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Difficulties still ahead for national economy
Dr Vo Tri Thanh, Director of the Department for International Integration Studies under the Central Institute for Economic Management (CIEM), said that there have been positive macroeconomic signs, but Vietnam will still face a lot more difficulties.
What would you say about the decreased inflation rate in the last month?
Dr Vo Tri Thanh, Director of the Department for International Integration Studies under the Central Institute for Economic Management (CIEM)
The decreased inflation rate proves to be good news for the national economy, as curbing inflation is our top priority. However, we sometimes have to exchange something to get a lower inflation rate. For example, when we tighten monetary policies to fight inflation, this affects the economic growth rate.
I have to say that difficulties are still ahead, and we must not get too carried away about the initial achievements; macroeconomic stability should be considered the most important task.
Which factors make you believe that difficulties are still ahead?
We have gained a lot of encouraging results, but there still exist problems. For example, we have successfully reduced the monthly trade deficit and reduced inflation, but there still are problems with the liquidity of banks, and uncertainties in the forex market.
However, I personally think that the possibility of Vietnam overcoming the difficulties is bigger than the possibility of it not overcoming the difficulties.
Despite the big difficulties, a lot of foreign investors still praise Vietnam’s economy and business environment. What do you think is behind the praise?
There are two issues we need to clarify.
Investors come to Vietnam to seek profit; therefore, they have to learn about the business environment, infrastructure and policies. Their information, to some extent, aims to serve their interests, and this is a normal thing. Some experts say that Vietnam should be cautious about the information. For example, when they say the business environment is good, they may imply the environment for getting profit in the short term.
Meanwhile, Vietnam needs to look into the foreign direct investment (FDI) with a comprehensive vision. Investors only come to Vietnam if they can get VND2 on VND1 of investments. But we still need FDI, because it brings technologies, and creates jobs.
We need to clarify whom we want and what we want. There are many types of FID. Some investors come to exploit natural resources, others come to make products for export. Different types of investment bring different benefits.
Let’s talk about investment in the real estate sector. Some experts say that the high FDI in the sector is really worrying, while others say that there is nothing to worry about. What is your opinion about that?
It is clear that real estate is really an attractive sector in Vietnam, though the market is now facing a lot of difficulties. Therefore, FDI in the sector should be seen as a positive thing.
However, we still need to raise questions about what the high FDI in real estate will bring to Vietnam. In general, I think Vietnam should open the real estate market in the way that strives towards sustainable development.
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