VietNamNet Bridge - The topic of the dialogue at the Vietnam Development Partner Forum (VDPF), the forum for Vietnam and its development partners, was about the resources Vietnam will rely on to develop its economy. 

Vietnam's inflation rate is low in 2015

The World Bank Vietnam Country Director Victoria Kwakwa, when delivering the opening speech, after mentioning many concerns about Vietnam’s development, raised a question about where the resources to fund the ambitious development plan for the next five years will come from.

Four hours later, after many discussions among representatives of ministries, branches and donors about the ‘bottlenecks’ that hinder Vietnam’s development, the Vietnamese PM Nguyen Tan Dung gave an answer to the question.

“What resources will Vietnam rely on to develop in a rapid and sustainable way? The resources will come from the effective implementation of the full market economy mechanism. This will allow us to mobilize domestic resources with 92 million Vietnamese living in Vietnam, 4.5 million Vietnamese overseas and international friends,” Dung said.

“If the market economy regulations cannot be improved, it will be impossible to mobilize necessary resources for economic development,” he said. “People will determine the success and failure of the development process. Therefore, we will create most favorable conditions for businesses to develop. These will be the major resources of the economy.”

“What resources will Vietnam rely on to develop in a rapid and sustainable way? The resources will come from the effective implementation of the full market economy mechanism," Nguyen Tan Dung, Vietnamese PM

The dialogue was short, and it took place amid numerous issues at the forum. However, it is vital to the future of Vietnam. 

Kwakwa has every reason to raise that question. As the preferential loans for Vietnam have shrunk as Vietnam has become a lower middle income country, Vietnam will have to rely on domestic resources. Meanwhile, the ratio of revenue on GDP has decreased from 27 percent to 21 percent.

A WB report presented at the forum showed the ‘hot’ fiscal status. It said the fiscal pressure was hard. The decrease in the collected corporate income tax and the oil price fall both led to the decrease in budget revenue in the first nine months of the year. 

Meanwhile, the expenditures have increased as a result of the higher regular expenses.

The report also pointed out that if the situation cannot be improved, the public debt will be increasing rapidly and the total public debt would hit the limit of 65 percent of GDP in the medium term.

The World Bank thinks the budget deficit has raised concerns about the medium-term fiscal sustainability and public debt.

The warnings, according to economists, are worth considering, especially when some Party agencies have been reported as having no more money to spend and one public hospital has no money to pay physicians.


TBKTSG