Wednesday, October 26 2016


NA economic targets did far better than expected

Update: May, 19/2015 - 08:45

Ten of the 14 economic targets by the National Assembly last year were surpassed. However, there are concerns about the positive results. Thoi Bao Kinh Te (Economic Times) Newspaper talks to Mai Xuan Hung, deputy chairman of the NA Economic Committee.

In its session opening to-morrow, the NA will review the socio-economic situation for 2014. In fact, the socio-economic situation is better than in the report delivered by the Government in the last NA session last October. Do you agree?

In the last session, the Government reported the NA's implementation of socio-economic development in 2014. After reviewing it, the NA noticed that many targets did better than revealed in the report. Macro-economic balances were more stable.

GDP was estimated to have increased by 5.8 per cent. But in fact, the index reached 5.98 per cent. This compares with 5.42 per cent and 5.25 per cent in 2013 and 2012. The index of industrial production increased by 7.6 per cent in comparison with 5.9 per cent in 2013.

Agricultural, forestry and fisheries also produced higher growth rates than in recent years.

The total budget revenue reached VND863.52 trillion (US$39.6 billion), an increase of VND17.2 trillion over the amount reported to the NA.

Consumption price index (CPI) has decreased dramatically. The CPI in 2013 rose by 6.04 per cent, the lowest rise during in the last 10 years. But in 2014, the index was up by 1.84 per cent, much lower than the NA's target of 4.5-4.6 per cent.

The year 2014 was the third year with a trade surplus. Exports reached $1.2 billion, of which industrial products made up the biggest share.

Clearly, it is a nicer picture and a positive signal. However, behind the figures, there are many concerns.

The CPI is an example. There is a big difference in the estimate and real result. CPI can dramatically affect plans for investment and business, therefore it is necessary to comprehensively evaluate the forecast of CPI.

Besides, production and business activities have been facing many obstacles. In 2014, the number of enterprises which stopped operation and were dissolved was 67,832 as compared to 60,737 in 2013.

According to the Ministry of Finance, the number of enterprises that paid corporate income tax reached 50 per cent in recent years.

And the equitisation process for State-owned companies has been slow.

Foreign direct investment (FDI) has made a significant contribution to the GDP growth of 2014. Do you think we should be happy with this?

FDI has been increasing and making a great contribution to economic development. It has accounted for 65-67 per cent of the total export turnover. Samsung Viet Nam contributed $10 billion in trade surplus in 2014 and 2013.

The FDI sector has helped increase foreign revenue to the budget and contributes to macro-economic stability.

However, the FDI sector has not helped improve high technology. Besides, there is a concern that if the FDI sources are withdrawn from the market, this would badly affect to the economy.

What is there in the economic situation that needs attention?

After three constant years of trade surplus, the trade deficit has returned in the first fourth months this year. The trade deficit in the domestically-economic sector has reached $5.7 billion against $3.8 billion in the same period last year. Meanwhile, the FDI sector (including crude oil) has reached the trade surplus of US$2.7 billion as compared to $5.8 billion of the same period of 2014.

Exports seemed to slow down by 6.4 per cent compared to the target of 10 per cent.

Exports from the domestic economic sector have fallen by 5.1 per cent while exports of FDI products have increased by 12.9 per cent in the first quarter this year.

The export turnover of the key products of agro-forestry and fisheries, and fuel and minerals from domestically-economic sector has decreased by 15.8 per cent and 37.2 per cent, respectively.

It is necessary to set up measures to tackle the issue.

How do you evaluate the Government's efforts to improve the investment and business environment?

Business conditions are still obstacles stopping enterprises joining the market. The procedures are still complicated and regulations are overlapped. Doing business is regulated by 900 pages of documents.

In 2014, there were 125 Government decrees, 75 decisions by the Prime Minister, 496 circulars and other 3,930 documents. Therefore, implementation of laws passed by the NA has been slowed down by issuing instruction documents. — VNS

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