Nguyen Duc Kien, vice chair of the National Assembly’s Economic Committee, which has appraised the economic restructuring plan, talked about some key points in this scheme
Q: Some have opined that the restructuring plan has nothing new whatsoever. Do you agree about that comment?
A: It may be an unfair comment. The crucial point is that the plan has systematically pointed out the weaknesses of both the economy and the executive branch to categorise them in concrete terms. In my opinion, it’s quite clear.
The plan’s key target highlights the redistribution of resources. But your committee maintained that institutional restructuring is of prime importance. How do you explain this point?
This stance of the Economic Committee is based on the three key points indicated by the Party Congress, of which the first involves institutional and administrative reforms. In compliance with this view, the State will regulate macroeconomic issues, leaving others to the hands of businesses and the market. Therefore, institutional changes should be to the forefront of the restructuring process. But they won’t go on their own. Only by institutional reforms will we be able to create new impetus and mobilise investment in infrastructure. To avert policy lags, this course must be taken.
In the plan, State-owned enterprises (SOEs) are still given a very special position. Is it in sheer contrast with the target of effectively redistributing resources?
The Party resolution has stated clearly that the core of the corporate restructuring is the SOE reform. The plan focuses on SOEs because they are managed by the State and so reform can be conducted at ease.
In my opinion, the weakest point in the plan relates to its failure to assess its possible effects on the entire socio-economic development, particularly tSTC relevant to economic growth pace and social welfare.
Some have contended that the restructuring costs depend largely upon the extent to which reforms are implemented. Now that the final decision on how the plan should be carried out has not been made yet, can such costs be calculated?
The plan should have been come up with three or four options together with the corresponding costs. It’s quite different from the story in which a person should first say how much he has and then a house will be built in accordance with his affordability. Money is important, but whether the “house” to be built is compatible with the planning already approved is a different story. Equally important is whether the restructuring implementation suits the development in the current international context. We have to be able to figure out what Vietnam’s economy and its competitiveness will be like by 2020.
Does it mean that being impossible to estimate costs is synonymous with being unable to put risks under control?
That’s true. The restructuring costs must be an integral part of the issue of macroeconomic control and stable growth. Presently, the legislature has passed the government bond issuing plans to 2015, and has outlined public debt strategies as well as plans to cut budget deficit. The restructuring costs must be in line with these financial strategies. Where does the money for the restructuring process come from? If it’s from the State budget, how big will the deficit be and how long will it take for the government to bridge the gap? All these issues will largely decide tax policies and the amount taxpayers are forced to contribute to the State revenue.
What can you say about metallurgy and shipbuilding industries being prioritised in the plan?
The priority order cSTCn by the appraisal body and the plan’s compilers may differ. The plan has yet to answer satisfactorily the public’s questions, particularly tSTC related to the effects the metallurgy industry exerts on sustainable development. The textile-garment and leather-shoe industries have fared much better but failed to attract attention. We should make “shortcuts, [in economic development]” but we shouldn’t be precipitate. A restructuring process which produces the least adverse impact on the people is the only successful restructuring.