Twin factors to energise the economy

Wasteful energy use could clip the economy’s wings

Ngo Doan Vinh, head of Ministry of Planning and Investment’s (MPI) Institute for Development Strategies, said that to reach the targeted GDP growth rate of 8.5 per cent or higher, Electricity of Vietnam and relevant agencies needed to reduce expenses, ensuring energy supplies and reduce the high rate of losses via power transmission lines.
He said that at present, the price of electricity in Vietnam was higher than in neighbouring countries, as was the rate of power loss via transmission lines at over 10 per cent.
Phan Huu Thang, head of the Foreign Investment Agency, said Vietnam had been successful in drawing foreign investment capital this year. However, there remained a number of hidden risks if procedures related to appraising and granting licences and land clearance were not improved.
He revealed that at present there are 50 foreign-invested projects worth $40 billion pending appraisal and licencing.
Thang added that Vietnam was likely to reach its target of $12 billion in committed foreign investment capital and $4.5 billion in implemented foreign investment capital this year, 15 per cent more than that last year.
He estimated that next year, close to $5.6 billion in implemented foreign investment capital could be within reach.
Dinh Van An, head of MPI’s Central Institute for Economic Management, said the legal framework supporting businesses was comprehensive and the government would continue to create a level playing field between foreign and domestic investors.
An also committed to improving policies in compliance with international rules.
Vinh said that the existing high consumer price index (CPI) could negatively affect the economy and the GDP rate. He added that wasteful and inefficient investment projects in real estate and infrastructure should be thoroughly reviewed and cancelled.
Truong Van Doan, Vice Minister of Planning and Investment, said the economy had never seen such diverse sources of capital, including foreign direct investment, indirect investment and official development assistance.
He said that Vietnam had the opportunity to record high growth rates, but it needed to pay attention to hidden risks such as an increasing CPI and project inefficiency. According to the MPI, the total investment capital in Vietnam is estimated to reach around VND470 trillion ($29 billion), equivalent to 41.3 per cent of GDP, this year.
It is estimated that the GDP growth rate in 2008 will reach between 8.6 and 8.9 per cent, equivalent to between VND1,336 trillion ($83.5 billion) and VND1,342 trillion ($83.87 billion).