Vietnam to balance speed, sustainability in growth

MPI Minister Bui Quang Vinh

What was discussed at the conference?

The conference discussed the creation of the 2016-2020 socio-economic development plan and the 2016-2020 medium-term investment plan. It also dealt with the main contents of the newly-approved Public Investment Law and the Bidding Law and surveyed opinions on the draft decree on medium-term and annual public investment planning.

Prime Minister Nguyen Tan Dung chaired the conference.

How will the 2016-2020 socio-economic development plan be built?

The 2016-2020 socio-economic development plan aims to achieve the objectives set out in the Resolution of the 11th National Congress of the Communist Party of Vietnam on the country’ socio-economic development between 2011 and 2020.

The 2011-2015 plan was designed within the context of an average annual growth rate of 7 per cent from 2006-2010, and based on an optimistic forecast for economic recovery after 2010. However, from 2011 to now the world’s economy has taken many complicated and unpredictable twists and turns, and economic recovery in the domestic economy has been slower than expected.

Government agencies have implemented timely measures, and with concerted efforts from the business community, the situation has seen positive progress. The macroeconomy is stable, inflation is under control, with the annual consumer price index (CPI) rise decreasing from 18.13 per cent in 2011 to under 7 per cent across 2012, 2013 and 2014. Economic growth is reasonable at 5.8 per cent. Also, the quality of growth has improved. This can be partly attributed to economic restructuring and adapting growth models to fit the economic landscape.

Still we face difficulties. The current stability of the macroeconomy doesn’t seem sustainable; growth is lower than that of the previous five years; and the restructuring process is slow.

Therefore we will use the lessons learned in the 2011-2015 period to better build and implement the 2016-2020 plan.

What are the main objectives of the 2016-2020 plan?

Consumption is low everywhere due to the prolonged economic crisis. Also political unrest and conflicts between big economies have caused a decrease in aggregate demand. We need several back up plans to stay proactive.

The main objective is keeping the macroeconomy stable, controlling inflation and boosting growth while ensuring sustainability. We aim to turn Vietnam into an industrial economy by 2020, and we’re aiming for an annual economic growth rate of 6.5-7 per cent in 2016-2020.

Participants at the conference will discuss how we can create a realistic plan that matches the current situation, and we will also need to map out how we can implement the plan.

What about the 2016-2020 medium-term investment plan?

We have been carrying out the 2014-2015 plan for investment using funds from the state budget. For the 2012-2015 investment plan we’re using funds from medium-term government bonds, while for 2014-2016 we’re using the supplement government bond fund.

These plans enabled government agencies and localities to be more independent in using funds from the state budget and government bonds and have contributed to restructuring public investment. However, they were not sufficiently connected to the 2011-2015 socio-economic development plan, and were not built within a complete legal framework on public investment.

The 2016-2020 medium-term investment plan we’re building this time will significantly contribute to the successful implementation of the 2016-2020 socio-economic development plan.