Vietnam maps out a road to more wealth

In a move which is key to the country’s economic future over the next few years, the National Assembly last week adopted a resolution on Vietnam’s plan for socio-economic development for the 2011-2015 period and another resolution on the same content for next year. The government said the resolutions were especially important for preparing resources for realising ambitious targets.

Vietnam’s overall goal for the 2011-2015 socio-economic development plan is to achieve rapid and sustainable economic development which is closely linked with economic restructuring and renewal of the growth model with the aim of boosting the economy’s quality, effectiveness and competitiveness.

“Vietnam’s economic competitiveness remains weak. Thus the target of rapid and sustainable economic development is heavily stressed in the country’s new socio-economic development strategy so the country doesn’t lag behind other countries in the region and the world,” said National Assembly vice chairwoman Nguyen Thi Kim Ngan.

The National Assembly Standing Committee reported that Vietnam’s gross domestic product (GDP) growth rate from 2011 to 2015 would be 6.5-7 per cent annually as earlier targeted by the government. The consumer price index (CPI) would stand at 5-7 per cent a year by 2015, while the state budget overspending rate would sit at below 4.5 per cent of GDP, and the public debt rate would be a maximum 65 per cent of GDP by 2015.

The   total development investment capital would occupy 33.5–35 per cent of GDP in this period, while the trade deficit rate would be gradually reduced from 2012 and was expected to be 10 per cent of total export turnover by 2015. Ngan said these prioritised targets would be concretised flexibly each year until 2015 depending on how the economic situation of Vietnam and the world would go.

Next year would be about building a firm foundation for further stable socio-economic development in the coming years. Curbing inflation, stablising the macro economy and maintaining reasonable economic growth closely linked with growth model renewal and economic restructuring were stressed as top tasks next year.

Notably, next year’s figures for GDP and CPI would be 6–6.5 per cent and below 10 per cent, respectively, while the state budget overspending would stand at less than 4.8 per cent of GDP, and the public debt rate would be 58.4 per cent of GDP. The government’s total development investment capital would occupy 33.5 per cent of GDP, and the trade deficit rate would be 11-12 per cent of total export turnover.

Ngan said these targets for 2012 and for 2011-2015 were based on careful calculations of the economic situation of Vietnam and that seen worldwide. The country’s potential in terms of agricultural and industrial development and coaxing more foreign direct investment had also been taken into account.

Minister of Planning and Investment (MPI) Bui Quang Vinh said Vietnam’s economy would from 2012 be gradually developed “qualitatively”, rather than “quantitatively” as it has been the case in previous years. “We are showing a greater interest in the economy’s effectiveness with specific solutions,” he said.

But he noted Vietnam would find it difficult to fund its targets over the next five years. “This is because the government will slash total development capital from 42.7 per cent of GDP seen in 2006-2010 to 33.5-35 per cent from 2011-2015, while Vietnam’s economic growth still relies on investment capital, which currently occupies nearly 53 per cent of GDP,” Vinh said.