Top 10 economic events in Vietnam 2006
Following are the ten most prominent economic events in Vietnam in 2006 selected by Saigon Times Group’s journalists, economists and business people.
1. Tenth Party Congress
The tenth Congress of Vietnam’s Communist Party (April 18-24) reviewed the achievements and shortcomings of 20 years of doi moi (renovation) and determined to continue reform and international integration. A new, younger leadership lineup was set up after the Congress.
2. Vietnam became WTO member
Vietnam was admitted as the 150th member of the World Trade Organization on November 7. In mid-December, the U.S. approved the Permanent Normal Trade Relations (PNTR) with Vietnam, marking the completion of the country’s WTO accession process.
3. Successful hosting of APEC 14
Vietnam successfully organized the 14th Asia Pacific Economic Leaders’ Meeting in November, with the participation of leaders and officials from 21 member economies of the Asia Pacific Economic Cooperation (APEC) forum.
4. Record FDI inflow
Foreign direct investment (FDI) approvals in 2006 surpassed US$10 billion, the highest since Vietnam began to receive this source of capital.
5. Good export revenue
Vietnam’s 2006 exports grew 22.1% from 2005 to a record high of US$39.6 billion. This led to gross domestic product (GDP) growth remaining robust, at 8.2%, nearly the same as in 2005. Consumer prices increased 6.6%, down from 8.4% in 2005.
6. Stock market expanded fast but unsustainably
The stock market recorded phenomenally exploding growth, with a string of new listings on the Hanoi and HCMC exchanges, and market capitalization skyrocketing from US$460 million (of 32 companies) at the beginning of the year to US$8.7 billion (of 92 companies) by December 26. However, share prices were greatly volatile. The VN-Index jumped from 304 points early in the year to more than 800 on December 20. The volatility was mainly driven by investor sentiment, not by the performance of businesses.
7. New enterprise and investment laws
The new Enterprise Law and Investment Law, which were approved by the National Assembly in December 2005 and took effect from July 1, 2006, mark a great step forward in the reform process. The laws unleash the potential of the private sector and created a level playing field between domestic and foreign businesses and between the private and State sectors.
8. Big corruption cases uncovered
Many big corruption cases, with the PMU 18 and land sharing in Do Son as the typical cases, were investigated and prosecuted. The promulgation of the Anti-Corruption Law and the establishment of an anti-corruption agency show the Government’s resolve to fight corruption.
9. Heavy losses from natural disasters and epidemics
Natural disasters, such as typhoons Chanchu, Durian and Xangsane, and epidemics in livestock and paddy caused heavy losses estimated at nearly VND20 trillion (US$1.25 billion). It will take many years to recover.
10. Massive strikes
More than 150 strikes occurred at foreign-invested enterprises (FIEs) at the beginning of the year, with 160,000 workers going slow. The main reasons are low pay and poor protection of workers’ interests. The strikes subsided after the Government raised the minimum salary at FIEs.
The Saigon Times Daily - December 28, 2006.
|