PM promises house more rate cuts, environment to be protected

Published: 13/11/2008 05:00

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Update from: http://www.thanhniennews.com/politics/?catid=1&newsid=43710

A polluted stretch of Saigon River in District 2, Ho Chi Minh City. PM Dung promised legislators Thursday that the environment would no longer be sacrificed for short-term economic benefit

The government will continue to lower interest rates, keep the foreign exchange regime flexible, and boost environmental protection next year, PM Nguyen Tan Dung has said.

Speaking at the National Assembly’s televised question-and-answer session Thursday, Dung said the government’s priority is to contain inflation and sustain economic growth next year.

“In 2009 we have to continue to contain inflation, prevent a recession and maintain growth, while fiscal policies must more efficiently support monetary policies,” he said.

The government would further lower interest rates next year to free up credit and stimulate the economy, he said.

It would also make the exchange rate mechanism more flexible, he said, to react more efficiently to turbulence in capital flows, support exports, contain the trade deficit, maintain the stability of the balance of payments, and maintain adequate foreign currency reserves.

The NA has approved the government’s proposal to scale down the economic growth target to around 6.5 percent for this year.

“Interest rates remain high and lending has slowed down, so businesses and producers face difficulties,” Dung said, admitting inflation and the global downturn have clearly had a negative impact on the economy in late 2008.

The State Bank of Vietnam this month cut the benchmark rate to 12 percent, the second cut in two weeks, to boost the struggling economy.

Dung also pledged to step up “monitoring of banks and financial services and real estate trading.”

Environment

The government would not let the environment suffer for short-term benefits, Dung promised.

It recently rejected a steel project involving an investment of US$5 billion due to its environmental impacts, he elaborated, adding provinces and cities too have adopted this principle.

Speaking about Taiwanese MSG maker Vedan Vietnam, which in early September was charged with dumping untreated wastewater into the Thi Vai River in Dong Nai Province, Dung said he would instruct concerned agencies to ensure the firm stops the dumping but could allow it to remain open.

PCI case

Deputy Nguyen Minh Thuyet from the northern province of Lang Son asked Dung what action the government has taken in the graft case involving Japanese Pacific Consultants International (PCI) and a Vietnamese official.

Earlier this week the Japanese media reported that some former PCI executives admitted at a Tokyo court to paying bribes to a Vietnamese official for securing deals in Ho Chi Minh City’s East-West Highway project.

Dung said the documents in the case do not stand up to legal scrutiny, referring to documents received from the Japanese a few months ago.

“We will deal with the case in accordance with Vietnamese laws.”

A joint committee has been set up by Japan and Vietnam to probe the matter further, Dung told the house.

Other issues

The PM said “a temporary halt” to signing rice export contracts for delivery in April, May and June is “necessary” to ensure sufficient supply for domestic use and prevent price hikes, thus assisting in the fight against inflation.

Vietnam’s rice exports totaled over four million tons this year. The country is expected to export some 4.7 million tons worth US$2.8 billion during the whole year, up 4.4 percent over 2007.

Minister of Agriculture and Rural Development Cao Duc Phat, and Minister of Industry and Trade Vu Huy Hoang earlier took the blame for making faulty forecasts about rice harvests and offering poor advice to the government, which caused a temporary halt in signing fresh export contracts in April and heavy losses for farmers.

Speaking about measures to reduce poverty, Dung said the country has to achieve stable development based on high economic growth, social equity through job generation and poverty reduction, and environmental protection.

It should also establish an unemployment insurance fund early next year to provide a safety net to poor people, he said.

In 2009 the government would implement poverty alleviation programs in more than 60 of the poorest districts in the country, he said.

Source: TN, Agencies

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