The government’s plan to cut the GDP growth rate target for 2009 to 5% is being called a positive move. The government will have to restructure its revenue and spending. These are the opinions of economists and National Assembly deputies about this issue.

Mr. Le Quoc Dung

Vice Chairman of the National Assembly Economics Committee Le Quoc Dung:

At the recent National Assembly session in December 2008, many deputies predicted that GDP growth this year would stand at 5% but the National Assembly still approved the rate of 6.7% and budget overspending at 4.3%, why?

At that time the National Assembly was still optimistic and didn’t thoroughly consider the situation and the impacts of the world economy on Vietnam.

This is a lesson because if we had predicted the situation correctly, we would have had more practical figures.

At present, the situation forces us to adjust the targeted growth rate and to cut spending. Besides changing these two norms, the government will have to restructure budget revenue and spending and the fiscal policy.

So this will be the second year that we have to change economic and social targets that were approved by the National Assembly. So what should we do to not repeat this?

The most important thing is that National Assembly deputies are given sufficient data and information and the government should present different situations and plans for the National Assembly to choose from.

Secondly, we need thorough analysis of situations. Thirdly, National Assembly deputies have to have opportunities to speak and to discuss things.

In addition, the National Assembly has to revamp itself towards inviting experts to provide forecasts and information to serve National Assembly deputies before they ratify any policy.

However, the National Assembly should have preventive plans to cope with any change. It is not good if whenever the situation changes, the government asks for the National Assembly’s opinion.

In the recent session, the National Assembly Economics Committee said that the government should not worry so much about targets in quantity, but in quality and effectiveness to have sustainable development. The viewpoint of our committee is the economic slowdown will prolong.

In your opinion, what will the GDP growth rate be this year? If the National Assembly reduces the rate to 5% while the situation continues to change, will Vietnam be able to reach the new target?

5% is still a high number that it is difficult to reach. The growth rate for the first quarter is 3.1% so there are different forecasts. Some say that the growth rate in the second half of the year is often higher than the first half. But in this situation, exports must be high. This year exports are facing a lot of difficulties.

It is necessary to reduce the targeted GDP growth rate but we have to carefully consider the situation, because we can’t measure the impacts of the world economy.

I think we will have to try to reach 3.5%.

Economist Pham Chi Lan:

Mrs. Pham Chi Lan

Vietnam is among vulnerable countries in this crisis so we cannot hold the high expected growth rate set in the National Assembly’s resolution – 6.7%.

Late last year, when inflation was controlled and because of poor forecast, the National Assembly approved a quite high target; but this time, when the situation changed, the government took initiative in adjusting the goal. Instead of trying to pursue the wrong forecast, we amended the target.

In addition, it is necessary to ask the National Assembly to increase overspending. Actually, the government is spending money for the economic stimulus package. Conducting economics can’t wait for National Assembly sessions.

For years, the National Assembly tried to maintain overspending rate to less than 5% but this year, we have to spend a lot of money. Because when enterprises face difficulties, the state has to help them and when they recover, they will contribute more to the state budget. At that time we will consider reducing overspending. Nobody wants to have budget overspending of up to 8%.

The people want the government to strictly control its spending, spend sensibly and effectively. But it should ask, where is the government spending the money? Budget overspending is 8% but are those expenditures creating jobs or assisting enterprises to overcome difficulties?

The State Bank of Vietnam should ask commercial banks to clearly explain how they lend and who they lend to to assure that they lend money to the correct clients. In many localities where I have been, small- and medium-size enterprises are still meeting difficulties.

Le Nhung