A social survey released by the United Nations Economic and Social
Commission for Asia and the Pacific (UNESCAP) has revealed that Vietnam
may reach its target for 5.5 percent growth this year, but only if the
country can successfully restore confidence in its stuttering economy.
Vietnam’s National Assembly (NA) expects economic
growth for the whole year to reach this target by keeping inflation
stable, addressing vulnerabilities in the banking sector and
restructuring inefficient State enterprises.
The survey,
titled ’2013: Forward-looking marcroeconomic policies for inclusive and
sustainable development,’ suggested that the country’s economic growth
has slowed amid cyclical and structural challenges over the last few
years.
For example, growth decelerated 5 percent last year, following rates of 5.9 percent in 2011 and 6.8 percent in 2010.
Weak growth is a result of the need to stablise the economy and curb
inflation, but is also a side effect of heavy investment driven by State
enterprises and the banking sector.
UNESCAP said that they
appreciated the Vietnamese Government’s efforts to stabilise the economy
and rectify earlier expansionary policies, and praised the reduction of
the inflation rate from 18.7 percent in 2011 to 9.3 percent last year.
However, they noted that inflation still remained high in health
services, education and transport, leaving average households exposed to
large price increases.
They also approved social measures
recently introduced by the country, particularly its decision last year
to raise health insurance subsidies for the poor from 50 percent
to 70 percent as part of its efforts to achieve universal health care
coverage by 2014.
Dr Le Xuan Sang, deputy director of the
Department for Macroeconomic and Information Studies under the Central
Institute for Economic Management, said that in the last two years
Vietnam ’s macroeconomy had faced uncertainties including hiked
inflation, decreased foreign currency reserves, sharply increased
interest rates, and many cases of bad debt in real estate.
However, he said that things looked brighter in the first quarter of
this year, with improved growth, decreased inflation, higher foreign
currency reserves, a stable trade surplus and falling interest rates.
He emphasised that in the second quarter of this year,
Vietnam should disburse State budget and issue Government bonds for
key infrastructure projects to continue its growth.
UNESCAP
economic affairs officer Daniel Jeongdae Lee noted that Vietnam had
spent more and more money on vocational training, unemployment
insurance and health care and said that such efforts to invest
in people was important for long-term development.
“The
economic model grow first, distribute and clean up later is no longer
viable,” Lee said, adding that conventional marco policies
over-emphasise the importance of stablisation at the expense of
development.
The UNESCAP survey revealed that the region’s
economic progress has been marked by widening income inequalities and a
severe depletion in natural resources, and argued that marcro economic
policies can play vital role in reorienting the region toward a
development path.
“The 2013 survey reminds us that this is
no time for complacency, as the need for a more inclusive and
sustainable pattern of economic and social development continues
to be critical,” wrote Noeleen Heyzer, ESCAP Executive Secretary in her
preface to the survey.-VNA