Vietnam must accept “low” economic growth while it restructures its economy and should aim for annual expansion of at least 5 percent, according to President Truong Tan Sang.
Growth less than 5 percent would be “dangerous,” and spur high unemployment, Sang said in a Jan. 21 interview with Vietnam News Agency, the official state media. The country should try to gradually boost growth to 7 percent to 8 percent and stabilize the macro-economy, he said, without specifying a time frame.
Vietnam’s economy expanded at the slowest pace in 13 years in 2012 as a slump in bank lending damped domestic demand, adding pressure on the government to revamp the financial system and attract more foreign investment. Gross domestic product rose 5.03 percent last year, down from 5.89 percent in 2011.
The World Bank is concerned about the country’s monetary policy loosening as it faces the risk of double-digit inflation in 2013, Deepak Mishra, the lender’s lead economist for Vietnam, said today at a business meeting in Ho Chi Minh City.
VN Index, the benchmark measure of the Ho Chi Minh City Stock Exchange, fell for a fourth day, dropping 1.1 percent to the lowest close since Jan. 7.
Weaknesses in the economy include the “low” quality of the country’s workforce, Sang said. “We ourselves, who manage and lead the country, have not created a favorable business environment and have not trained a high-quality workforce for companies,” he said in the interview.
Citizens’ trust in the Communist Party and the regime is being challenged and weakened by corruption, wastefulness and moral degradation among some officials and party members, he said. Officials must fix shortcomings to affirm the Communist Party’s role in the country’s future, Sang said.
The country’s top leaders, including the prime minister and president, will face confidence polls by legislators this year that could trigger their dismissal, according to a resolution that becomes effective next month.
The confidence and non-confidence vote procedure approved by the National Assembly is evidence of democratization, Sang said in the VNA interview. “It’s crucial to truly implement it, and have the monitoring mechanism to prevent campaigning or buying of votes,” he said.
Vietnam’s Communist Party chief, Nguyen Phu Trong, apologized to the nation Oct. 15 for mistakes, including mismanaging state companies and not preventing or remediating corruption among party members.