- News in Vietnam
- 29 September 2021
Experts suggest how to bring Vietnam back to the ‘new normal’
Several domestic and international experts suggested that Vietnam needs more “fresh money” support packages for difficult people to recover.
On the morning of September 27, at a seminar to consult experts on socio-economics chaired by National Assembly Chairman Vuong Dinh Hue, Mr. Jacques Morisset – World Bank’s chief economist in Vietnam, assessed that Vietnam prices have moved from “star rating” to “below average.”
He explained that Vietnam lost “star points” because of the deteriorating health situation, slow vaccination and strict travel restrictions, small and unbalanced economic response policies, support social “shy and restrained,” much less than most Asian countries. According to the World Bank representative in Vietnam, Vietnam needs to have a plan if Covid-19 continues in the next year.
For Vietnam to return to the “new normal,” the WB expert suggested that Vietnam should accelerate vaccination in combination with testing to control the disease and minimize economic losses.
“The speed of economic recovery is strongly correlated with the size of vaccination programs, but testing remains an important measure to restrain the pandemic,” said Jacques Morisset.
Mr. Jacques Morisset also recommended that movement restriction management be smarter, based on close monitoring and information sharing to adjust movement restrictions, simplify and coordinate processes. He suggests that targeted isolation is the most cost-effective way.
To stabilize the macro-economy, it is necessary to have a more fiscal policy and less monetary policy. Because according to the World Bank’s assessment, fiscal policy is a tool that the Government has not used much, but it can help stimulate demand in the short term and supply in a long time, while fiscal space is available in the present and the short term can all be done.
Regarding monetary policies, the World Bank assessed that the Government used this tool more to support businesses temporarily, but it was relatively ineffective and could increase financial risks due to high bad debts, lack of transparency in rescue packages.
Meanwhile, Mr. Terence Jones, acting Chief Resident Representative of UNDP in Vietnam, emphasized cash support for disadvantaged groups in society.
According to experts, in addition to needing more substantive support packages, Vietnam needs an overall economic recovery and economic development program during and after the epidemic.
“The government should soon develop and implement a master program for economic recovery and development during and after the Covid-19 epidemic,” said Dr. Nguyen Thi Hong Minh, the Central Institute for Economic Management director.
According to her, from now until the first quarter of 2022, the Government should prioritize epidemic prevention, combine macro policies (including promoting disbursement of public investment) to support businesses to survive through difficult times, and maintain the reform of the business environment.
By the end of 2023, macroeconomic policies will be loosened, stimulating the economy and creating more resilience for businesses when the epidemic is under control.
After 2023, continue to normalize macroeconomic policies and promote far-reaching economic reforms. The Government also needs to accelerate support packages for the people, immediately removing difficulties in accessing support policies.
Mr. Can Van Luc noted that the Government’s economic recovery scenario should be considered a unified “framework” for localities to implement, to avoid letting “each locality have a plan, and a strategy that is too hard to get results.”
The director of CIEM emphasized that macroeconomic policies need to be flexible according to scenarios to cope with adverse developments in the world and regional economies, especially the strategic competition between the US and China dealing with FDI inflows, trade scenarios with the US, CPTPP expansion scenarios and RCEP ratification scenarios, risks of global debt crisis…