New government to confront mountain of economic challenges

Regarding the 2015 public debt of 62.2 percent and government debt of 50.3 percent, head of Cao Bang National Assembly (NA) delegation La Ngoc Thoang told VnExpress that these are some of the significant problems the government needs to solve.

“Government debt includes guarantees for many state owned enterprises (SOEs) that are performing ineffectively,” Thoang said.

New government officials face huge challenges. Photo by Giang Huy

According to Thoang, high public debt is being compounded by limited state budget collection due to falling oil prices in the past six months and bankrupt enterprises. 

The new cabinet needs to develop support policies to maintain business operations so that enterprises can earn more money and contribute more to the state budget.

“Over 20,000 enterprises closed in the first three months of the year, and that's not normal. Obviously, this is a great challenge for the government under new Prime Minister Nguyen Xuan Phuc’s administration,” the NA deputy from Cao Bang said.

On the other hand, NA deputy from Soc Trang province Tran Khac Tam emphasized that the new government needs to strengthen institutional reforms despite initial successes.

He admitted that streamlined customs and tax procedures have saved hundreds of hours and the improved investment environment is a highlight of these efforts, but complaints about administrative procedures remain rampant.

“Institutional reform must be considered the new driving force of economic growth. We cannot afford to slow this process down as other regional countries could leave Vietnam far behind,” Tam added.

However, he also expects PM Phuc, who was in charge of Program 30 on administrative reform, to apply his experience to stir activity.

NA delegate Tam, owner of a furniture and equipment corporation, underlined that reinforcing competitiveness in the context of international integration, especially the TPP, is a tough issue the new government will need to confront.

“The TPP will put pressure on our economy as one of the weakest members. If we cannot step up and take advantage of it, giant multinational corporations will take their chance and defeat domestic enterprises,” Tam said.

Referring to cases of seafood from the Mekong Delta being returned from Europe due to excessive antibiotics, the NA delegate said: “Vietnam’s businesses are spontaneous and unprofessional without the quality to compete with global enterprises in this time of international integration.”

He went on to paint a bleak picture of the battle to agree trade commitments and then live up to expectations from foreign countries.

In an exclusive conversation with VnExpress after he was nominated chairman of the Government Office, Mai Tien Dung also said the country's new leaders need to solve issues regarding the economy and domestic competitiveness.

“For instance, Samsung has been asking domestic enterprises to produce components for its products for a long time now, but only few accepted” Dung said.

According to the head of the Government Office, state authorities will support domestic enterprises in terms of regulations, investment environment and legal framework. However, companies need to take responsibility themselves by improving governance, technology and strategy.

Moreover, the spokesman agreed that budget balancing in the context of high public debt and falling oil prices is difficult, but the PM and his new cabinet will have to do their utmost to solve these difficulties as soon as possible.