Vietnam will decide its own position: NA Vice Chairman

Sunday, 2017-01-29 12:39:10
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Vice Chairman of the National Assembly Phung Quoc Hien
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NDO—“2016 was a pivotal and transitional year between the two periods of economic restructuring, with economic performance yet to be really satisfactory but pretty good. With legal bases, resources and calculations, 2017 is expected to be a year of breakthroughs for Vietnam’s economy. The Vietnamese nation will decide its own position.”

Vice Chairman of the National Assembly (NA) Phung Quoc Hien made this affirmation in an interview with Nguyen Hung, a correspondent of the Thoi Nay publication of Nhan Dan newspaper on the occasion of the Lunar New Year 2017.

Q: At its recent second session, the 14th NA voted to pass an economic restructuring plan for the 2016-2020 period. Could you clarify the reasons for this decision?

A: The need for economic restructuring stems from the fact that we are maintaining an inefficient model of economic growth. Actually, this model was suited to a certain stage of the country’s development, but it is no longer consistent with the trend of development of the world economy. The knowledge-based economy should develop on the basis of intellectual resources, not capital, natural resources and cheap labour. In the current model, there remains the issue of the unreasonable allocation of resources and even the “ask-give” mechanism instead of enhancing the quality of the business climate and internal capabilities. On the other hand, the economic restructuring programme for the 2011-2015 period had yet to meet the envisaged goals, resulting in calls for continuous implementation in a more drastic and effective fashion. During its second session, the NA passed the economic restructuring plan for 2016-2020, aiming to set out tasks and solutions to finalise the objectives laid out in the master plan on 2013-2030 economic restructuring, to address the limitations in implementing the three focuses of economic restructuring and to meet the requirements set in the Document of the 12th National Party Congress and the NA’s Resolution No. 86 in the context of the new situation.

Q: It is said that in order to restructure the economy, we need to look straight into difficulties and advantages. The remaining problems concerning the economic structure, which have been left over from previous years, must be radically addressed in 2017. If not, Vietnam will lose out at home, as the country is to integrate more deeply into the global economy in 2018. What do you think about this viewpoint?

A: The old economic structure has yet to be reasonable and to ensure the demand for accelerated development, which requires the restructuring and shifting of the growth model. From depending on capital, resources, cheap labour and extensive development, it is now essential to boost development in a both extensive and intensive fashion, with the “intensive” element as a focus. This also requires economic restructuring. Implementing the restructuring in the context of deep integration into the global economy with twelve free trade agreements (FTAs) signed and passed, excluding the Trans-Pacific Partnership (TPP), we will undoubtedly be faced with numerous difficulties in the current situation of public debts. But in my opinion, integration is a trend. We can accept a loss in the short tun, but will have to win in the long term. Moreover, we have to fully implement the market mechanism. Only by coming into contact with reality can we develop and grow. Economic restructuring is a long-term process, not an overnight one. We are not afraid, but what’s important is to create an open, public, transparent and equitable environment, as well as a staff of qualified officials who are determined and serious at work. Whether the campaign is successful or not mainly depends on the human element.

As for advantages, we have been undergoing a process of implementing the market economy, creating the scale and power of the economy, as well as generating experience in management. Restructuring is an opportunity to apply what we already have, have done and have gone through, with the aim of creating new development steps, new thinking and new perceptions. New problems only emerge when we get down to work, but it is clear that restructuring brings us more advantages and the difficulties are only immediate.

Q: One key task set at the 12th National Party Congress is to implement three strategic breakthroughs concerning institutions, human resources and synchronous infrastructure development. However, the demand for investment in infrastructure is quite big compared to the current shoestring budget. How can we solve this problem?

A: We usually get stuck because we constantly think about resources from the State budget in our mindset. But it is clear that this story will change as we implement restructuring. Take the upcoming North-South Expressway project, for instance. A part of its investment capital will be funded by the State budget and the remainder will be mobilised through the forms of build-operate-transfer (BOT) and public-private partnerships (PPP). The State budget will only be used to invest in the categories devoid of involvement from other economic sectors, while the remaining components will be implemented in accordance with the market mechanism. Only in this way can the burden on the State budget be alleviated. It will be impossible for us to create breakthroughs in many fields, including transport, health and education, if the mindset of depending on State funding remains unchanged. There is a funny story that that we like the market mechanism but do not want market prices. However, this is unavoidable for us.

Q: One of the five key tasks of economic restructuring in the 2016-2020 period set in the NA’s resolution is to restructure the State budget and the public sector. How will the NA tighten the implementation of this task to ensure the financial discipline as proposed in the resolution?

A: An urgent need at present is to exercise thrift and combat wastefulness. First of all, the financial discipline must be tightened, with all expenditures requested to be consistent with standards and norms and to ensure efficiency. For example, the use of public cars or public spending needs to be standardised. The Finance Ministry piloting the allocation of subsidies to cut the use of State-owned cars is an important step. In the time ahead, the Law on Management and the Use of Public Assets will be revised to ensure that all State-owned assets are managed in an effective fashion.

Q: What are your forecasts about the scale and structure of Vietnam’s economy in 2017? What will the scale and structure of the Vietnamese economy be like by 2020 as the economic restructuring project between 2016-2020 comes to an end?

A: Difficulties, advantages and challenges always interweave with each other. The good news is that we have already worked out plans and goals. The problem remaining is how we can organise the implementation of this. Vietnam has the experience of a number of periods of difficulty. The country’s economic performance in the pivotal year 2016 was not really satisfactory, but still quite good. With legal bases, resources and calculations, I think 2017 will be a breakthrough year. 2017 is the Year of the Rooster, and the rooster also symbolises diligence and hard work. We can only rely on our own hands to help us. The Vietnamese nation will decide its own position, but of course also lean against the trend of the era. A boat sailing downstream may be faced with rapids. What is important is that we have the bravery to cope with them.

If we attain a constant growth rate of 6.5%+ from now until 2020, we will successfully implement economic restructuring and change the growth model. In my opinion, Vietnam will basically become an industrialised nation of middle income by 2020 and achieve the envisaged goals. And we will enter the year of 2021 with a different position.

Thank you very much!