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Vietnam should prioritize fighting inflation: Expert
Richard Duncan, the author of the best-seller “The Dollar Crisis: Causes, Consequences, Cures”, is addressing at the workshop
Vietnam should concentrate on curbing inflation to restore macroeconomic stability before redirecting to strategies to boost growth, said a foreign expert at a recent workshop at Ho Chi Minh City-based Vietnam-American Training College (VATC).
Richard Duncan, the author of the best-seller “The Dollar Crisis: Causes, Consequences, Cures”, told the workshop, themed “The world’s financial crisis and its impact on Vietnam”, that in the context of more emerging international uncertainties, Vietnam should consider stabilizing its macro-economy to found a sustainable foundation for future growth.
The workshop is a part of VATC’s effort in bringing practical knowledge from international scholars to its students.
Vietnam should boost trade with the US, especially in processed food, apparel and garment, footwear – the country’s advantages, in order to enrich its forex reserve, build up the capacities for domestic industries, and push up domestic demand.
It will also strengthen the bilateral diplomatic ties as well, he said.
The country should also address its infrastructure bottlenecks to boost economic efficiency and create more jobs.
“I think that the situation now in Vietnam is somehow modeling what had occurred in China in 1980s due to infrastructure gridlocks, and so, tacking the problem will help spur the growth engine of Vietnam again,” he added.
“The current crisis in EU and US now is something that can be predicted earlier, and I had done so in my best-seller book which was published in 2003, 5 years before it took place,” he said.
It is a historic cycle, and when we understand history, we can forecast what is going to happen in the future.
“Like traveling on a train, you have to look back the past tracks to have the idea of where will it lead us to in the future,” he added.
The crisis resulted from the abandonment of economic orthodoxy including balanced government budget, sound money, balanced trade and the core principles of economic orthodoxy causing the Great Depression in the 1930s of the 20th century.
The model of the new crisis seemed to mirror what occurred in the 1930s.
“In the Great Depression, we have the gold standard breakdown in 1914, the credit boom – the roaring 20s, boom then led to bust when the credit could not be repaid, which lead to banking and international trade collapses”.
“In the recent financial crisis, we have the Bretton Woods breakdown in 1971, the credit boom – the global economic bubble, and the rest just simply follow suit.”
Richard Duncan also showed his suggestion of a $3 trillion package to save the US and the whole world, $1 trillion each will be intensively invested in solar energy, biotech and genetic engineering, and nano technology.
The package will help end the US chronic trade deficit, expand US tax revenues, an unassailable US lead in the industries of the future, and US energy independence, medical miracles and technological marvels.
Richard Duncan is now chief economist at the Singapore-based Blackhorse Asset Management which is a strategic shareholder of VATC.
Since beginning his career in Hong Kong in 1986, hehas served as global head of investment strategy at ABN AMRO Asset Management in London, worked for the World Bank in Washington D.C., headed equity research departments in Bangkok and consulted for the International Monetary Fund (IMF).
Richard has appeared frequently on CNBC, CNN, BBC and Bloomberg Television and is a well-known speaker. He studied literature and economics at Vanderbilt University (1983) and international finance at Babson College (1986).
Thoai Tran
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