Vietnamese economy recovering fast, but concerns remain

Local and international experts at a seminar in Ho Chi Minh City on Friday agreed that the Vietnamese economy has recovered rapidly from the global crisis, but added several hindrances still remained to maintaining the momentum.

The seminar, which was held at Sheraton Saigon Hotel by the Indian Business Chamber in Vietnam, had guest speakers from the World Bank in Vietnam, Baker & McKenzie, Nestle, Vietnam’s Ministry of Planning and Investment, and other organizations.
Addressing the seminar titled “Vietnam economy and future outlook: 2010-2011”, Indian Consul General Abhay Thakur said, “At the political level, relations between India and Vietnam are like the clear blue sky, not clouded by any problems.
“At the economic level, our bilateral trade is growing fast, and on course to reach US$3 billion in 2010. However, notwithstanding the above, untapped potential in the India-Vietnam relationship is huge.”
Abhay Thakur said today the major trade and investment partners of Vietnam are the US, China, Taiwan, EU, Japan and Korea, not India. India, he said, is the 10th largest trading partner of Vietnam, and the 29th largest investor in the country. This is not good enough and much more needs to be done, he said.
Victoria KwaKwa, country director of the World Bank in Vietnam, said, “Vietnam’s economy has recovered quite rapidly from the global crisis and real GDP is expected to exceed 6.5% in 2010.”
However, inflation remains high, the exchange rate remains under pressure and public debt has crossed 50% of GDP, she noted.
She suggested adjusting growth strategies and giving priority to raising productivity, improving governance and avoiding crises.
She also suggested that private sector be further developed.
Tran Luu Quoc Vuong from Vietnam’s Ministry of Planning and Investment’s National Center for Socio-economic Information and Forecasting agreed with KwaKwa, adding that the recovering economy still faced the risks of high unemployment rate, budget and trade deficits as well as unstable exchange rates.
Seck Yee Chung, partner with law firm Baker & McKenzie, said most sectors were growing but compliance, lengthy licensing and registration procedures still posed big challenges.