Vietnam says could issue foreign bonds as debt lower
HANOI - Vietnam could issue foreign bonds in 2005 as its foreign debt has been cut significantly over the past decade to a manageable level, Finance Minister Nguyen Sinh Hung said on Wednesday.
"We have turned the foreign debt relation into a healthy one," Hung told Reuters. "After restructuring debts and adding fresh loans until now, Vietnam's foreign debt from the government and from enterprises is 32 percent (of gross domestic product)." Hung said foreign debt had been cut from as high as 87 percent of GDP in the early 1990s, and could now edge back up to the 2003 level of 34 percent. "It is possible for the government to issue bonds overseas," Hung said on the sidelines of a financial industry meeting, but did not provide any further details.
Last year, the government did not go ahead with plans to issue bonds overseas, saying it could raise funds at home. Hung estimated there was 60 trillion dong ($3.8 billion) of private savings that could be invested in bonds. Vietnam plans to raise between 60 trillion and 70 trillion dong during the eight years ending in 2010 to fund its economic expansion.
Vietnam's GDP grew 7.7 percent in 2004 to $45.3 billion. Based on that and the finance minister's comments, foreign debt was around $14.5 billion at the end of last year. The Southeast Asian country has set a growth target of 8.5 percent for 2005. In November, the World Bank estimated Vietnam's foreign debt at $15.9 billion for 2004, and said it would grow to $16.6 billion by the end of this year, or 35.7 percent of GDP.
Hung said the government's domestic debt ratio was not a burden as it was around 10 percent of GDP, compared with the 150 percent borne by the Chinese government. He said Vietnam should only borrow this year where the need for funds was clearly identified. "We hope not to have careless borrowing so as to avoid debt restructuring, unless there are natural disasters like floods," Hung said.
Reuters - January 12, 2005
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