Vietnam’s Long Term Prospects Remain Strong: Mid-year CG Meeting

Donors expressed their continued support to Vietnam amidst global and domestic macroeconomic turbulence at the one-day mid-year informal Consultative Group (CG) Meeting for Vietnam held yesterday in the northern province of Lao Cai.
    Delegates noted that while Vietnam faces various challenges, such as a larger trade deficit and higher inflation, there is reason to remain upbeat about the long term prospects of the country. The key challenge ahead was to ensure steadfast implementation of the measures announced by the Government to stabilize the economy.
    Ben Bingham, the IMF Senior Resident Representative reminded delegates of the need for the Government to respond to signs of weakening economic indicators, which are beginning to weigh in on investors’ sentiments. He also urged the government to ensure transparency and timely data provision on key economic and financial variables, a sentiment echoed by several other donors at the meeting.
    ADB Country Director to Vietnam Ayumi Konishi fully supported the Prime Minister’s eight-point policy action to manage the current economic difficulties. “We strongly believe that it is time for the government to move quickly, clearly and decisively in implementing the stated policy actions, and present a clear direction to the investors and the general public of Vietnam as a whole.”
    The United Nations Resident Coordinator John Hendra stressed the importance of not leaving the poor behind in times of difficulties. “We strongly endorse the government’s decision to prioritize fighting inflation, so that those Vietnamese who have left poverty do not fall back into it.” he said. “Rising food prices are a huge burden for poor households. Hence, providing additional support to the poor is especially important in this period of high inflation.”
    Daisuke Matsunaga, Deputy Chief of Mission from the Embassy of Japan, echoed other speakers in congratulating the government for sending the right signal to the market on giving priority to stability. “We agree with the government’s point of reining in public spending. However, it is necessary to be prudent and ensure continued social investments so as to maintain safety nets for the poor.”
    Regarding the anti-corruption, Swedish Ambassador Rolf Bergman emphasised that the Government of Vietnam should be commended for placing its anti-corruption efforts high on the political agenda and urged early implementation. Yet he also called for greater clarity on the further development process of the legal framework, in particular the Civil Service Law.
    “The role of the mass media, including journalists, must be given a most important role to play. Unless the media is given this strong role in the struggle against corruption, the struggle will never end successfully,” he said.
    During discussion on the effectiveness of development aid to the northern mountain area, Lynne Racine, Development Counselor of the Embassy of Canada noted that “Perhaps the most important factor in making aid to the northern mountains more effective, is to include ethnic minorities in decisions affecting the development of their communities.”
    In his closing remarks, the Vice-President of East Asia and the Pacific of the World Bank James Adams, co-chairing the mid-year CG meeting, expressed appreciation for the productive discussion between the government and the donor community. “The discussion reflects the overall positive attitude toward the long term prospects of Vietnam, despite the need for firm actions to tackle short term challenges.”
    Minister of Planning and Investment Vo Hong Phuc reviewed the points raised during discussions at the mid year CG meeting, highly appreciating the comments provided by the donor community. He stressed that although Vietnam is facing some immediate challenges, the country will be able to maintain a high and sustainable growth rate, serving as an attractive investment destination for foreign investors in the future.

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