VINACHEM

He told more than 300 delegates at the Mid-year Consultative Group (CG) Meeting in Rach Gia City, southern Kien Giang Province, that the Government has three goals for 2010.

"We will focus our efforts on stabilising the country's macro-economy and take measures to prevent high inflation from returning.

"For 2010, we will try our best to attain a GDP growth higher than 2009 at 6.5 to 7 per cent," Dung said.

The Government will also take steps to improve social welfare, speed up hunger eradication and poverty alleviation programmes and maintain social and political stability, the Prime Minister said.

Dung said that inflation will be kept between 7 and 8 per cent this year.

In the first five months of 2010, Viet Nam's economy has stabilised. The country attained a GDP growth rate of 5.9 per cent in the first five months and would see it increase to 6.1 per cent in the first half of the year, he said.

Meanwhile, inflation was kept down to 4.5 per cent in the first five months, he noted.

Dung said the Government had kept the CPI index at 4.7 to 4.8 per cent and continues to take measures to control trade deficit so as to keep it well under 20 per cent of the country's exports.

The Government would also continue efforts to limit budgetary overspending at below 6 per cent, increase the country's foreign currency reserves and flexibly manage the currency market, he added.

He reiterated the Government's aim to turn the country into an industrialised and manufacturing hub by 2020.

The Prime Minister assured delegates that the Government would strive to improve the country's market economy mechanisms and create an equal business environment for the State, private and the foreign-invested enterprises.

It would also focus on rapid development of human resources, especially in the hi-tech sector, and to improve infrastructure facilities, especially in big cities, he said.

Dung thanked the World Bank, ADB, IMF and other donors for helping Viet Nam overcome difficulties caused by the global economic crisis between 2008 and 2010.

He said their support had helped Viet Nam maintain macroeconomic stability and lower the inflation rate from two to one-digit figures in 2009.

Praised

A tighter monetary policy and restrained fiscal policy helped narrow Viet Nam's trade deficit in the first quarter of 2010, said Benedict Bingham, resident representative of the IMF in Viet Nam.

"If these favourable conditions are sustained, the Government's objectives for 2010 appear within reach. We project real GDP growth at 6.5 per cent, supported by a continued recovery in private investment, consumption and non-oil export growth," he said.

The IMF expects inflation to rise above the Government's target of 8 per cent, but provided that food and fuel prices stabilise.

"The challenge, at this point, lies in maintaining the current macro-economic policy stance and adjusting monetary, financial and foreign exchange policies to the evolving conditions of domestic and international markets, while gradually scaling down the crisis stimulus support to the economy," said John Hendra, Resident Coordinator of the UN in Viet Nam.

World Bank Country Director in Viet Nam, Victoria Kwakwa, said the mid-year CG meeting was taking place at an interesting time in the country's development, as it had just attained the Medium-Income Countries (MICs) status ahead of schedule.

However, enormous challenges remained, she said, citing the "unfinished low-income country agenda" including ethnic minority poverty, quality of basic education and health services, and access to clean water and sanitation, especially in rural areas, and in rapidly expanding urban centres.

As a middle income nation, it was important to boost higher education and create an enhanced skills base, she said.

"Then there are cross-cutting challenges such as climate change, strengthening governance including the fight against corruption; and building a more open society," she added.

Kwakwa said the climate change challenge was particularly significant in the Mekong Delta.

"Overarching all of these is the need to continue Viet Nam's transition to a market economy with socialist orientation and to achieve the objective of a modern, efficient and competitive economy," she said.

Completing the reform of State-owned enterprise sector was a key task to achieve this target, Kwakwa emphasised.

She said the global context and environment would become more challenging in the coming years and so the pressure to succeed would be greater on all countries including Viet Nam.

Kwakwa emphasised that this year was a critical year as Viet Nam was preparing the next 10-year development strategy, and the next five-year plan.

"We will continue to find ways to make our support to Viet Nam align with your objectives as effectively as possible," she said.

The Minister for Planning and Investment, Vo Hong Phuc, said Viet Nam would invest US$350 billion in building development projects during the next five years, with "due attention to infrastructure". He added that the private sector would be mobilised to participate in these projects.

Participants were also told that Viet Nam would reduce the use of ODA from 100 per cent at present to about 40 per cent in the future.

(Source: VNS)