The success of the August 1945 Revolution and the establishment of the Democratic Republic of Vietnam, the first people’s democratic State in Southeast Asia, symbolised Vietnam’s strength, spirit, will and wisdom. Vietnam has overcome numerous difficulties to obtain achievements in different fields and affirmed its position in the Doi Moi (Renewal) process. At the recent first meeting of the 12^th National Assembly, the Government worked out strong measures to further develop the national economy for international integration.  

Positive changes made in national development

In recent years, national economic growth has been maintained at a high level. In the first half of this year, the economic growth rate reached a five-year record high of 7.87 percent. Industrial production increased by 16.9 percent; agro-forestry and aquaculture, 2.67 percent, and services, 8.41 percent.

Export activities have contributed to 50 percent of GDP and developed in both turnover and market. In the first half of this year, export turnover hit more than US$22.4 billion, with six key products surpassing the US$1 billion mark each.

From a rice importer, Vietnam has met domestic consumption and become the 2^nd biggest rice exporter in the region. Coffee, pepper and cashew nut exports have also achieved a rather high growth, thereby affirming Vietnam’s position in the world export market.

Financial and budget activities have been stable. Budget collection and spending has been maintained at a rather high growth rate. The establishment of the securities market has helped mobilise a great deal of capital sources for the national economy, in addition to foreign direct investment (FDI) and official development assistance (ODA) capital. Total social investment capital has been maintained at a high level, reaching VND195,000 billion annually, or 39.5 percent of GDP.

Up to now, nearly 300,000 businesses have been operating in all areas, making considerable contributions to national economic development. Positive changes in the investment environment have provided an important background for business development.

But challenges lie ahead

Despite achievements in socio-economic development and poverty reduction, the fight against poverty and backwardness still needs revolutionary movements in the August Revolution spirit. Although Vietnam exports rice, people in some mountainous and inaccessible areas still run short of food. Although no people lack food and clothing, the number of poor households according to new poverty criteria has not been reduced to under 16 percent as expected. This year’s economic growth rate is set for 8.5 percent, but after six months, it only reached 7.9 percent against the same period last year. Compared with the same period last year, crude oil output reduced by 1 million tonnes, Winter-Spring food output by 300-350,000 tonnes and rice area by 4,000ha. Meanwhile, bird flu has recurred in 18 provinces and cities. Import surplus reached 21.3 percent of export turnover. While investment increased, the realisation projects and disbursement was lower than in the same period last year. The prices of oil, petrol, agricultural materials and food have increased rapidly, directly affecting the people’s lives. This shows that after joining the WTO, Vietnam must positively and consistently strive to turn challenges into opportunities.

Determination of the new Government

Prime Minister Nguyen Tan Dung, representing the 12^th Government said in his inauguration speech that the Government understood its key assignment to snatch opportunities and make full use of advantages to overcome difficulties and challenges and promote positive outcomes and effectively overcome weaknesses and inconsistencies. To fulfill the heavy responsibility assigned by the Party, the State and people, the Government and State administrative system must overcome their own faults to develop an administration really of the people, by the people and for the people. The administration must be transparent, strong, disciplined, and highly efficient and effective.

A current important task of the Government is to control price hikes to help stabilise the macro economy and stabilise people’s lives. Vice chairman of the National Assembly’s Economic Commission, Mr. Le Quoc Dung said that the most important thing now was to ensure the selling of farm produce at reasonable prices. Farmers are suffering heavy losses due to avian flu.

In the remaining months of the year, the Government will further implement solutions for realizing three major tasks. Firstly, to obtain a rapid and sustainable economic growth combining with settling social issues and poverty reduction. Secondly, to accelerate administrative reform and create obvious changes in the reform of administrative procedures. Thirdly, to speed up the struggle against corruption and wastefulness.

As Vietnam is integrating into the world economy, it is very important to ensure financial and monetary balance. Concerning this issue, Finance Minister Vu Van Ninh said, the tax reduction roadmap affected State revenues. However, if Vietnamese businesses operate effectively and the country attracts more foreign businesses, the domestic source of revenue will increase and production and export will be accelerated. Investment funding will compensate for the losses caused by reduction of import-export taxes. The Ministry is making efforts to reduce the loss of revenue.

All localities in the country are implementing the Government’s programme of action to realise major policies on rapid and sustainable economic development now that Vietnam is a WTO member. Each province and city will adopt suitable policies to keep pace with the growing trend of world integration.