At a Q&A session in Hanoi on June 10, Minister Ninh acknowledged that the State has listed a group of commodities of which prices are made public for management. In fact, he said, the prices of several commodities were out of control.

He said relevant ministries dispatched teams to examine the market and found violations in price registration and listing, and fined law-breakers. However, the fines are not heavy enough to discourage opportunists from breaking the law.

The MoF proposed that the government amend a decree to allow law enforcement agencies to impose heavier in violators. The Minister also assured the legislature that his ministry will complete legal documents to better control the market.

Mr Ninh said drug prices are managed by several ministries, including the Ministry of Health (MoH), and that his ministry is assigned to control the prices of locally-manufactured pharmaceuticals and imported drugs. Recent inspections showed that there were frauds in the import of medicines.

The ministry is working with other agencies to tighten controls on imported medicines, said Mr Ninh, adding that it is necessary to overhaul the distribution network to help the State control prices more easily.

MoH Minister Nguyen Quoc Trieu took the floor, saying his ministry has paid close attention to drug prices, which increased only by 3.1 percent compared to an increase of 8.6 percent among 10 essential commodities in the first four months of this year. He said the MoF, the MoH, and the Ministry of Industry and Trade (MoIT) have issued an inter-ministerial circular on drug price management, and the efforts are paying off.

Then Finance Minister Ninh explained recent adjustments of petrol prices, saying his ministry has followed with keen interest fluctuations in the global oil market in order to make appropriate adjustments. He pointed to the fact that the ministry did not allow businesses to hike retail petrol prices in March and April although global oil prices kept increasing by 5.79 percent and 4.1 percent respectively. To support businesses, the State cut oil import tax and used the price stabilisation fund for oil. When global oil prices subsided, the State kept domestic retail petrol prices unchanged and then lowered them to stabilise the market.

“We keep a lid on the market, protect consumer interest, and harmonise the interests of the State, businesses and consumers,” Mr Ninh said. 

The Finance Minister said the government does not respond to public pressure with regard to petrol prices, that it reduces petrol prices when it is necessary to stabilise market prices.

He also echoed a deputy from HCM City, who said the root cause lies in an improper distribution mechanism.

The government wants to delegate more power to businesses in setting prices, but this should be done according to the law and under State regulation, said Mr Ninh.

Effective use of foreign loans

Mr Ninh affirmed that Vietnam has used foreign loans effectively. He quoted statistics, indicating that Vietnam’s foreign debts equal 58.8 percent of its GDP, of which 86.5 percent is in the form of official development assistance and long-term loans from the World Bank, the International Monetary Fund, the Asian Development Bank and Japan.  The loans are used for big projects to build key seaports, bridges, roads and irrigation works.

There are no bad or overdue debts that Vietnam has not been able to pay back, said Mr Ninh, adding that its foreign debts are at a safe level.

He also explained the government’s decision to increase budget spending which now exceeds 5 percent of GDP – a level that causes considerable worry amongst deputies.

Mr Ninh said Vietnam is a developing nation and it needs a lot of investment capital. So the government welcomes foreign loans offered at reasonable rates to invest in areas that benefit the nation, and the government always finds a way to pay them back.  

However, the minister agreed with deputies that budget spending should be reduced gradually in the coming years.

Farmers earn 30 percent profit

Mr Ninh said his ministry has submitted to the government a project to purchase rice from farmers, helping to stabilise the rice market and ensure that farmers earn a minimum profit of 30 percent.

He said his ministry has provided subsidised loans to farmers to buy materials and equipment for production. It has also established a rice price stabilisation fund to support businesses in purchasing farmer rice for reserves and export. 

Mr Ninh proposed a pilot project on agricultural insurance, targeting rice production, livestock breeding and aquaculture in the initial stage. By taking part in the project, poor farmers are expected to receive State subsidies of between 80-90 percent of insurance premiums, farmers 60 percent and organisations 50 percent.