Viet Nam Human Rights
An insight on public debt
12/11/14
After the
announcement about the public debt
situation in Vietnam
had been released by Government at Congress, members of the National Assembly
and many people throughout the country expressed sympathy before the solutions
that the Government had put in place to manage tighter public debt and
implement the commitment to repay. But besides that, there are still people
with partial sight of the public debt, distorting the facts, inferences about
public debt in Vietnam
and post on social networks, causing public panic.
In the
reports on the opening day of the 8th Session of the National
Assembly XIII, Prime Minister Nguyen Tan Dung said: In 2014, we have basically
achieved the goals and tasks of socio - economic development which Congress
set. Regarding macroeconomy, the report affirmed: “Inflation is under control,
macroeconomic stability is better. Consumer price growth fell sharply, in 9
months increased by 2.25%, the lowest figure in 10 years and it is expected
increase of less than 5% whole year. Interest rates decreased by 2% in
comparison to the end of 2013. Credit growth to the end of September reached
7.26% (same period is 6.87%) and it is expected to increase 12-14% yearly
schedule. Rates and foreign exchange market are stable; foreign currency
reserves increase, reaching the highest level ever. Confidence in Vietnam
dong is increased. Government’s report also bluntly stated limitations and
weaknesses: “Macroeconomy and the balance of the economy are not strong. Budget
deficit remains high. Public debt is increasing rapidly. Direct debt ratio of
government revenue to total is about 14.2% in 2014 (according to the provisions
of the Public Debt Strategy is less than 25%), but but if adding up both lend
for existing loans and new landing for lend is about 26.2%”.
This is
not the first time the government announced public debt issues before Congress,
people, but from many previous meetings, the public debt figures were shown to
the highest power body of the state.
Explaining
the high increase in puplic debt, in an appendix of the Government’s report
analyzed reasons that the state budget met with difficulties but but it still
must be reduced revenue to support the business, Government budget and
debenture bonds were used to focus on investment for development and
construction of infrastructure. At the same time, there must be devoted to the
implementation of social policies and wages. On the other hand, the structure
of foreign preferential loans tend to decrease over the years because Vietnam
has entered the group of middle income countries, the proportion of domestic
borrowing increased and the mobilization of government bonds mainly under 5
years resulted in direct debt obligations of the Government in the short-term
increase. In this context, we still ensure full repayment, not to generate
delinquency.
Thus, the
explanation of the Government on public debt was clear, public debt indicators
remain at a safe level. However, on some social networks, some people have the
wrong information about public debt and “judged” that: “Public debt crisis in Vietnam is in the offing”, “Vietnam’s public dept is going to bankrupt”, “Vietnam's economy is coming to an end”, “Public
Debt in Vietnam
can not afford”... This information is provided for the purpose of alarming the
public, making people doubt the leaders of the Party, the executive management
of the Government.
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All comments [ 10 ]
Vietnam closely follows the set targets, including a GDP growth of around 6.5 per cent, inflation below 10 per cent, a trade deficit of less than 13 per cent, a reduction in the poverty rate by 2 per cent and job generation for more than 1.6 million workers.
Ministries and localities should implement solutions together, particularly in monetary and financial regulations, investment in agriculture and economic restructuring.
The resolution has controlled the gold and foreign currency market and reduced monthly inflation rate to below 1 per cent.
Epidemics and disasters have caused loss of life and property as well as hindrances to agricultural production, and that pushed up input prices in agricultural production, in addition to high interest rates and difficulties in credit access.
We should focus on restructuring public investment towards sustainable development.
We also must reach consensus on prioritising macroeconomic stability to ensure sustainable economic development; increasing national economic competitiveness; maintaining socio-political stability; democracy and discipline in society.
All aims at laying a foundation for the country to become a modernity-oriented industrialised nation by 2020.
The Government soon stabilise the organisation, especially the assignment of functions and tasks of each ministry for smooth, effective and transparent operations.
Ministries, branches and localities to speed up administrative reform, fight corruption, and minimise the mechanism of “giving” and “asking”, especially in budget allocation and major construction investment.
The Government should pay more attention to agriculture, particularly the effective implementation of a national target programme on new rural development.
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