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Internal strength should be promoted in preventing economic downturn
Giving an interview on the sideline of the recent scientific seminar ‘Preventing economic downturn in Vietnam’ on May 9, Dr Cao Si Kiem, Head of the Vietnam Small and Medium-sized Enterprises’ Association has emphasised the role of the people’s strength in preventing economic decline in the country.
Q: What is your assessment of the Government’s measures on preventing economic slowdown?
A: In general, these measures have been taken in a timely and resolute manner. But, their effects are still slowly taken in comparison with the actual requirements made by the economy and enterprises because these measures have been deployed in a slow and incomplete manner.
Secondly, explanation and dissemination of information given to the beneficiaries concerning the economic stimulus measures approved by the Government and relevant agencies are yet to be clear-cut and regular. So, it is still confusing in taking these measures and many businesses, organizations and individuals that need help are yet to get any benefits from these stimulus measures.
Thirdly, all of the economic stimulus packages given by the Government have only been band-aids measures. We need to define longer-term targets and take measures to reach these targets.
We need to set longer-term targets so that we shall not be confused when the economy recovers and develops.
Q: What solutions have we applied among solutions given by other countries?
A: Vietnam is a developing economy so there are still many problems we have to solve as far as the short and long terms are concerned. For the immediate, we have to give priority to solving the short-term problems.
In other countries, money has been directly given to people to increase purchasing power or provided for enterprises and banks. But we can not do so because our foreign exchange reserve is still left much to be desired and economic strength is still below mark. Therefore, we have to apply measures such as covering 4% of the interest rates on bank loans to enterprises and the support for purchasing health insurance and so on. These measures are suitable for such a developing economy as Vietnam’s.
However, we have succeeded because we have made full use of the people’s strength.
Q: What do you think about optimistic signs through basic economic indexes in recent time?
A: Actually, these are very clear signs. In recent time, enterprises have got interest rate support so they have met with less difficulties in their production while their competitive edge and labour recruitment demand has increased.
Q: What is your judgement about possible inflation rate this year in the context that the Government has asked the National Assembly to approve the budget deficit level of 8%?
A: In my opinion, inflation rate this year will be only 6 – 7%, because of our declining economy, negative price index which is moving towards positive level but with a slow speed.
However, if economic stimulus packages are deployed in a long term basis with large amount of money and failure to be provided for the right needy ‘addresses’, their effectiveness will be low and inflation will be likely to increase.
But with the amount of money given in current economic stimulus packages and the current manner of supervision, I believe that the inflation rate will be 6-7%.
Truong Son
nhandan
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