HA NOI — Domestic and international policy makers and financial experts yesterday discussed the global financial crisis and its impacts on Viet Nam, as well as the economies of other Asian countries, with a focus on the reform of State-owned enterprises (SOEs).
The conference was jointly held by the Viet Nam Ministry of Finance, Asian Development Bank and Korea Asset Management Corporation.
Minister of Finance Vuong Dinh Hue said that although the world economy was showing signs of recovery and growth, the situation remained complex and the path to further development would be tough.
"The Eurozone debt crisis continues to pose problems, including the unpredictable price of oil caused by geopolitical instability, high inflation and the austerity measures recently taken by many nations," Hue said.
He said Viet Nam's economic situation improved in first quarter of the year, with only a modest rise in the CPI, for example, only 0.05 per cent in this April, and increasing exports and the State's foreign currency reserves.
However, Vietnamese companies still faced numerous difficulties, accompanied by falling demand and foreign investments.
"Viet Nam is now making plans to restructure the economy and change the development model, with a focus on banks and other financial institutions, SOEs and public debt," Hue said.
Pham Van Ha, deputy director of the Institute of Strategic and Financial Policy, said the crisis happened at a bad time, just when Viet Nam joined the WTO, and that it took a its toll on growth in the country.
"The Government's stimulus package, worth about US$8 billion in 2008 helped the recovery, but it didn't solve systemic internal problems, which resulted in high inflation," Ha said.
However, Ha said that the crisis gave the Government an opportunity to introduce drastic fiscal tightening policy while reducing public investments in order to improve efficiency. With the current economic restructuring plan, he said, the Government was heading the right direction.
The managing director and head of research for ING Asia, Tim Condon, also attributed the root cause of the crisis to the monetary policy mistakes and suggested that Asian governments introduce more rules on the financial system, while applying flexible foreign exchange policy.
"Now is the time for Asian countries to take steps to restructure their industries and economies so they will be well-positioned to face future crises," said Young Chul Chang, chairman and CEO of Korea Asset Management Corp (KAMCO).
Young said that the global financial crisis, which started off in the Eurozone in 2008, put significant financial pressure on developing countries and raised concerns about the prospect of a double-dip recession.
Since 2000, most Asian countries had established their public asset management companies to mitigate and tackle impacts of financial crises on the real economy, but now, as the cycle of crisis has shortened, countries have begun to focus on being prepared for future financial calamities, Young said.
Jun Kyu Lee, senior international economic advisor to the Minister of Strategy and Finance of South Korea, agreed that public asset management company played an important role in mitigating external shocks while safeguarding the economy.
Representatives of asset management companies from South Korea, Japan, China, Thailand and Viet Nam all shared their experiences in handling delinquent debts of SOEs and aiding in their restructuring. All participants supported the idea of launching an international asset management forum to promote the co-operation of related companies in sharing experiences and improving ways to manage and dispurse both public and private assets. — VNS