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Three vital proposals made to boost export in rest of year
Widening the dong trading band, ruling foreign currency use for export transactions, and offering direct credit support for exporters are three major proposals made by a Ministry of Planning and Investment agency to stimulate export in the rest of the year.
The National Center for Socio-economic Information and Forecast (NCEIF) says in a report released early this week that the State bank of Vietnam (SBV), or the central bank, should wind the trading band of the local currency against the U.S. dollar to 6% from the current 5%.
This measured depreciation of the dong will not have a substantial effect on the local foreign exchange market, according to the center. The Government, the report says, should have specific regulations on use of other foreign currencies than the U.S. dollar in export transactions to avoid the over dependence on the greenback as at present.
The Government should provide credit directly for exporters upon completion of delivery and payment procedures.
NCEIF projected this year's export turnover at between US$58.9 billion and US$61.3 billion, down 2.2-6.4% year-on-year. This projection is in contrast with the Ministry of Industry and Trade's export growth forecast of 3% for this year to US$65 billion.
The NCEIF forecast coincides with what economists said at the conference held by the Vietnam Chamber of Commerce and Industry in HCMC last week to find ways to help businesses ride out the challenges brought on by the economic recession.
The prediction was based on Vietnam's export curve observed in recent years and on the pace of recovery in the global economy and Vietnam's major export markets, said NCEIF.
Le Dinh An, director of NCEIF, told the Daily that in recent years the first half export turnover usually accounted for 45-47% of a year's total while that in the second half made up 53-55%. However, the actual export in the first seven months of this year amounted to US$32.3 billion, down by 13.5% year-on-year, and represented about half of the year's plan of US$65 billion.
For that reason, it is now hard to achieve the 3% export growth target as in the last five months the country will have to fetch about US$32.25 billion from exports, or US$6.45 billion a month.
The world economy is not yet out of the woods while Vietnam's export prices are on the decline due to slackened international consumer demand.
According to a report by the Ministry of Industry and Trade, export prices of domestic goods in January-July dropped 24% year-on-year, causing export revenue to fall by about US$10.3 billion. Key export earners like crude oil, garment-textile, and rice slid by about US$4.2 billion, US$810 million and US$780 million respectively.
NCEIF forecast that if the worst of the recession was over and the Vietnamese Government took more proactive measures, the country's export revenue could be a little higher or equivalent to the 2008 level. This means export growth would be zero in the most optimistic scenario.
Even with 0% export growth this year, the Vietnamese economy is still doing much better than many others, said economist Le Dang Doanh.
VietNamNet, SGT
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