Vietnam needs a comprehensive approach to public debt (Part 2 and end)

Kết quả hình ảnh cho nợ công của việt nam

At the formal meeting with the delegation of Finance and Budget Committee of Parliament Vietnam at the Greek Ministry of Finance, Mr. Osman Yarasli, Deputy Minister of Finance said: Greece's public debt accrual within 15 years based on private consumption loans as liquidity of the global financial market at high level and they were affected by the global financial crisis in 2008, private debt converted into government debt as a series of nations required liquidity to private banks. Then the budget deficit at a high level for many years because of government’s spending in social welfare plus the weaknesses in tax administration related to corruption. The GDP fell rapidly from 300 billion in 2006 before the crisis to about $200 billion in 2014, making the repayment capacity more difficult. The problem now for Greece is moderating tax reform and economic growth to generate revenue to repay. They all need a reasonable roadmap to resolve and make sure Greece will perform all well.
According to the experience of Greece, Vietnam needs a comprehensive approach to public debt. From debt limits in the overall strategy of public debt for 10 years and borrowing and repayment plan of medium-term in 3 years; effective use of loans; do not enact policies beyond the budget balance. First of all, Vietnam needs to reduce the budget deficit to the lowest level by using excessive amounts of annual budget to pay debt, strives to reduce the budget deficit down to 3 to 4% per year; thrift in regular spending through downsizing and administrative reform in a practical way. Especial, Vietnam should only borrow to finance investment and development, do not borrow for regular spending. Besides, Vietnam needs to continue macroeconomic stability and Vietnam’s currency value, maintaining sustainable growth. Only then we will keep public debt safe.
The most important issue remains the effective use of loans. Using loans effectively for economic infrastructure development, basic social as a foundation to promote the production, from which the government has revenues to repay. If we use inefficient loans, spread investment, construction projects in progress, the total investment to increase and prolong the project implementation, slow and put into use, embezzlement, corruption causing loss of financial resources ... will gradually lead to loss of ability to repay. Besides, the issue of social policy should be based on the tolerance of the state budget.
With the strict rules of law, enhancement of transparency in lending and using loans, repayment, regular supervision of Parliament, the public debt problems of Vietnam always under control.

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All comments [ 10 ]

John Smith 22/7/15 12:43

The public debt crisis in the EU in addition to the current problems of the Vietnamese economy may have a number of negative impacts on it

Gentle Moon 22/7/15 12:51

EU countries have been increasing protectionistic measures to protect domestic industries, resulting in greater dificulties for Vietnamese exports, in addition to competition from other exporters

LawrenceSamuels 22/7/15 12:52

there was an increase in domestic market competition. In the backdrop of the ongoing public debt crisis and the difficulties challenging the entire global economy, Vietnamese firms are under pressure from foreign investors looking to diversify their market and hedge risks.

Jane smartnic 22/7/15 12:54

To promote high growth, Vietnam had promoted investment very strongly and over an extended period had had an investment-to-GDP ratio, rating second only behind China.

yobro yobro 22/7/15 12:55

in order to manage and prevent public debt crisis, the most pressing requirement is an effective governmental regulatory mechanism in order to control financial activities and the flows of financial sources.

Love Peace 22/7/15 12:56

it is necessary to properly manage and improve efficiency of state investment. In the long term, state investment needs to be actively reduced while investment from non-budget sources needs to increase relative to total social investment; shift the focus of state investment outside of economic activities so as to concentrate on social and infrastructural investment.

MaskOf Zero 22/7/15 12:57

state-owned corporations and enterprises diversifying investment outside of their main business and production must cease.

Pack Cassiopian 22/7/15 12:58

State-owned enterprises should be concentrated on key industries of the national economy, mainly those related to and dealing with socio-economic infrastructure, public services and those pertaining to macroeconomic stability.

Deck Hero14 22/7/15 12:59

systemic stability, prevention of side effects and debt “traps” and practical efficiency in both SOE and financial-banking sector restructuring should be ensured.

Only Solidar 22/7/15 13:00

At the same time, proper care should be taken to effectively handle such matters as firm acquisitions and mergers, unemployment insurance and social welfare.

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