Experts urge policies to keep economic afloat

Hanoi (VNA) - Vietnam should act immediately to minimise the impact of
the ongoing world economic crisis and to stay afloat in 2009, a seminar on
Vietnam 's economy heard on Nov. 24.

Most economic think tanks at the seminar agreed that Vietnam had to
accurately evaluate the current status of the country's economy and its
trends in the current global context to implement appropriate measures.

"The ability to forecast the trends of Vietnam 's economy is still very
weak, both in macro and micro terms, and also the ability to cope with the
new situation," said Tran Dinh Thien, deputy director of the Vietnam
Institute of Economics.

Thien said the Government considered these weaknesses as one of the main
causes of high inflation and economic turmoil in Vietnam over the past
few months.

"It's now hard to predict trends as the world's economy plummets, but most
of the predictions show that turmoil will last at least until next year,"
Thien added.

Thien said it was necessary to carry out more profound studies, coupled with
open dialogue between the Government, economic experts and businesses in
order to produce more appropriate measures.

Meanwhile, senior economic expert Le Dang Doanh said that before the world
economic turmoil began, Vietnam already had its own economic crisis -
the inflation problem.

"We said that inflation in Vietnam is going down, but we did not mention
the increasing rate of unemployment, bankruptcy - results of soaring
inflation and the ongoing economic recession."

Doanh said Vietnam 's economy is facing severe hardship as its keys
export items such as oil and rice see greater and greater losses.

He said that most producers and exporters are reporting that prices of
exports such rubber, coffee, pepper and seafood are all falling.

Textile and apparel exports, the country's second biggest earner just after
crude oil, were likely to miss growth targets the Government set for 2008.

"While oil has dropped from over 140 USD to just over 40 USD now, our rice
exports are facing more severe competition from Thailand and China ."

Doanh said that while the tourism industry is receiving less foreign
visitors, investment from the private sector is decreasing even more
sharply.

"All of these negative indicators need profound attention and evaluation in
order to develop accurate reactionary measures as soon as possible," he
added.

Meanwhile, general secretary of the Vietnam Banking Association Duong Thu
Huong expressed her doubts about economic targets for 2009 set by the
Government.

"We set a number of optimistic targets for 2009, but I'm afraid that even
the growth rate of 6.5 percent will likely not be reached," Huong said.

She stressed that the banking sector, which is already having difficulties
because of the ongoing turmoil, will face an even harder time next year as
local businesses are about to see shrinking markets, both domestically and
internationally.

"Most of the world is preparing money to rescue their economies, what about
Vietnam ?" she asked.

Vietnam , like much of the world, is trying to stimulate its economy amid
the global downturn, but its is having problems because it must also keep
rampant inflation from flaring up again.

With small and relatively insulated banking sector, the country was not
directly exposed to the subprime crisis that sparked the Wall Street
meltdown, subsequent world-wide credit crunch and turmoil global financial
markets.

But the wider economic repercussions of what has been called the worst
global economic crisis since the General Depression are already being felt
in this developing economy, especially in the crucial export sector.

Amid shrinking overseas demand, Vietnam 's monthly exports have steadily
fallen from 6.5 billion USD in July to 6 billion USD in August, to 5.3
billion USD in September and finally to 5.1 billion USD in October.

Inflation has been in the double digits all year and stood at 26.7 percent
year-on-year in October, a slight fall after a drop in global energy and
commodity prices.

Consumer price increases started to level off in September and fell
month-on-month by 0.2 percent in October.

The Government is looking to bring annual inflation down to 23-24 percent in
2008, and to less than 15 percent in 2009.

It also cut the economic growth target from 8.5 percent last year to around
6.5 percent for this year and the next - although some economists predict
gross domestic product growth will be below 6 percent next year.

The Government also predict that export growth will slow to around 13
percent in 2009 from a projected 33 percent this year.-Enditem