Optimists should not play up stabilization

VOV: Do you think stimulus packages can lead to inflation?

Mr Ninh: Of course, we have to take inflation into account. That’s why the government has taken measures to both control the rate of economic decline and assure growth. The stimulus packages will be counterproductive if the economic quality of the proposed spending remains low. Only efficient investments in our currently poor infrastructure can boost economic growth, reverse the macro balance and help to control inflation.

VOV: Some National Assembly deputies say that the economy may grow at more than five percent if the US$8 million package takes effect. What’s your opinion?

Mr Ninh: The stimulus package will certainly have a good impact on economic growth. The package has been introduced for a short time but we have already seen its initial positive results. The calculation of the targeted growth rate must be based on a range of various factors. To achieve a target of five percent, Vietnam will have to make a great deal of effort.

VOV: Many people think that the VND17-billion package for supportive interest rates resembles a rescue for enterprises and banks and has had little impact on the economy. Is it right?

Mr Ninh: That idea is flawed because a stimulus package aims to solve not only immediate problems but also long-term ones. Over the past year, businesses have received support in terms of liquid capital only but now they are offered low-interest loans to spur their investment, increase their competitiveness and restructure their operation. With the government expanding guarantees, businesses can also go ahead to borrow foreign capital and import modern equipment.

VOV: But some people argue businesses who are really in a fix will have no access to stimulus packages, which tend to fall into the hands of those having advantages in the economy?

Mr Ninh: This depends on each person’s point of view. I myself believe that a stimulus package should give priority to strong businesses that serve as a driving force behind the economy, not to those who operate ineffectively.

VOV: Do you think Vietnam’s economy has escaped the worst of the downturn?

Mr Ninh: In a recent report, the government noted that the economy has shown some positive signs of recovery and is likely to bounce back any time soon. However, I think optimists should not play up stabilization until the global economy finds its bottom. As a rule, there will be fluctuations before businesses can really get themselves back on track.