Growth targets met in difficult year

Minister of Planning and Investment Vo Hong Phuc

Vietnam tried its utmost for strong economic recovery in 2010. What were the most significant achievements of Vietnam’s economy in the last year of our five-year socio-economic development plan for 2006-2010?

2010 was quite a challenging year for Vietnam’s economy as we continued to advance efforts to confront adverse consequences of the global economic recession and natural calamities, while continuing to implement our commitments with the international community.

Despite facing a lot of difficulties, Vietnam had succeeded in maintaining stable economic growth across the board. Particularly, in the agricultural frontier, we overcame tough period and managed a fairly high growth; we also saw a healthy growth in the industrial frontier notably, rapid growth in domestic trade, import-export as well as tourism that served as a launching pad for the service sector’s phenomenal growth.

With constant efforts by the whole system the country’s gross domestic product (GDP)  growth came at 6.78 per cent in 2010, surpassing the National Assembly’s target of 6.5 per cent. Regaining the growth momentum will pave the way for solid further growth in 2011 and in the following years.

What are the reasons behind such coveted achievements?

Most importantly, we had succeeded in making the most of our united forces, from the government to the business community and from domestic to foreign-invested companies. In addition, the success partly came from our constant efforts, including the administrative procedure simplification drive to improve the local investment climate.

The report on Global Competitiveness 2010-2011 published on September 9, 2010 by the World Economic Forum (WEF) acknowledged Vietnam had moved up 16 ranks in the global competitive index in 2010, now standing in 59th position among 131 economies. This came from concerted efforts by ministries and government agencies to better local investment environment.

Vietnam has failed to bridle inflation. What is your view?

We saw constant efforts by ministries, government agencies and local governments in enforcing Government’s Resolution 03/NQ-CP dated January 15, 2010 regulating measures to monitor the implementation of socio-economic development plan and budget projections in 2010.

Our big measure groups on economic rebound, structural changes and growth quality improvements, flexible and prudent management of fiscal and monetary policies to stabilise the macroeconomy, reign in the trade deficit and contain inflation and ensure social well-being had brought rebounds to most sectors of the economy.

The macroeconomy has been stabilised gradually. The trade deficit was narrowed step by step. Budget receipts and expenditure targets were achieved, with over-expenditure rate reducing towards less than 5 per cent in the coming period. The fiscal and monetary policies were regulated in a way to basically ensure stable development of the macroeconomy.

However, the consumer price index (CPI) rose 11.75 per cent in 2010 against December 2009 which was 9.19 per cent higher than 2009’s 12-month average CPI growth level. High inflation rate badly affected people’s lives, particularly state employees. This will be our top focus in 2011 to achieve a better macro-economic performance.

What do you think of the foreign direct investment situation in 2010?

Vietnam reported around $18.5 billion in committed FDI in 2010, $4 billion down compared to 2009. However, the disbursement figure was encouraging, hitting $11 billion, a 10 per cent jump against 2009. This indicated growing confidence of foreign investors amid stalled investment picture in many countries around the world. Although the world economic recession has still cast big impacts on business and investments, this disbursement figure was noteworthy with sweeping influences in the subsequent periods.

What do you think about  Vietnam’s growth targets in 2011 and what measures need to be taken to keep 2011 inflation of less than seven per cent?

A lot of difficulties are still ahead in 2011. However, the economy still witnesses certain advantages such as 2010’s rapid economic rebound, improved local investment climate and gradually stabilised macroeconomy. This will be a firm foundation for us to accomplish the National Assembly’s 2011 development targets.

Of the 2011 development objectives, maintaining stable macro-economy and containing inflation of less than seven per cent would be arduous tasks. However, the government is committed to fulfilling the assignments. This would require closer and stronger management measures and more efficient coordination among ministries and government agencies, especially among fiscal and monetary policies to achieve import-export balances.