Drastic restructuring - breakthroughs help achieve a higher growth

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Mr. Hoang Xuan Hoa, the Director of the General Economic Department, the Central Economic Committee.

These breakthroughs will help achieve a higher growth in 2017 as well as in the coming time. Mr. Hoang Xuan Hoa, the Director of the General Economic Department, the Central Economic Committee exchanged with a reporter of the Customs Newspaper on the sidelines of the seminar "Vietnam Macroeconomics: Driving for Reform".

There are many forecasts that the economic growth target of 6.7% is difficult to achieve. So, what is the challenge in economic development from now to the end of the year, Sir?

We all see that the growth rate of GDP in the first quarter of 2017 was the lowest level in the last 10 years, so we should focus on but what measures should be taken to improve the growth.

Regarding the forecast of the growth in 2017, we are now in the context of a major change in the reform of growth patterns, economic restructuring, the way we produce, restructure , as well as reforms in the economic structure, including the reform of the banking and finance system, credit institutions, public investment restructuring and State-owned enterprises.

The results of restructuring process have a certain delay, so we must accept growth at a lower level than the target, but in the next 5 years, the positive results will be more clear. Many experts said that this year's growth rate was only around 6-6.2%, but I think that we have to accept to achieve the expectation in the next phase.

Now, it is important to accelerate the process of economic restructuring and reform the growth model based on innovation, particularly in the public and private sectors, focus on the development of enterprises in hi-tech agriculture. They are the breakthroughs to achieve higher growth targets this year as well as in the coming time.

What do you think about inflation target of less than 4% in 2017?

I think we can achieve the inflation target of less than 4% based on two factors. Firstly, although economic growth in the first quarter of 2017 was only 5.1%, the Government is now beginning to accelerate the implementation of Resolution 19/2017 / NQ-CP on improving the business environment and Resolution 35/2016 / NQ-CP on business development support, putting a great impact on macroeconomic stability. Once macroeconomic stability is maintained, it will help manage inflation.

An increase in the price of electricity as well as gasoline is not something unexpected or shock. As electricity prices increase based on a roadmap and we know it in advance. Gasoline prices are adjusted according to the market mechanism, depending on the world market. The world supply of petroleum in the coming time is not short so it does not create a breakthrough in the price of petrol and oil, contributing to the stabilisation of domestic petrol prices. We can control the price of petroleum in the country. Thus, it can be said that the two factors of electricity price and gasoline price will have a slight impact on inflation, do not create too big changes on inflation and the economy.

Business development is the driving force for growth, but in fact, individual business households, part of the private sector, are not willing to switch to a business model, which can affect the target of 1 million businesses by 2020. What do you think about this issue?

Individual business households are considered as a small part of the private sector but their contribution to GDP growth of the private sector is around 33%. Currently, the number of household businesses tends to increase, so we need to encourage them under two aspects.

First of all, there must be a policy mechanism to create a truly attractive business environment that can not be imposed by the administrative orders for the individual household sector. Only when the business environment is really attractive, business households find they have many benefits if they move to a business model and their law enforcement will be better.

The 5^th Session of the Central Committee of the Communist Party (XII) will issue a special resolution on the private economy, including the individual economy. This resolution will create new impetus for the private sector in general and the private sector in particular so that they can take advantage of their potentiality to contribute to the economy.

At present, business households find that the business environment still has many barriers in terms of mechanism and policies which are not attractive and favourable. When they move to a company model, they will have to ensure benefits for employees such as social insurance, health insurance, inspection, supervision. They are barriers that they have no incentives to become a business. I think that if we can solve the above problems, the target of 1 million private enterprises by 2020 is entirely feasible.

In order to increase the efficiency of economic restructuring and transformation of the growth model, many experts said that there was a need to change the way of operation to motivate the economy. What do you think about this issue?

In my opinion, it is clear that nowadays, economic administration, policies and guidelines have been fulfilled by the Party and the Government. However, there are only a few factors causing difficulties. In the coming time, it is necessary to drastically promote the implementation of Resolution 19-2017 to accelerate administrative reforms for effective implementation from the central to local level, thus creating the foundation, accelerating the process of restructuring and changing the growth model. Resolution 19-2017 contains more than 250 groups of the solution, which shows that the Government has more and more concretized the review of these indicators, thereby having accurate results.

In addition, the current 4.0 revolutionary trend has created a new wave of industry, which we must approach and integrate into all areas to create a model of growth based on change, creating more value-added to participate in the global value chain in many areas. This is the key, creating the most powerful stimulus for growth in Vietnam.

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Thank you!