Basing on information about limitations and weaknesses of our economy in 2016, a number of people deliberately attribute them to the Party’s economic guidelines. This is an unilateral fallacy with evil plots.

With the spirit of acknowledging the truth, the 2nd Session of the 14th National Assembly and the 4th Plenum of the 12th Party Central Committee frankly pointed out limitations and weaknesses of our economy while discussing reasons and remedial measures.

Rice export at Saigon Port (photo: VNA)

Nevertheless, despite reality and efforts made by our whole Party and people to overcome difficulties, several people who are discontented with the leadership of the Communist Party of Vietnam have commented that the Vietnam economy picture includes dark tones only, which aims to cause a panic within the society. Concerning information about the rapid increase of public debt, export and economic growth not meeting the target, measures to withdraw State capital from the enterprises in which the State does not need to hold the biggest shares, such as Vinamilk, Sabeco, Habeco, etc., the guideline on privatizing the construction of infrastructure (concession of exploiting several highway lines, seaports, airports) to implement one of the three breakthroughs identified in the 11th National Party Congress, they rush into affirming that the economy of Vietnam is entering a cul-de-sac. They deliberately attribute the economy’s weaknesses to the maintenance of the Party’s economic guideline, saying that only when the Party “stops socialist orientation”, could the Vietnam economy avoid the risk of another crisis.

We could affirm immediately that it is only one-sided judgment of a number of people. The National Assembly and the 12th Central Party Committee’s assessment of the above-mentioned limitations and weaknesses proves our Party and State’s courage to face the truth to find out the “illness” of the economy, reasons as well as measures. Those limitations and weaknesses have resulted from both objective and subjective conditions, not from the Party’s economic guideline.

We all know that the Party’s economic guideline in the period of reform is a system of viewpoints and orientations on developing a socialist-oriented market economy; stepping up industrialization and modernization; innovating growth model, restructuring the economy; actively and proactively engaging in international economic integration process. That guideline was first laid down in the 6th National Party Congress, supplemented and completed in the following Congresses. Implementing the economic guideline, our country has gained achievements of historic significance. From being a food importer, we are now among the world top food and other agricultural products exporters. We have also got out of the state of an underdeveloped country to become a middle income developing one, with a GDP of 2,300 USD/person/year in 2016 (compared to 2,109 USD in 2015), increasing by 20 times in comparison with the pre-reform period. The infrastructure has changed rapidly, creating a new face of the country and making contributions to developing the economy and society and strengthening defence and security. The structure of the economy has changed positively, with industry and service accounting for 82.6% of 2015 GDP. The percentage of poor household has dramatically decreased from 58% in 1993 to below 4.5% in 2015.

Report by the National Financial Supervisory Commission revealed in November 2016 that by the end of 2016 we could fulfil and exceed 11 of 13 set plans. The macroeconomy continues to be stable, inflation is under control (about 5%), quarterly economic growth rate increases constantly. Major proportions of the economy is basically maintained. Monetary and stock markets have seen positive developments; foreign reserves reaches a record high of more than 40 billion USD. According to the World Bank's Report, Vietnam’s business environment considerably improves and increases 9 positions (from 91st to 82nd) in comparison with the previous year. The number of newly registered businesses increases rapidly, with 101,683 new ones after 11 months, by 17.1% in quantity and 48.1% in registered capital in comparison with the same period of 2015. The latest report by Nikkei Market has shown that PMI index of Vietnam - an indicator of manufacturing sector - has increased constantly, reaching 52.9 points in September and 54 points in November. This is the 12th month Vietnam gains more than 50 points for PMI. FDI has also grown rapidly, expected to reach $18.103 billion after 11 months of 2016, of which 14.3 billion has been disbursed, increasing by 8.3% in comparison with the same period of 2015, demonstrating the credibility of foreign investors for Vietnam’s business environment. The number of international tourists to Vietnam before December 2016 is 9 million, exceeding the target of 8.5 tourists set for the whole year, bringing tourism turnover an increase of 18.6% in comparison with the same period of 2015. In spite of the fact that export targets have not been met, a positive change in the structure of export is a good sign. This is the first time value of mineral export is no longer the biggest contributor to the economy. Instead, manufacturing industries and services are the biggest ones now. The export volume of domestic businesses continuously remains positive growth (4.9%) for the whole year after constant negative growth in the previous year. In agricultural field, rice export volume decreases sharply due to the world’s declining demand, but clean fruits and vegetable have entered markets of 50 countries and territories, including the U.S., Japan, Australia. Accordingly, the value of fruits and vegetable export (2.5 - 2.6 billion USD) first surpassed that of rice export, which helps create new motivations for agriculture in the coming time. That is also a progressive trend in line with the guideline on restructuring the economy, which has been defined over the past years, particularly in the Socio-economic Development Strategy for the period  of 2010 - 2020 passed by the 11th National Party Congress.

Regarding public debt, it is true that it has increased rapidly over the past years but within the limit allowed by the National Assembly. Notably, the structure of public debt has changed positively (increasing domestic debt and decreasing foreign debt) and been strictly controlled by the National Assembly. The Government is adopting various measures to decrease public debt, striving to considerably decrease overbudget below 3.5% compared to GDP. Withdrawal of capital from state-owned businesses and privatization of infrastructure construction seriously directed by the Government are not “passive” actions like several people distort. They are still within the guideline on developing a multi-sector economy identified in many previous National Party Congresses. In this regard, rearrangement and restructuring of state-owned businesses have been implemented in many years, particularly since 2001. It is the guideline that the State only maintains businesses having 100% of their capital invested by budget and holds dominant shares in businesses which are in key fields, important areas, defence and security, and in the fields which need high-tech and huge investment, and businesses from other sectors do not invest. The other state-owned businesses must be privatized and withdraw their capital according to market mechanism. Privatization and redistribution of State’s resources including human resources, property, natural resources, natural monopoly and other advantages aim to help develop private business and enhance the competitiveness of the economy.

The things mentioned above prove that Vietnam’s economy picture does not include dark tones only. According to the WB’s update Report on Vietnam’s recent economic developments released in early December 2016, despite a fragile global environment, Vietnam’s economy remains resilient. The Asian Development Bank’s Update Report on Asia’s Potential Growth 2016 also stated that Vietnam’s economy is operating rather effectively in the context of many challenges. Predicting Vietnam’s economic prospect, Mr. Sebastian Eckardt, a senior economist of the WB in Vietnam believes that Vietnam’s growth in medium term is positive. Those are reliable and objective assessments which are completely different from one-sided comments of several people who do not see the wood for the trees. Those comments and fallacies must be severely criticized.

Nguyen Ngoc