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According to the Asian Development Bank (ADB), Vietnam can completely obtain a double-digit growth rate in 2007, much higher than its goal of 8.5% if economic reform is intensified.
Director of ADB in Vietnam, Ayumi Kinishi, confirmed that after Vietnam becomes a member of WTO, export will be more favourable while domestic demand also grows strongly so this organization believes that Vietnam will achieve high growth rate this year.
ADB’s Asia Prospect Report 2007 released today, March 27, predicts that Vietnam can obtain GDP growth rate of 8.3% in 2007 and 8.5% in 2008.
However, ADB Vietnam Country Director emphasised that the number-one priority of Vietnam should be economic reforms.
“Vietnam should not focus on numbers. It is worrying if the growth rate is more than 9% or higher but it doesn’t come from reforms,” Mr Konishi said.
Omkar Shrestha, Deputy Director of ADB Vietnam, commented that Vietnam’s growth mainly relies on input factors like capital, human resources, and land, which are limited. The effectiveness of the use of input factors of Vietnam is reducing, he added.
For each US dollar pumped into production, China creates 3.4 units of products, 2.7 in Thailand and it is only 2.3 in Vietnam. In addition, Vietnam’s contingent of skilled labourers accounts for just 27% of the workforce compared to 50% of the region.
ADB experts, thus, warn that the country needs to shift its growth, which currently relies on capital, to growth based on creativeness and reforms.
“When the government speeds up reforms, high growth rate is a fact,” he said.
According to ADB Vietnam Director, Vietnam’s stock market is at the initial stage so many changes is unavoidable.
“It is worried if the stock market sees no adjustment,” he said.
He optimistically said that the stock market will continue growing but he warns that the problem comes from local investors.
“It is important to know how many investors who really understand about the stock market, how many investors who can read financial reports to analyses how are companies growing,” he said.
Companies’ provision of sufficient and accurate information for investors and the management ability of state bodies are also worried, he said.
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