Vietnam Advised to Tackle Imbalances in Economy: Economist
Vietnam should take measures to tackle prolonged imbalances in its economy, Nguyen Mai, a senior economist said.
The Vietnamese government should focus on tackling deficits in trade, current accounts and state budget and dealing with possible high inflation, which Mai thought are prolonged factors Vietnam could not solve overnight.
Instead the government should take measures to ease at least, Mai proposed, advising Vietnam to raise efficiency of investment through restructuring state-own enterprises, allocating investment more sensibly and boosting FDI.
Vietnam’s incremental capital output ratio (ICOR) at over 8x (over eight units of investment capital necessary to generate the next unit of production) is too high, meaning production is inefficient, Mai noted.
“Stabilizing” does not mean “fixed policies,” but they must be flexible and transparent, Mai explained, adding not only Vietnam but also all other countries could not set fix policy for a long time in the post-crisis global economic uncertainty.
“It is high time government clarified personal responsibilities in policy making and targets setting to increase the efficiency,” Mai advised.
However, Mai is confident that Vietnam could reach its GDP and inflation targets set for 2010. (Stox.vn)
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