Vietnam struggles to meet 6.7% GDP growth rate

Several economists and commentators have said that Vietnam needs increased administrative reform and investment in other sectors to boost GDP as oil is not a sustainable answer.



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Nguyen Xuan Thanh from Fulbright University Vietnam 



The growth rate in the first six months was low so in order to meet the 6.7 percent GDP growth rate for the year, growth for the remainder of the year would need to reach 7.4%. According to the General Statistics Office, this was currently unlikely.

Nguyen Xuan Thanh from Fulbright University Vietnam said the growth rate in the second quarter higher than the first because of the retail and tourism and services industries. Vietnam must realise where its strengths are right now.   

"For the last half of the year, we can boost growth from construction, manufacturing and processing industries. I predict the growth rates of the next quarters will be around 7% and the year's growth rate will be 6.5%," he said.

Thanh disagreed with the opinion that Vietnam should extract one million tonnes more crude oil to boost growth rate. Oil makes a huge contribution to the GDP but its decreasing prices also badly affect GDP, he said. Moreover, Vietnam is trying to be less dependent on oil in order to improve the economy with other industries.

"What'll we do for the next quarter, next year? Keeping extracting more oil? There's no guarantee that we'll be more independent from it if we'll need to extract even more oil than this year," he said.

Thanh blamed the judicial system for not being independent for the failures of the private sector. He said there were so many firms declared bankruptcy because they didn't feel like they were protected by the law.

Le Dang Doanh, former head of the Central Institute for Economic Management

Both consumer demand and investment increased and contributed 12.7% to the GDP in the first six months but the growth rate had dampened to 5.7% due to the trade deficit. Thanh said not much should be expected from FDI firms as they import large amounts besides impressive growth rate.

Le Dang Doanh, former head of the Central Institute for Economic Management, said only when redundant spending was cut could the GDP growth rate could improve.   

The provincial competitiveness index report last year show that over 60% of asked firms said they actively paid bribes to avoid harassment. He said when the bribery problem was curbed, only then could Vietnam have a creative economy.

"Only 10 out of 100 start-up companies can survive. It will be a success if 30 percent of start-ups survive as that will mean we have completed administrative reform and provided sound policies," he said.

He went on to say that extracting more oil was not the way to go but speeding up state-owned firm equitisation, supporting the private sector, improving the transparency and fighting corruption were important.

Dtinews

Vietnam struggles to meet 6.7% GDP growth rate, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
 
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