Vietnam economy faces litany of woes
HANOI - Vietnam
painted a gloomy picture of the
country's economic prospects on
Tuesday and warned its 79 million
people to expect tougher times
Deputy Prime Minister Nguyen Tan
Dung said gross domestic product
growth would continue to slow while
industrial output expansion was at its
lowest level in several years.
The outlook for foreign investment,
export growth and domestic
consumption was also worrying,
Dung said in a speech at the opening
of the country's National Assembly.
Despite the woes Vietnam had
managed to maintain political stability
and achieve a slight reduction in
poverty, he added.
The National Assembly, Vietnam's
legislative organ, meets twice a year.
During the current session delegates
are expected to approve four new
laws including a landmark text aimed
at ending discrimination against the
``Our social and economic situation
in the last several months has
exposed many weaknesses and
growing difficulties,'' said Dung, who
is also governor of the central bank.
``These weaknesses in the social and
economic sphere will require much
effort and time to overcome and they
will have a direct impact on the
implementation of targets for this
Targets relating to the country's
balance of payments, foreign debt
and overdue loans were already in
doubt, he said.
Dung gave no details of those figures,
nor did he say if Vietnam would
lower its 1999 GDP growth target of
5-6 percent. Hanoi said last week
that GDP grew four percent in the
first quarter of 1999 compared with
the same period last year.
Vietnam estimated GDP growth in
the last calendar year at 5.8 percent,
from 8.2 percent in 1997.
The Asian Development Bank has
predicted Vietnam would grow 3.7
percent this year, while the
International Monetary Fund has said
the figure could be below three
However, those estimates of positive
growth have failed to hide Vietnam's
dimming allure for foreign investors
and poor export performance, both
of which have put a strain on the
country's hard currency reserves.
Tran Xuan Gia, minister of planning
and investment, insisted Vietnam was
trying to meet the demands of foreign
businessmen frustrated with
bureaucracy and high costs.
He said Hanoi was creating a stable
environment for foreign companies to
Underscoring Vietnam's fading
business lustre, Dung said inflows of
foreign investment reached $250
million in the first four months of the
year, well down on the previous
He gave no clear comparison, but
said the figure showed a marked
decline. Dung also said foreign
investment pledges in the first four
months were $358 million, from
$1.07 billion in the same period last
Dung bemoaned problems such as
rising unemployment, drug abuse,
prostitution and smuggling.
He also repeated the familiar theme
that Hanoi would focus on
agricultural growth -- 80 percent of
the population live in rural areas --
and tap Vietnam's internal financial
Reuters - May 4, 1999.