Viet Nam delivering on its promise, say WB and ADB
Ha Noi, Dec. 11 (VNA) -- Viet Nam's strong econmic growth is associated with an external debt at a very manageable level, stated the World Bank (WB) and the Asian Development Bank (ADB) said in a report delivered at the annual Consultative Group Meeting of international donors held in Ha Noi on Dec. 10-11.
The report said:
"After a slowdown period during the East Asian crisis, Viet Nam is again growing quite strongly. This improvement is partly due to a series of policy measures that put the economy on an enhanced medium-term growth path. Confidence in the private sector was boosted by the adoption of a detailed reform programme in 2001. New private businesses are currently being established at a rate of 1,600 per month, and in early 2002 a special meeting of the Party Central Committee gave the strongest endorsement of the private sector ever. Investors are reacting positively to the reform announcements and commitments made by Viet Nam. The country is getting better grades from sovereign risk rating agencies and the macroeconomic situation is stable. Despite an unfavourable external environment, in terms of demand and prices, exports can be expected to pick up as a result of trade liberalisation efforts, including the Viet Nam-US bilateral trade agreement.
"This favourable outlook, combined with Viet Nam's remarkable long-tern growth potential, suggests that the effects of the East Asian crisis are over. A period of high GDP growth rates, possibly in the order of seven percent per year, is likely. As in the 1990s, Viet Nam could be entering a phase of prosperity. This upbeat assessment of the macroeconomic prospects should not lead to complacency, however. During the previous phase of rapid growth, a key question was whether Viet Nam would become a market economy. Today, the question is rather what kind of market economy? Also, the previous phase of rapid growth was characterised by a dramatic reduction in poverty. The poor represented 37 percent of the population in 1998, compared to 58 percent five years earlier. The question today is: will this new phase of rapid growth be as pro-poor as the previous one?
"Viet Nam is committed to socially inclusive development. The recently completed Comprehensive Poverty Reduction and Growth Strategy (CPRGS) translates a vision of transition towards a market economy with socialist orientation into concrete public actions. It aims at full openness to the global economy over the coming decade, and the creation of a level playing field between the public and the private sectors. It emphasizes that the transition should be pro-poor, and notes that this will require heavier investment in rural and lagging regions, and a more gradual reform implementation than is often recommended by international advisors. It gives strong emphasis to poverty reduction and social equity, and to a more modern system of governance. The CPRGS is a product of the government of Viet Nam, involving all of the relevant agencies and sectors in its preparation. Such ownership and deternmination are very goods augurs."
After analysing the three important challenges faced by Viet Nam in the coming period - to further progress in economic reform, poverty alleviation, and to improve the quality of its governance, the report stresses "The Viet Nam Development Goals are ambitious, but attainable".
