(VEN) – What must be done to facilitate sales of all kinds of goods and services in order to create a breakthrough for the national economy to quickly recover? This is considered as the most important question for the second half of the 2013 Socioeconomic Development Plan.
Weak demand, supply hard to increase
The national economy is recovering and striving to achieve better results in the second quarter of 2013 in comparison with the first quarter. However, possibilities for sustainable recovery are weak.
The capital absorption capacity of the Vietnamese economy remains low. The average credit interest rate has now decreased by 3-4 percent compared with January 2013. Commercial banks currently are full of money while the number of borrowers is limited. Meanwhile, investment from the state budget in the first five months of 2013 decreased by about three percent compared with the same period last year. In four key sectors, including transport, agriculture and rural development, construction, industry and trade, state investment dropped by nearly 20 percent. In Ho Chi Minh City, the largest economic center of the country, state investment increased by a mere 5.5 percent, Ba Ria-Vung Tau, up nearly four percent, while in Da Nang that fell by over 41 percent. Data from the General Statistics Office show that in the first five months of 2013, only the Foreign Direct Investment (FDI) sector recorded an investment disbursement growth.
A decline in investment has led to feeble sales of goods and services, high inventories of goods and real estate as well as decreased production output of the industrial, agricultural and seafood sectors. For example, the television manufacturing output in the first five months of 2013 dropped by nearly eight percent, automobile down by 1.4 percent (passenger car down by 8.5 percent); decreases were also reported about the production output of fabrics weaved from natural and synthetic fibers.
Moreover, the consumer purchasing power grew at a low level, and the growth would be inconsiderable if price rises were taken into account. Specifically, on average, each person spent over VND2.37 million in March, over VND2.38 million in April and VND2.41 million in May. In the first five months of 2013, the average consumer spending was about VND2.38 million per person per month, of which nearly 80 percent was spent on food, drinks and the most essential shopping needs.
General solutions
Above statistics show that public investment reduction and low consumer purchasing power are the main factors restricting sales of goods and services.
To improve the situation, recent workshops participants and some National Assembly members proposed that the government should promote the issuance of government bonds to raise investment capital for major national projects. This is considered as a practical proposal and it is necessary to encourage all people to support it. However, many experts think this is just a palliative measure. In the long term, in their opinion, it is necessary to tap the potential of non-state economic sectors.
At the same time, it is necessary to accelerate the implementation of major Official Development Assistance (ODA) programs and projects in order to attract more capital from this important source in the years to come. ODA disbursement will be assessed at the forthcoming mid-term Consultative Group (CG) Meeting.
In addition, it is necessary to intensify export promotion activities targeted at not only new markets but also traditional markets such as Japan, Russia, Belarus and Kazakhstan.
Many overseas Vietnamese investment projects have been effective but inconsiderably contributed to increasing sales of domestic products and services in foreign markets. More than ever, it is time to combine overseas investment and export promotion efforts. Overseas Vietnamese businesses must contribute to building and developing a market for Vietnamese goods in foreign countries.
Increasing sales of goods and services currently is the key to economic recovery and development, helping maintain macroeconomic stability, curb inflation and promote economic restructuring in the future./.
By Tien Hai
Đăng ký: VietNam News