Economists suggest strategies for 2017 challenges

Dr. Le Xuan Nghia, a leading financial expert, raised several global issues likely to impact Vietnam’s economy. Among them is the Trump Administration’s policy that promotes attraction of investment to the US, which would likely affect interest rates and business strategies worldwide. In addition, starting in July 2017, Vietnam will not be eligible for loans under official development assistance (ODA) conditions, and will have to borrow capital under commercial conditions. Should the government decide to tackle some of these developments by adopting a high import tax policy, the result would probably cause “trade and currency wars”, he cautioned.

Many economists who took part in the discussions said that Vietnam should pursue a knowledge-based economy and increase the number of start-ups, especially in the agricultural sector.

According to Tran Thanh Hai, deputy director of the Import and Export Department under the Ministry of Industry and Trade, in order to take advantage of the many free trade agreements (FTAs) that Vietnam has signed and will sign, domestic firms should study tariff policies of foreign markets to abide by the regulations of origin and take advantage of preferences.

Dr. Le Xuan Nghia noted that China has many big investment projects in Malaysia, Thailand and Pakistan, among others. Vietnam shouldn’t ignore the source of capital from China, as China is increasing investment abroad, he advised. And, in fact, in the first two months of 2017, Vietnam attracted US$721.7 million in foreign registered investment capital, with China ranking second among foreign investors in the country, after Singapore. The government should also speed up the disbursement of capital of medium and long-term public investment projects to develop the economy in 2017, Nghia said.

Tran Hai Ha, general director of the MB Securities Company, said 2017 will offer many investment opportunities, as the government has accelerated the privatization and initial public offering (IPO) of many state-owned enterprises since 2016, diversifying the goods on the securities market.

Nguyen Tu Anh, deputy director of the Monetary Policy Department of the State Bank of Vietnam, said that in 2017 and the following years, enterprises should closely eye macroeconomic and monetary changes inside and outside Vietnam in order to respond accordingly. He noted that the State Bank has committed to fuelling high-tech agriculture with VND100 trillion.

Pham Van Thinh, general director of Deloitte Vietnam, said Vietnamese corporate governance remains poor and companies should improve their administration and prepare long-term development strategies. Dr. Tran Du Lich said that in addition to government action, legislation should be submitted to the National Assembly for approval as soon as possible to facilitate the promotion of start-up businesses.