Capitalising on the advantages and opportunities brought by economic integration to achieve a breakthrough in economic development and promote the business community and institutional reform will be Viet Nam’s focus in the near future, according to the Ministry of Planning and Investment.

Speaking at the Vietnam Economic Conference on the theme “Breakthrough Opportunity for Business Growth” in HCM City on Tuesday, Deputy Minister Nguyen Van Hieu said Viet Nam has become a member of most global multilateral financial organisations, signed more than 60 agreements for the encouragement and protection of investment, over 60 double tax avoidance agreements and over 90 free trade agreements.

“Overall, free trade agreements, especially new generations of free trade agreements, would help Viet Nam integrate deeper into the global economy and create conditions to boost its economic development and restructuring, promote trade, attract foreign investment, create more jobs, develop the manufacturing sector, improve labour productivity and the competitiveness of the economy.”

The economy was relatively stable last year and inflation under control at 3.54 per cent.

Viet Nam has worked to complete institutional reforms and improve the business environment, help small and medium sized enterprises develop and attract foreign direct investment (FDI), Hieu said.

Delegates urged the Government to focus on encouraging and creating conditions for the private sector to develop.

Vu Tien Loc, chairman of the Viet Nam Chamber of Commerce and Industry, said "Viet Nam has good FDI prospects".

However, to achieve a breakthrough, institutional reforms are needed, he said.

Loc said in institutional reform there are two imperatives: developing a comprehensive institutional system and scrupulous enforcement of regulations.

Economist Tran Du Lich said there was an overlap between the functions of ministries and localities.

“The country has been implementing institutional reforms for many years but they have not met expectations since we have not carried out comprehensive reforms.

“The Government currently focuses on comprehensive reform of the institutional system to create favourable conditions for businesses and boost economic development.”

Financial market

At a panel discussion on the financial and banking market, Pham Thanh Ha, director general of the State Bank of Viet Nam’s Monetary Policy Department, said the good economic growth of last year would create momentum for the economy as well as the financial market.

"Interest rates are expected to be steady this year based on factors like steady world oil prices, lower inflationary pressure and a depreciation of the US dollar," he added.

Ha Huy Tuan, vice chairman of the National Financial Supervisory Commission, said exchange rates and money supply were forecast to be stable this year thanks to positive factors both within and outside the country.

But he warned about challenges faced by the financial and banking sector since Viet Nam is a highly open economy but still small and the development level of its financial and banking sector is still low.

With such openness, any volatility in the global economy would affect it too, he said.

The economy as well as the banking and financial market were still in transition and would need to adopt international accounting and auditing standards, he added.

Many delegates said there was a huge opportunity to maintain high growth due to positive factors within and outside the country.

Organised by the Viet Nam Economic Times, the 12th conference attracted executives from more than 300 local and foreign firms. — VNS