State targets record economic growth

“The government will continue to improve the effectiveness of investment, increase the competitiveness of businesses and make full use of social resources,” Prime Minister Phan Van Khai told the National Assembly last week.
In order to achieve its target of 8.5 per cent growth for 2005, the prime minister said the government would focus on ensuring the efficiency of state-funded projects by curtailing corruption and waste.
He said this was an essential task because state investment capital now accounts for more than 50 per cent of the country’s total annual investment.
Khai said the government would take action to prevent waste and excessive spending on constructing office buildings and organising receptions and conferences at state agencies.
Reform of state-owned enterprises (SOEs) would be accelerated next year despite the reluctance of some business leaders in the state sector, who fear that equitisation will reduce the pay and privileges they are accustomed to receiving, Khai said.
The prime minister said that domestic businesses and foreign investors were playing increasingly important roles in the country’s economic development, with total investment capital from these sources surpassing that of the state sector last year.
“The government will continue to remove obstacles in order to create a more open and level playing field for the private sector,” Khai vowed.
Khai said the government wanted to keep Consumer Price Index (CPI) growth lower than GDP growth, proposing that the National Assembly work toward this goal rather than fixing a new CPI target every year, as it does now.
He stressed the need to make changes in the relationship between government bodies and the public in order to spur administrative reform.
“Many problems related to this relationship remain unsolved, and this is a key factor in socio-economic development,” he said.
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Khai called for special emphasis to be placed on regulations governing the issuance of permanent residences, land use rights and home ownership certificates, management of overseas workers, real estate trading, and construction.
“This is a difficult task, but the government is striving to realise it to ensure the success of its five-year economic development plan,” Khai said.
Although the country had the fastest-growing economy in the world after China during the last four years, Vietnam’s economic indicators have been weaker than expected.
The country’s GDP growth rates were 6.89 per cent in 2001, 7.08 per cent in 2002, 7.26 per cent in 2003 and a projected 7.6 per cent for this year. Over that period, the country’s average annual growth rate was around 7.2 per cent, lower than the government target of 7.5 per cent.
The government approved a plan to restructure over 2,000 SOEs between 2002 and 2005, but less than 1,000 were equitised as of August of this year. Overall, only 1,748 SOEs have been restructured, while more than 5,000 remain unequitised.