10 recommendations of the Economic Committee

On the occasion of the first session of the 13th National Assembly, the Economic Committee of the 12th National Assembly has just completed the proposal "Vietnam's economy - issues raised in the medium and long term".

The 10-article petition, more than 40 pages long, was compiled based on the opinions of many scientists, economic experts, and National Assembly delegates...

1. For the economy to develop sustainably in the medium and long term, it is necessary to ensure macroeconomic stability firmly and consider this as the top priority in the coming time. Forming a separate "economic development theory" for Vietnam, in which macroeconomic stability is prioritized, will be the premise for the goal of rapid and sustainable economic growth in the following stages.

2. Renewing the growth model and restructuring the economy towards sustainability is an urgent requirement to address the root causes of short-term macroeconomic instability. By a simple addition, in the period 2006-2010, inflation increased by nearly 60% while growth was only 35.1%. These two figures demonstrate that real income and real living standards of people, especially the poor, have declined sharply.

It is necessary to clearly understand the connotation of the concepts of "growth model innovation" and "economic restructuring" so that implementation is consistent and effective in practice.

3. Changing the industrial development strategy to rely mainly on the state economic sector without considering comparative advantages, encouraging industries and sectors with comparative advantages and more efficiency. With the industrial policy being pursued, state corporations and groups receive many credit incentives and hold a dominant share in large public investment projects. Meanwhile, the private sector, although considered more efficient than the state sector in job creation and export, is being "overwhelmed". This will not be able to bring international competitiveness to Vietnamese industries.

4. To thoroughly resolve the trade deficit, one of the important macro balances in the economy, besides exchange rate policy, administrative tools or supporting industry development, the key issue that needs to be addressed in the medium and long term is the difference between savings and investment in the economy.

Solutions to improve investment efficiency and reduce the savings-investment gap must be considered key and central tasks to thoroughly resolve the trade deficit.

5. Resolutely cutting public investment and strengthening fiscal discipline to reduce the budget deficit and stabilize public debt are important factors to ensure macroeconomic stability and sustainable growth in the medium and long term. While increasing budget revenue is difficult to achieve, the solution of cutting public investment and strengthening fiscal discipline in budget spending must be thoroughly implemented.

6. Develop principles and coordination mechanisms in planning and implementing fiscal and monetary policies in a consistent manner and towards the country's priority goals, avoiding the phenomenon of policies being formed by independent agencies pursuing their own intentions.

7. Restructuring the state-owned enterprise sector to ensure the basic task of overcoming market shortcomings and providing public goods and services instead of playing a "leading" role by investing in a scattered and ineffective manner as at present. The Economic Committee recommends temporarily suspending the establishment of administrative state-owned economic groups that are inconsistent with the laws of enterprise development in a market economy.

8. Synchronously develop and restructure the commercial banking system, minimize risks through a system of monitoring the safety of the financial market in general and commercial banks in particular to stabilize the macro economy and develop sustainably.

9. Effective control of capital inflows and outflows (foreign direct investment - FDI, official development assistance - ODA and foreign portfolio investment - FII) is an important factor in ensuring macroeconomic stability as well as minimizing the risk of financial crisis in the medium and long term. It is necessary to soon build and perfect a system of financial monitoring indicators for Vietnam.

10. In the medium and long term, agricultural and rural development should be considered a priority policy in overall socio-economic development strategies and plans.

According to Tuoi Tre