During the first week of the sixth National Assembly (NA) session, NA deputies discussed a Government report on socio-economic development in 2009, as well as orientations and tasks for 2010 and the implementation of the State budget.
How to promote a higher GDP growth once the national economy has begun to emerge from the economic downturn was an issue of concern for many NA deputies.
Most agreed with the evaluation of cabinet members’ saying that this year, the Vietnamese economy has recovered from the economic meltdown and maintained a relatively high rate of growth. They also praised joint efforts to maintain a stable national economy, curb inflation, and ensure social welfare and socio- political stability.
Vietnam has fulfilled a number targets for socio-economic development. Rice exports have hit a record high of 6 million tonnes and total investment capital has reached more than VND708,000 billion, an increase of 16 percent over last year, accounting for 42.2 percent of the country’s GDP . Total GDP is estimated to increase to 5.2 percent by year’s end meeting the target set by the NA. Total spending for social welfare soared by 62 percent compared to last year while the number of poor households is estimated to drop to 11 percent by the end of this year.
However, NA deputies said that there remain weaknesses in maintaining socio-economic development during the past year such as the GDP hitting a ten-year record low, ineffective economic restructuring, low labour productivity and competitive capacity and poor infrastructure facilities. In addition, human resources development and the building of market economy institutions have seen no remarkable improvements and there are still a lot of difficulties in ensuring social welfare and benefits.
Many delegates said that the implementation of monetary and financial policies, as well as the government’s stimulus packages, have not been effective in rural areas and for many small and medium-sized enterprises (SMEs). There is a potential risk of inflation in future due to the loosening of monetary policies. Therefore, such policies should be implemented carefully.
According to many NA deputies, the country has prevented an economic downturn despite the financial crisis and it is time for the government to tap its internal strengths to promote national economic recovery in the post-crisis period. Although the country has achieved a growth rate of more than 5 percent as planned, the effectiveness of government stimulus package is questionable. For example, the Incremental Capital-Output Rate or ICOR is considered as a measure of the efficiency with which capital is used. The ICOR in 2008 was 6.66 and is expected to increase 8 this year. This indicates that the government’s recent interest rate subsidy package has worked to some extent but the effectiveness of this package should be re-considered. The national economy has recovered but cannot maintain a high economic growth rate. Therefore, it is necessary to maintain stimulus packages and develop long-term, comprehensive policies.
NA deputies also asked the government to take drastic, synchronized measures on attracting and using investment capital sources in the coming time. In addition, detailed regulations are needed to heighten the responsibilities of investors, carry out disbursement of capital sources and remove difficulties in land clearance to facilitate investment.
The government’s report will be discussed by the NA next week. Many NA deputies agreed that the government’s solutions to fulfil six major goals in future are very necessary and also feasible. However, it is needed to stipulate regulations on responsibilities of leaders from relevant ministries, agencies and local authorities while strictly dealing with corruption and wastefulness.