After fighting against
inflation, VN now tries to stimulate demand
The bailouts, if they are launched, should
target consumers in order to stimulate the demand, experts say, warning that
the deflation, if it occurs, would be more dangerous than the inflation.
Dr. Tran Dinh Thien, Director of the Vietnam Economics
Institute, has noted that the inflation has decreased more rapidly than
expected, but there have been signs of the economic decline.
Despite the interest rate reductions, businesses still
cannot access bank loans because of the strict requirements set by the banks
on borrowers. Commercial banks keep reserved when providing loans, because
they still cannot clear the big bad debts.
Economists believe that in such conditions, a new
bailout is really necessary for now. Dr. Tran Hoang Ngan, a Member of the
National Advisory Council for Monetary Policy, thinks that the bailout should
target consumers, saying that stimulating the demand is a way to indirectly
support businesses.
The biggest problem for enterprises at this moment is
the high inventories. Therefore, once the government stimulates the demand,
this would help businesses clear their stocks to get money back to cover the
expenses.
How should the bailout be?
Since 2008, the government has applied a series of
measures in an effort to stop the economic decline. The total sum of money
spent so far, according to the Ministry of Planning and Investment, has
reached VND143 trillion.
However, the huge bailout could not reach the right
addresses. A National Assembly’s report showed that the bailouts have had
impacts on profitable businesses, while unprofitable businesses could not get
the support in need.
The 2009 bailout, in the eyes of economists, aimed to
stimulate the supply, not the demand.
Meanwhile, Phung Quoc Hien, Chair of the National
Assembly’s Finance and Budget Committee, has warned that the bailouts, if
they cannot be managed effectively, would make the financial burdens heavier
on the national economy.
As such, economists say, if Vietnam is going to launch
a new bailout, it should be a credit package to target consumers to stimulate
the people’s demand, encourage them to spend money on goods and services.
“We need to warm up the total demand of the national
economy,” said Vu Viet Ngoan from the National Financial Supervision Council.
In order to reach that end, the government needs to
increase its spending, or the public investments. This would help encourage
the production and create more jobs, thus helping rescue the national economy
from recession. Besides, the government has also been urged to cut tax to
support enterprises and people.
In late 2008, the Chinese government announced it would
launch a bailout worth $586 billion. The bailout comprised a mater program on
restructuring the country’s infrastructure system. This included the
projects on upgrading the rural infrastructure systems, railways, highways
and airports, the projects on developing power transmission networks,
protecting the environment and developing healthcare, education and culture.
The bailout did not aim to rescue commercial banks or
big conglomerates in difficulties, but aimed to stimulate the domestic
production.
Source: NCDT
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Thứ Tư, 12 tháng 6, 2013
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