many challenges, particularly a slow growth rate.

At a Vietnam Development Partnership Forum in Hanoi, the Government leader reiterated the government’s determination to intensify economic restructuring, creating an impetus for Vietnam’s sustainable development in the future.

Dung said the Vietnamese Government will continue economic restructuring and revising the growth model so that the national economy can enjoy higher competitiveness and develop sustainably.

“We’ll muster our strength to fulfil key missions, stabilize the macro-economy, control inflation, maintain the growth rate to ensure GDP growth of 5.8% in 2014 and 6% in the following year, and continue to stabilize the exchange rate and maintain export growth.”, he said.

In 2013, the Vietnamese government focused its economic restructuring master plan on improving institutions and policies and reforming the growth model. Top-priority fields included public investment, financial and credit organizations, and state-owned enterprises. 

Transport Minister Dinh La Thang said the current difficult period is a chance to eliminate weak businesses which fail to compete in the new economy.

There should be a close coordination in managing the financial, monetary and fiscal policies to ensure credit growth, allocate monetary in a reasonable manner and speed up the progress of disbursement.

2013 is the first year the Ministry of Industry and Trade has implemented a government resolution on restructuring state-owned corporations and economic groups.

Industry and Trade Minister Vu Huy Hoang says his ministry has implemented the government’s directive to restructure enterprises and ensure the rights and responsibility of the state owner in economic groups, corporations, and companies under the Ministry’s management.

The efforts have initially improved the efficiency of state-owned enterprises. To date, about 80% of SOEs have made profits totalling 33% of GDP.

Regarding investment restructuring, especially public investment, the government has directed the adjustment and allocation of investment capital for key projects and counterpart capital for ODA-funded projects. Control has been tightened for newly-launched projects while scattered investment has gradually been eliminated.

A mechanism of investment management decentralization is being improved to increase responsibility of provincial authorities and investors while private investment is enhanced. So far, the level of non-state investment has increased to 62.6% in the 2011-2013 period from 61.3% of 5 years ago.

Initial results have been recorded in implementing comprehensive measures to restructure credit institutions. Weak banks have been restructured. Four state commercial banks have been equitized. Bad debts have gradually been checked, with the monthly rate increasing by 2.5% over the past 8 months, a remarkable decline compared to the 3.9% level of the same period last year.

Looking back on progress made in 2013, Planning and Investment Minster Bui QuangVinh highlighted the Government’s efforts to keep a check on inflation, keep price index lower, stabilize the macroeconomy and ensure goods supply-demand.

Total State budget revenue in 2013 is estimated at VND798,000 billion, meeting 96.9 percent of yearly estimates and up 6.4% from the previous year.

Meanwhile total budget spending hit more than VND986,000 billion, fulfilling 100.8 percent of yearly estimate, a 8.9% improvement on a year earlier. Budget overspending is equivalent to 5.3% of GDP.

Public investment, government outstanding debts, foreign debts were within in safe limits. In addition, VND interest rates has seen steep falls, bringing interest rates on mobilized loans down 2-3 percent year-on-year and lending interest rates down 3.5 percent, equivalent to the levels recorded in the 2005-2006 period.

PM Dung has stressed human factors is crucial to the fulfilment of all tasks for 2014, requiring greater efforts to scrutinize cadre selection and human resource training.