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Economic restructuring a success, especially in credit

Update: September, 23/2014 - 09:47

Vice Chairman of the National Assembly Committee for Economic Affairs Nguyen Duc Kien told Nhan dan (The People) newspaper about the Autumn Economic Forum, which opens this weekend in Ninh Binh.

What's the most successful area in the on-going economic restructuring process in our country?

Viet Nam's economic restructuring programme focuses on three sectors - public investment, state-owned enterprises, and credit organisations. In my opinion, among the three sectors, credit is the most successful.

There are two main reasons for me to come to this conclusion. Firstly, it is the success in building a legal foundation. The state's five-year plan, from 2011-2015, was approved by the Prime Minister through a decision signed on March, 1, 2012.

A year later, in February, 2013, the Prime Minister approved the master plan for national economic reform. In other words, financial reform went ahead a year before economic reform.

That's why the PM's decision on March 1, 2012 should be considered as a big legal success and the most important legal document in the course of restructuring our banking system. The document has enabled the banking sector to take actions against weak banks and come up with a road map through 2015. By then, Vietnamese banks should improve in scale, quality and effectiveness.

Secondly, in the institutional field, we were successful in issuing the Law on Deposit Insurance, as well as revising the Ordinance on Foreign Currency and the Decree on Gold Management. These documents have helped to restore law and order in the monetary, gold and the foreign currency markets. They have provided favourable conditions for the restructuring of credit organisations.

In a nutshell, the on-going restructuring of the credit organisations has successfully prevented credit institutions from collapse, while ensuring the nation's monetary security.

What about the reform of state-owned enterprises and public investment?

The reform of state-owned enterprises (SOEs) has also been successful.

A number of legal documents have been compiled and issued, including decrees on improving and modernising the management of both SOEs, as well as state capital invested into enterprises. These documents have helped solidify the legal foundation for SOE restructuring.

However, it is imperative to elevate some of the decrees to laws. Relating to public investment reform, at present we only have the Government Decree No 11/NQ-CP, focusing on measures to control inflation, stabilise the macro economy and to ensure social security.

In addition, in October 2011, the government issued Instruction 1792/CT-TTg on tightening the management of state capital and proceeds from Government bonds' sales.

More recently, in June 2014, the Law on Public Investment was approved by the National Assembly and it will come into force in January 2015. In reality, the number of public investment projects has so far reduced quite considerably compared with the period before 2011.

Will you please give us some information about the up coming 2014 Autumn Economic Forum?

This year's Autumn Economic Forum will cover several topics relating to the reform of the three sectors - public investment, state owned enterprises and credit institutions, as these sectors are intertwined.

Regarding the public investment sector - participants in the forum will discuss whether Viet Nam should adopt preferential policies according to regions or to sectors. However, the policies must be in line with Viet Nam's international commitments.

It is expected that as from January 1, 2015, a formal ASEAN Community will be established, and on January 1, 2018 all of the gracious policies Viet Nam has enjoyed from the World Trade Organisation will expire. These are also the topics which will be covered at the forum.

Regarding the restructuring of state-owned enterprises, participants will discuss how to improve the effectiveness of SOEs so that many enterprises can participate in the global value chain. That's the best way to show that the SOEs have used state capital efficiently.

For credit institutions, we have to allow some weak credit institutions to go bankrupt. The Law on Deposit Insurance guarantees that all depositors' benefits are all protected by the law. — VNS

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