Recalculation for economic growth in the current situation

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Economic expert Nguyen DinhCung, former Director of the Central Institute for Economic Management (CIEM)

How do you forecast the effects on our country's economic growth during the current outbreak ?

- Actually, all forecasts are just forecasts. However, up to now, the three words that people has used to evaluate the economy are "instability, uncertainty, insecurity", so many forecasts are in the worse direction. But for Vietnam today, it is clear that we are relatively optimistic when we have a track record and good disease control experience. So, we have the right to expect that outside economic activity has not yet reopened, but domestic economic activity is recovering, especially in the sectors most directly affected by the pandemic, such as aviation, transportation, tourism, hotel and restaurant, retail, etc. However, the forecasts are constantly changing because we have to be sure of every scenario. So, overall, Vietnam's economic growth will certainly be low, even a record, possibly the record of 35 years of innovation.

Under adverse effects, in addition to continuing epidemic prevention, how does the economy need to focus on key solutions to grow in the new situation?

- In the current situation, in the long term, we must have institutional reforms in a real and breakthrough way, not to "follow the rules, to follow the process". Currently, new businesses are free to do, i.e. "What to do" and "How to do" - how to be not completely free, is still bound by business conditions and specialized tests, so if there is a solution to loosen "How to do" then new products, new industries, new business models can appear and develop.

In the short term, with disease, people will limit travel and spending, it will reduce demand, so we must have solutions to maintain demand. Moreover, public investment and public spending must also be strongly enforced. But now, public investment is still stagnant, the reason is because those who implement it are afraid of risks, so they do not want to decide to do it quickly and strongly. Therefore, we must find ways to remove bottlenecks.

Among the bottlenecks, as with the allocation of capital, in my opinion, the National Assembly should not allocate capital to each project, industry or locality anymore, but the National Assembly should only perform the task of monitoring the effective implementation, the capital allocation should be decided by the Government.

Regarding the form of investment of each project, it is still decided by the National Assembly, but it is advisable for the Government to decide, even allowing the relevant ministry leaders to decide. Give more authority to provincial, city leaders and ministers in public investment decisions. At present, many public investment projects are still under the situation of “procedures of stacking procedures, projects of project overlapping”, many projects have to turn around procedures 4-5 times, which costs time and money for implementation.

In particular, the State should create a resolution from a high-level agency to have an institution that protects the political mission of dynamic, creative, daring, and thoughtful people working for the common purpose. When an individual does something, he or she should take the overall results and efficiency as a measure of evaluation, not a process and regulations for evaluation. This decision will create trust and safety for really enthusiastic officials and leaders, concerned about the development of the nation and the locality.This helps to find a new way, the best plan for development. If you follow the current rules and procedures, the leader and implementer will choose the least risky and safest plan to implement, not the best and fastest solution for development.

The context of the epidemic in this new situation also raises requirements for supportive measures, whether the State needs to add more supportive policies or not?

- The current supporting policies are basically adequate, but with the epidemic situation increasing in the country, some support policies may be extended. For example, the policy of extension, postponement, tax exemption or change the policy to suit the reality of people and businesses.

But if there is more policy, there is not much room for the policy, budget resources are limited, so we have to recalculate from the growth scenario to the balance of revenue and expenditure. Obviously, the current growth scenario cannot be high, since then, the situation of budget revenue is not much, so to create more room for economic support, the Government may have to change the target of budget deficit, change the target of budget overspending, change the target of public debt ceiling to mobilize resources at home and abroad. We need to quantify now, not wait until the end of the year.

Government strives to achieve annual economic growth of 4% Despite facing many impacting factors both externally and domestically, the Vietnamese Government is determined to maintain the ...

But it is also important to supplement strong ways of implementation with creative tools and options with new situations. The authorities must have a choice; go into the focus to resolve. For example, the choice between rescuing large businesses and rescuing small businesses,we always want to save all businesses, with the priority being labor retention, ensuring social security. But in relief, there should be options and calculations to save large businesses, because the number of these businesses is not much at a large scale, so if it fails, the return is very difficult. As for small businesses, due to the nature and moderate size, if it stops operating, it can still return to the market quickly.