Prime Minister Nguyen Tan Dung asks Government agencies and local authorities to step up efforts to implement strategic breakthroughs focused in the establishment of a robust market economy, infrastructure development and human resources. — VNA/VNS Photo Huy Hung

HA NOI (Biz Hub) — Prime Minister Nguyen Tan Dung asked Government agencies and local authorities to step up efforts to implement strategic breakthroughs focused in the establishment of a robust market economy, infrastructure development and human resources during an online conference yesterday.

He said Viet Nam must continue to push administrative reforms and build towards a market economy, whose priorities would be to support and facilitate business.

The PM noted that as infrastructure played a key role in national development, the Government must pay close attention to the level of public debt while building policies and mechanisms to encourage investment from the private sector from both inside and outside of the country.

On the topic of human resources, the PM urged local authorities to help businesses utilise new and modern production technology.

He also stressed the importance of achieving progress in other social aspects including culture, medical care, education and the environment.

With the finalisation of the Trans-Pacific Partnership (TPP), the Viet Nam-EU Free Trade Agreement (EVFTA), the Viet Nam-Korea Free Trade Agreement and the formation of the Asean Economic Community (AEC) the country has become deeply integrated with the global economy.

PM Dung said the key to successful integration was to enhance the country's competitiveness so that its businesses and products would have the chance to compete.

Inflation control

On the sidelines of the conference, Governor of the State Bank of Viet Nam (SBV) Nguyen Van Binh said special attention must be paid to inflation as it could surpass the sub-5-percent target set by the National Assembly for 2016.

Binh stressed that very little room remained for decreasing prices of essential goods, especially crude oil.

While prices of State-controlled commodities could rise, the pressure of the economic growth target of 6.7 per cent next year might also push inflation out of control.

He noted that the low inflation in 2015 (less than 1 per cent) was mainly due to external factors, especially the falling global prices of oil and other staples. This year's inflation would be around 3 per cent if those factors were excluded.

Binh asked ministries, sectors and localities to hold a firm grasp of prices, particularly essential goods.

Additionally, the SBV would strive to maintain overall interest rates or cut down average mid and long-term lending rates by 0.3 – 0.5 percent, the Governor said.

He cited the fact that the current average interest rates had helped to keep inflation under 5 per cent, so a sharp rate decline was unlikely.

The central bank would also work to keep exchange rates stable but not fixed, he noted, adding that new exchange rate mechanisms would be introduced in early 2016 to align domestic exchange rates with international financial and monetary vagaries, ensuring both flexibility and stability.

Credit growth of less than 20 per cent would match the targeted economic growth of 6.7 percent and support the bond market as a relatively large volume of bonds were expected to be issued next year.

Binh concluded the policies could guarantee macro-economic stability and economic recovery.

Trade deals

Viet Nam was poised to sign the Trans-Pacific Partnership (TPP) agreement in early February next year, said the country's Minister of Trade and Investment Vu Huy Hoang.

The Trade Ministry was working on a finalised translated version of the TPP before introducing it to the public at the start of 2016.

Another major international trade deal, the Viet Nam-EU Free Trade Agreement (EVFTA), is scheduled to take effect in 2017. A translated version of the deal would also be released in the first quarter of 2016.

Hoang said when the trade deal was signed, Viet Nam would have a grace period during which the Government could choose to set up technical barriers or maintain existing ones to protect Vietnamese products before the TPP kicks in.

He noted that once major trade deals took full effect, the country's business sector would face both great opportunities and fierce competition.

The trade ministers of Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Viet Nam concluded talks in October this year after more than five years of negotiations.

The TPP has been hailed as a historic trade deal that will bring higher standards to nearly 40 percent of the global economy and add nearly US$300 billion a year to global GDP. — VNS