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Vietnam ‘remains strong amid challenges’

Mar 10. 2017
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By VIET NAM NEWS
ASIA NEWS NETWORK
HO CHI MINH CITY

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DESPITE facing challenges, Vietnam has great opportunities to sustain its high economic growth rate, a seminar heard. Dinh La Thang, secretary of the Ho Chi Minh City Party Committee, told the “Vietnam Economic Scenario 2017: Business Investment in a Changing World” seminar on Thursday that the global economy continued to be volatile and hard to predict with the rise of populism.

A slower-than-forecast recovery of the world economy, a reduction in global trade growth and a slowdown in the commodity market have adversely affected export-driven economies, including Vietnam, he said.

The country also faces challenges at home, including complicated weather patterns and climate change as well as slow growth in labour productivity and enterprises’ capacity, he said.

“We should not be discouraged when looking at a somewhat gloomy general picture, but we accept the reality, because our economy also has many golden opportunities to retain its high growth rates and even achieve a big breakthrough.” 

He said the basis for his optimism included the government’s programme to restructure the economy and renovate its growth model, and its determination to act as a constructive, truthful government to serve the |people and consider the private sector an important driving force of the |economy.

These have significantly supported enterprises’ development and motivated innovative start-up programmes, he said.

The desire to develop the agricultural sector using high technology will help raise its competitiveness in the global market, he added.

Other delegates said that since the end of last year, the country’s economy had seen both advantages and difficulties. The government has implemented many measures to resolve the difficulties faced by companies, improve the business environment and support start-ups, they said.

These policies have yielded positive signs. Investment by the private sector increased by 9.4 per cent last year and the number of new businesses was 110,000. Flows of foreign direct investment reduced globally last year, but Vietnam’s share increased by 9 per cent.

Economist Vo Tri Thanh said that despite facing difficulties in exports and attracting foreign investment, Vietnam still had certain advantages, including geographic and political.

Furthermore, Vietnam is not only a promising market of more than 90 million increasingly affluent people, but also a gateway for foreign investors and businesses to access markets that have free-trade agreements with Vietnam, he said.

Talking about promising sectors for investment, he listed processing, real estate, finance banking, and even agriculture. 

Don Lam, chief executive officer and founding partner of VinaCapital, said: “Beyond our traditional focus on companies participating in the domestic consumption story, we see potential investment opportunities in areas such as infrastructure and perhaps the banking sector, which are among the top priorities for the government.

“Hospitality is another sector with great promise. Tourism numbers reached records in 2016 and are expected to continue to rise this year. At the same time, our tourism industry remains undeveloped compared with neighbours such as Thailand and Malaysia, so the prospect for growth is tremendous.”

Delegates said that if Vietnam wanted to achieve economic growth of 6 per cent or more this year, its economic policies must be steady and flexible and restructuring had to be speeded up, especially that of the banking and financial systems and state-owned enterprises.

Thanh said: “Vietnam needs to provide a new impetus for reforms as well as ‘quality resources’ for development. The interaction between domestic reforms and integration [is becoming] much more important.”

Nguyen Tu Anh, deputy head of the State Bank of Vietnam’s Monetary Policy Department, said the central bank would track economic and monetary developments to adopt appropriate monetary-policy tools to balance inflation and economic growth.

It will meanwhile make efforts to keep the monetary and foreign-exchange markets stable, he said.

Thang said Ho Chi Minh City leaders understood the challenges and were determined to overcome them to retain the city’s position as the country’s leading economy and aim for higher targets.

The city is implementing seven breakthrough programmes based on its strengths and potential, and attaches great importance to reforming the investment environment, motivating entrepreneurs and creating conditions for establishing and developing businesses, he said.

The seminar, organised by the Vietnam Economic Times, was attended by more than 300 delegates, including Vietnamese and foreign business executives. 

 

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