7-7.3% Economic growth in 2002
According to the government report, to attain the target of economic growth rate of 7-7.3%, the growth rate must be at least 7.5% in the second half of this year. This is a real and heavy task for the time to come.
The government has worked out 8 solution packages to be implemented in the second half of the year. VBF wishes to highlight six solution packages:
Boosting production and business activities, increasing economic growth: First of all, stepping up economic restructuring, improving the efficiency and competitiveness of each industry, region and the entire economy; increasing industrial production, focusing on sectors and products of comparative advantages, low production cost and marketable, especially crude oil ( 300,000 – 400,000 tones more than the plan ), coal ( some 500,000 tones more ); reducing agricultural production cost , ensuring the supply of materials, seeds, fertilizer, insecticide; stepping up the development of services, especially those with fast recovery of capital and important revenue such as tourism, financial and banking services, maritime transport, airlines, post and telecommunications etc.
Expediting the disbursement of investment capital: accelerating the implementation of the capital construction plan of 2002, concentrating investment capital for projects that are highly feasible and can be complicated in 2002; ministries, cities and provinces reviewing investment programmes and projects from the State budget to concentrate on priorities and targets of the plan, providing counter capital for ODA projects, ensuring the schedule of the signed agreement, especially projects to be completed by 2002 and 2003; continuing the implementation of Resolution 9/2001/NQ-CP of the government on attracting and improving the efficiency of FDI in 2001-2005, making the investment better and even more attractive than in regional countries; amending Decree 52/CP and 12/CP
on management of investment and construction and Decree 432/CP on State development credits to remove current constraints and problems and accelerate the investment.
Implementing comprehensive solutions to remove hurdles and attain highest export value: increasing the export volume of products comparative edge in prices such as aqua-products, rice, coffee, textiles and garments, footwear, crude oil, coal, electronics and parts, mechanical products, fruit and vegetables, fine art articles, etc, in particular, accelerating the purchase of rice from farmers and signing, additional contacts for rice export; encouraging exporters to sign product consumption contracts with farmers. Exporters and producers having product consumption contracts from, the beginning of the crops to be granted loans for production, processing, product consumption as well as preferential treatment in commercial contracts of the government. Reviewing input service expenses of export products and reducing to reasonable levels such fees as warehouse, port, cargo handling, maritime and banking services, road, post and telecommunications and customs. Continuing the exempt of quota and customs fee to export products until December 2002, especially, expansion programme of new products or in new markets.
Continuing the reform and improvement of Sate-owned enterprises: Experimenting with the model of parent companies in corporations permitted by the government; selecting some State-owned enterprises to experiment on the transformation into one-member limited liability companies defined by Decree 63/ 2001/ND-CP of September 14, 2001 of the prime minister, renovating and strengthening the financial activities of enterprises, basically resolving bad debts and redundant workforce.
Intensifying programmes of employment and poverty alleviation: Focusing on hunger elimination and poverty alleviation in disadvantaged and under-developed regions, implementing socio-economic programmes of provinces in northern mountainous region, the Central Highlands and the Mekong delta; finding jobs for redundant workforce from the reform of State-owned enterprises and urbanization; promoting the role of the job Fund creating new jobs; expanding markets for labour export, re-organizing and improving the quality and competitiveness of the labour export.
Improving education, training, science and technology: Implementing the mechanism of science and new technology recently approved by the government combining technology with education and training, institutes and research centers with production, improving the quality and competitiveness of products, protecting the environment against pollution in cities, industrial zones and craft villages./.
Agricultural Progression
“Vietnam’s agriculture is to make the third leap on its development path,” former Deputy Prime Minister Nguyen Cong Tan has said this while addressing a conference recently held in Ha Noi to expedite the implementation of Decision 80/2002/QD-TTg regarding policies for encouraging contractual sale of agricultural products.
Coming from a farmer family, Tan has worked for over 40 years in the agricultural sector. He used to be Minister of Agriculture and Rural Development, and has just stopped being a Deputy Prime Minister in charge of this sector. Addressing the conference, the “Farmer Deputy Prime Minister” made profound assessments on the development of Vietnam’s agriculture.
Three leaps
According to Tan, Vietnam made the first leap in agricultural development in 1986 when the country started its economic management renovation process. By that time, Vietnam made a shift from the self-supporting agriculture to the commodity-oriented one. As a result, the country has stopped importing food and many other agricultural products and become one of the leading rice exporters in the world.
Making the second leap in agricultural development, Vietnam has got rid of the extensive farming mode with low productivity, low quality, low effectiveness and low competitiveness. Today, Vietnam is known in the world as a country of many high-yield tropical agricultural products and highest rice production in Southeast Asia. Grown-in-Vietnam coffee, pepper and some other crops are best-selling products in many foreign countries. Famous agricultural products of Vietnam include Buon Ma Thuot coffee, Phuc Trach and Nam Roi grapefruits, Phu Quoc pepper, etc.
Vietnam is to make the third leap in agricultural development by shifting from spontaneous production to the contractual one in compliance with the basic objective of Decision 80/2002/QD-TTg of the Prime Minister. Tan indicates that traditionally, Vietnamese farmers often made agricultural products before searching for sale markets. The cultivation of coffee in recent years has been an example. By that way, Vietnam’s agriculture has suffered many risks. But the situation has changed. Based on market demands, enterprises can come to agreements with their partners first, then advance capital, provide breeds and other materials, and sign sale contracts with farmers. Such a process is considered popular in those countries where the commodity-oriented economy develops. Will it be successfully applied in Vietnam? This depends on the coordination between the Government and relevant organizations.
Enterprises must pioneer
Presently, spontaneous production is the biggest weakness of the market economy in Vietnam. Enterprises must be pioneers in surmounting this weakness. Tan indicates that farmers represent the smallest economic cells that can easily suffer losses. In fact, profit getting enterprises are those having good relations with farmers. The Lam Son Sugar Company (in Thanh Hoa Province) has signed contracts with 100 percent of sugarcane growing cooperatives and households in planned areas and 90 percent of sugarcane planters in unplanned areas. Under contracts, the company provides breeds, fertilizer and insecticide, transfers techniques, conducts the transportation of sugarcanes, and purchases all of farmers’ products at the agreed prices. Every year, the company gives some of its profits to farmers as bonus. Such a working manner is actively responded by farmers and has enabled the company to maintain sustainable growth in recent years.
The Song Hau (Hau River) Farm (in Can Tho) has for many years signed contracts with farmers working in and out of the farm to produce and sell agricultural products. The farm purchases agricultural products from farmers at the insured prices under contracts. Consequently, stable material areas have been formed to cater for processing and export, making farmers feel secured to intensify production and earn increasing incomes. The relationship between farmers and the farm thus is becoming closer.
According to Tan, it is necessary to boost the growth of cooperatives in rural areas that perform as sale-agents helping enterprises fulfill their contracts with farmers. Apart from cooperatives, alignments in other forms acceptable to farmers should also be encouraged.
Local authorities need to be active
Local authorities need to actively help farmers expand material areas in accordance with the master plan of the agricultural sector, for example, the one-million-hectare export rice area in Cuu Long (Mekong) Delta, the 235,000-hectare sugarcane area catering for 44 sugar plants, and the 50-hectare pineapple area, etc.
Agriculture and Rural Development Minister Le Huy Ngo, apprehending the conference’s resolution, which is also the Government’s guideline, has instructed provinces and corporations to implement Decision 80/2002/QD-TTg of the Prime Minister. “It is the responsibility of the Ministry of Agriculture and Rural Development and relevant authorities to make farmers understand permanent interests of contractual sale of products, and build a synchronous system of regulations applicable to joint-businesses of farmers and enterprises, so that the commodity-oriented economy in rural areas can be promoted,” Mr. Ngo said.
