How will the picture of Vietnamese economy look like in 2014? Will Vietnam be able to maintain economic growth as expected? Are newly established financial and banking institutions strong enough to strengthen the health of the economy? Will incomes remain a pressing public concern as in 2013? Mr Nguyen Duc Kien, Vice Chairman of the Economic Committee of the National Assembly (ECNA), has shared on these issues with Vietnam Business Forum. Anh Phuong reports.
In 2013, the Vietnam’s economy continued to expand, with GDP estimated to grow 5.5 – 5.6 percent. Do you think Vietnam can manage to keep up this growth rate in 2014?
In 2014, Vietnam is drafting a development scenario for GDP growth of 5.6 – 5.8 percent. And, we are absolutely confident about this growth rate. Of course, we need to put it in the global economic context of 2014, which is forecast not to experience considerable downward movements. Domestically, input economic growth indices will remain stable, not mixed as in 2013. I fully believe that we can accomplish this growth objective.
What is your opinion about equitisation of State-owned enterprises (SOEs) and their divestment from non-core business areas?
In fact, some experts suggested that the State only privatise well-performing, strong SOEs while weak ones will be decided later because a quick move with such firms might distress the market and drain the country’s resources. In this regard, in my opinion, this is just a point of view. It is important that who are the sellers and who want to divest. And, we should respect them if they decide to sell their assets. Meanwhile, expert opinions about the timing of equitisation, the degree of equitisation or the type of companies for equitisation should be regarded as sources of reference. The key is the sellers, because they are responsible for their decisions. And, we also need to time to attest their decisions. If their decisions are proven right after one or two years, we must respect them more. In the meantime, consultations should be used as references because hardly any one is responsible for their opinions given.
It is advised that the State should keep a greater proportion of stake in SOEs rather than an overwhelmingly excessive proportion. Do you think Vietnam should learn from developed nations in this regard?
In my opinion, we should learn from developed European countries such as France, Italy and Germany because their companies still have the concept of “golden shares” (golden share is a nominal share which is able to outvote all other shares in certain specified circumstances, often held by a government organisation, in a government company undergoing the process of privatization and transformation into a stock-company). Holding golden shares, the State does not need to hold more than 50 percent of stake to outvote the rest, but it only needs to keep just 3 percent or 5 percent to keep deciding power. For example, Siemens Group, which has revenue roughly equal to Vietnam’s GDP, almost has no shareholders keeping more than 3 percent. If Vietnam takes this case as reference, it must accept the reality that holding 1 percent of stake in Siemens also means holding controlling power. But, in Vietnam, the ratio must be 60 percent or even 70 percent. I personally believe that the numbers are not very important as the key remains internal resources, management team and the workforce of that company. And, we must respect their decision if they give specific numbers.
In 2014, Vietnam will have the central bank. Do you think this new name will change the role of the State Bank of Vietnam (SBV) and will improve the financial and monetary health of Vietnam?
The Law on State Bank 2010 defines that the State Bank is the Central Bank. However, after three years in which we implemented the instructive Decree 156/2013/ND-CP on functions, tasks, powers and organisational structure of the central bank, we only officially had the Central Bank from December 26, 2013. The central bank can be understood as the bank of banks. Here, we should pay much attention to the tasks and operational objectives of this new financial institution. Accordingly, the central bank will have clearer missions, with its ultimate goals of protecting the value of local currency – dong. Its mission of supporting growth is now only secondary. And then, the growth target will be transferred to governmental agencies. Being successful with this, we will have stable monetary policies. It will not be driven by economic growth pressures. And then we will comply with the Politburo’s conclusion that the State Bank of Vietnam is gradually becoming the Central Bank. This means that the degree of independence of this agency will be higher because, in many tense situations, the safety of national financial and monetary system will be risked if the handling process must be submitted to many agencies and wait for approval.
Of course, some years later, professionals and policy-makers will gather to see how banking laws function and discuss necessary changes to suit the new context.
Pay to State employees has been the centrepiece of attention last year. How do you assess this matter?
Currently, the State has imposed a salary limit on SOE leaders: Not exceeding VND54 million a month. The pay for leaders of companies operating in industries with exclusive advantages may be paid more, like VND60 – 70 million a month. Particularly, the leaders of Vinafood 1 and Vinafood 2 are paid nearly VND80 million a month each. I think this rate is quite high, even higher than that paid to the Prime Minister. However, we must respect the specific characteristics of different industries. This limit recently stirred up the public when some public utilities companies paid enormous salaries for their leaderships. I think monthly pay for executives of apparel exporters or petroleum traders can reach VND60-70 million. That is the salary for executive cadres. Regarding State employees, when a labourer accepts to work for the State, he/she must accept certain disadvantages in exchange for other benefits. For example, State employees are paid quite low, but they need never worry about unemployment and can purchase houses with a lot of incentives. And, if they infringe employment regulations, they will face the loss of incentives. And, we should not expect a society with equal pay for all because the State only introduces a base salary framework. Actual salary and compensation will be decided by employers after payroll schemes are submitted to the Ministry of Labour, Invalids and Social Affairs for review.
Đăng ký: VietNam News
