VietNamNet Bridge – The National Assembly held a question and answer session with the ministers of industry and trade, transport, finance and agriculture and rural development, on Saturday.

Trade deficit

Controlling the trade deficit was one of the issues Minister of Industry and Commerce, Vu Huy Hoang, was grilled on by National Assembly deputies.

Minister Hoang said world price hikes, particularly on imported products such as steel, fertiliser, plastics, petroleum and fibre, were the key reasons behind the problem.

The minister admitted shortcomings remained in forecasting the market, as well as the impact of the country's accession into the World Trade Organisation (WTO) on business activities.

He said increasing exports was vital to reducing the deficit, and local businesses needed to diversify the commodities they produced to incorporate less traditional exports such as farm produce and minerals.

But he also warned producers not to forget about key export staples, such as garments, textiles, footwear, furniture, electronics, agricultural and aquatic products.

The development of support industries for the production of machinery, equipment and materials was also needed to cut down on imports, Hoang said.

According to the minister, by 2015, Vietnam would not have to depend too much on imports, as a series of oil refineries and steel ingot production project, would be in operation across the country.

The fertiliser plants in southern-most Ca Mau Province and northern Ninh Binh Province would also be turning out products by then. The apparel sector's plan to produce 1bil metres of cloth a year by 2015, would also ease the situation, he added.

Minister Hoang also pointed to the need to raise standard requirements for imports, and apply measures to bring local products into line with WTO regulations and agreements that Vietnam signed to protect domestic products.

Overall, the export picture was bright, the minister said, with many key staples boasting a 20% growth-rate.

"This is an important achievement, particularly just after one year of Vietnam joining the WTO," he said.

Farmers integrate

Deputy Nguyen Ngoc Dao from Hanoi asked Minister of Agriculture and Rural Development Cao Duc Phat about the policies for farmers during the integration period.

Minister Phat said the agricultural sector had to raise its competitive edge in order to bring more benefits for farmers. Investment would be made into both highly competitive areas, such as rice, coffee, rubber and cashews, and less competitive areas, such as animal breeding, and fruits and vegetables. These two areas, animal breeding and fresh produce, still needed a lot of development, Phat said.

The ministry was carrying out hybrid research programmes to create better varieties of seeds for farmers, the minister added.

The southern provinces were applying the three increases (output, productivity, quality) and three decreases (pesticide, fertiliser, seedling) programme, he said, and encouraging results had been attained in intensive farming in the northern provinces.

Animal husbandry remained scattered. Therefore, policies should be built to help farmers develop concentrated animal breeding and to strengthen the veterinary services, Phat said.

Nguyen Huu Nhi from Nghe An asked the minister when Vietnam would master the technology needed to produce hybrid rice varieties, which would help farmers reduce costs. Phat said Vietnamese scientists were in the process of mastering some of the technologies, though only a few.

Greater efforts needed to be made to ensure the supply of 70% of wet rice seed for domestic production by 2010, Phat said.

Asked how much of the country's milk came from local cows, Phat said local cows last year produced 215,000 tonnes of milk, meeting 22% of domestic milk plants' demand.

More farmers have started raising cows due to the rising price of milk in recent months, he added.

Phat also told the National Assembly that the gap between rural and urban areas was becoming larger. He said there was no exact data yet on the incomes of farmers, but the living standards of farmers were considerably lower, and were improving more slowly than in urban areas.

Phat said this sector of the economy, which had a low growth rate of just 3.5-4%, was also the source of 73% of the population's income. Meanwhile, the industry and services sectors and the urban economy grew at a far greater rate, creating the danger of an even bigger gap developing between urban and rural areas.

Phat said the year the government had allowed fee exemptions and reductions for irrigation, agriculture and the implementation of drastic measures to prevent diseases in crops and livestock and limiting the damage caused by natural disasters.

As a result, 2007 was considered a bumper year for farmers, and their living standards are continuing to improve, despite natural disasters, diseases and price hikes slowing the increase of their incomes.

Phat said Vietnam has been presented with both opportunities and challenges through joining the WTO, and the same is true of the agriculture sector.

The country's main task was to sharpen the competitiveness of its farm produce, so as to increase farmers' incomes, eliminate hunger and alleviate poverty. Through this, farmers would be able to cope with market upheavals, he added.

This year, the agriculture sector took a number of concrete steps towards overcoming the problems it faces, including the overhaul of farming practices. However, more effort needed to be made over the coming years to ensure further growth, Phat said.

Issues in transport

Minister of Transport Ho Nghia Dung took the podium on Saturday afternoon to speak before a heated meeting hall rife with the people's questions.

The deputies brought topics such as repeated traffic accidents, the new helmet law, urban traffic jams and poor progress in financing transport projects to the transport minister's attention.

Deputy Nguyen Duc Hien of Quang Ngai asked the minister about plans to minimise the number of motorbike traffic accidents and raised concerns over the low quality and high price of helmets, the wearing of which will become law for motorbike riders nationwide on December 15, as regulated by the Government's Resolution 32/CP.

Minister Dung responded that most accidents, up to 75%, resulted from mistakes committed by riders of motorbikes.

"In order to solve this problem, several measures must be undertaken, such as distributing information [about traffic safety], educating people about traffic laws and encouraging people to abide by these laws," Dung said.

Other solutions named were enforcing stricter penalties for offenders, reducing the number of new motorbikes by implementing higher taxes and fees for vehicle registration and road maintenance and farther developing public transport in major cities.

Referring to the quality of helmets, the minister said that the Government had assigned the Ministry of Science and Technology to monitor the issue.

Answering deputy Nguyen Phu Dong of Bac Ninh's question regarding the impact of Government Resolution 32, the minister reminded the hall that this was not the first time the country enforced helmet wearing.

Dung said serious head injuries had already reduced dramatically over the past three months, since enforcing the resolution on national highways.

Other deputies, including Luong Phan Cu of Dac Nong asked about the ministry's responsibility in dealing with the gridlock situation in big cities like Hanoi and HCM City.

The minister replied that his ministry was responsible for the overall management of the sector but that traffic jams were the cities' responsibility.

The ministry could not re-route traffic in order to reduce urban jams. However, to ease the situation, the ministry was carrying out seven major groups of solutions, including prioritising the construction of new city roads and developing infrastructure for supporting roads and highways.

The minister acknowledged the problem of traffic funding disbursement, especially in projects using Government bonds. Only about 50% of the allocated funds from the State's budget or Government bonds for this year had been disbursed.

He also admitted that the situation arose due to the ministry's inability to effectively manage the construction and due to the weak financial capacity of investors and project management units.

In addition to land clearance and relocation issues for transport projects, the rise of construction materials and related services were additional reasons given for disbursement delay.

Deputy Danh Ut of Kien Giang received written responses from the minister regarding the delay in construction of three major roads in his province. However, Ut remained concerned and commented that an eight-year delay of three national roads in his province was too heavy a burden for local residents.

Other deputies also expressed worry over the insufficient small transport constructions, meant to serve the daily needs of local people in rural and remote areas.

Responding to the deputies, the minister shared similar concerns, promising that he would come to "inspect the sites of those construction areas to find possible solutions."

Deputy Ngo Van Minh asserted that, the minister was responsible for the disbursement delay affecting so many people to such detriment. The funding delay led to construction delays, and the people affected by road constructions, including those displaced for road expansion, were suffering the consequences.

The minister acknowledged the fault and promised to work alongside relevant agencies to speed up financial allocation.

Problems in finance

Minister of Finance Vu Van Ninh spent Saturday morning answering questions about inflation control, price hikes, financial errors in corruption cases and financial policies on popular goods such as imported cars.

Ninh named four major reasons for the rapid increase in the Consumer Price Index over recent months, an 8.2% rise in the last month alone. The increase was attributed to: a similar rise in prices on the world market; the consequence of natural disasters; the growth of foreign invested capital and official development aids; and an increase in people's average incomes.

The ministry had applied several solutions to control the price surge and thereby inflation. The ministry asked related institutions to increase their foreign currency reserves, withdraw cash from market flows, delay price increases and modify tax policies of certain goods while enterprises were urged to cut production costs.

Ninh said the solutions had slowed price increases in the last two months, and there had been no sudden price rises in any goods, with some even showing a slight price drop.

Deputy Tran Van Suong of Long An said the minister's explanation was not very persuasive, commenting that 18 products enjoyed reduced import taxes while maintaining high sales tags.

The minister, replied that the tax accounted for a very small portion or the final price of products.

Regarding the responsibility of the ministry in financial errors relating to the Government's 112 Project, a corruption case, the minister said the State's Audit had identified some errors.

The minister claimed ministry responsibility for paying related parties based on contracts and agreements.

The State Treasury was not involved in assessing the project's outcome. Therefore, it was not responsible for the quality or completion of the project.

"If there was an under-the-table agreement between the investors and the contractors, the State Treasury could not have known about it because the Treasury is not responsible for contract implementation."

Regarding prices of items like milk, medicine and cars, the minister said they had identified some problems with each case fined and asked to pay a surplus for selling at high prices while enjoying tax reductions.

Car prices, which some deputies said were much higher than in neighbouring countries, was reducing due to tax reductions and new policies enabling cost cuts of the final product.

Other questions revealed issues over possible price drops in electricity, aimed at thereby helping to reduce product prices, and the delay in fund disbursement for infrastructure improvements.

The minister said they were attempting to speed up the disbursement task.

He said that the current price of electricity was already lower than its supposed sales price and the government was only able to maintain the current price.

(Source: Viet Nam News)