Vietnam to issue international bonds for debt swap

VietNamNet Bridge – The Head of the Office of Government Mr. Nguyen Van Nen said at the government press conference on Thursday that Vietnam would issue international bonds to use for debt swap, adding that Vietnam has about $1 billion of outstanding international bond debt that needs to be converted.

"This is the loans that the government borrowed during the time of high interest rates. Now we can borrow at lower interest rates so the government sees this as an opportunity to reduce the amount of interest money. The debt will not change," he said.

This plan gets high consensus in the government. This is the second time in two years the issuance of international bonds was discussed by the government.

Last July, the Ministry of Finance submitted the international bond issuance project but the government decided to issue a separate resolution on this issue.

If this plan is implemented, this will be the third time Vietnam mobilizing capital from the international financial market, after raising a total of $1.75 billion in 2005 and 2010.

At the press conference, the government representative also reported that the total number of new businesses set up in the country in January-August was 47,500, down 9.5% over the same period.

However, the registered capital increased, reaching an average of about VND6 billion ($300,000) per unit. "It means that people now have the confidence to expand production and invest more money in new business", Nen stressed.

Speaking at this month's Cabinet meeting on Wednesday, PM Nguyen Tan Dung stressed the need to restructure the banking system to make it safer and at the same time protect the interests of banks’ customers.

He and his cabinet members also discussed socio-economic issues in August and the first eight months of this year to find ways to help the corporate sector ride out difficulties and fuel economic growth.

The Ministry of Planning and Investment put the nation’s gross domestic product (GDP) growth rate at 5.54% by the end of September, and this signals a recovery. The GDP growth rate is forecast at 5.8% for the whole year.

However, the ministry said there are numerous challenges looming over an unstable macro-economy, low aggregate demand and credit growth and settlement of non-performing loans (NPLs).

To deal with challenges, Prime Minister Dung urged the effective implementation of Resolution 01/NQ-CP to help local businesses out of the woods, improve the market and sustain economic growth.

Dung told ministries, agencies and localities to stick to the already-set goals with a view to forge a solid foundation for higher growth in 2015 and the following years.

He also wanted solutions to improve aggregate demand, boost credit growth, promptly handle NPLs, speed up disbursements of public investment capital, and combat counterfeit products and smuggling.

Economic restructuring should focus on public investment, State-owned enterprises, commercial banks and agriculture.

The Government leader also ordered halving of time for customs clearance and tax procedures from around 500 hours to 200 hours, and insurance from over 300 hours to less than 100 hours.

Procedures on investment, construction, land and electricity access must be streamlined from a third to a half.

The Prime Minister said that if ministries took drastic solutions this year, the nation’s GDP growth rate in 2015 would be higher than this year, at 6-6.2% as calculated by the Ministry of Planning and Investment.

VNE/SGT/VNN

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