International bond issue worth US$3 billion aims to restructure foreign debts from the viewpoint of how to utmost ensure national interests not because of money shortage for debt payment leading to rollover, Deputy Prime Minister Vu Van Ninh told the press on the sideline of the National Assembly’s meeting on October 24.
Deputy Prime Minister Vu Van Ninh (Photo: SGGP)
Debt rollover here means getting loans from a credit institution to clear debts at that institution or others.
Previously, the Government proposed the NA to permit issue of US$3 billion international bonds in the terms of 10-30 years at the opening session of the 10th meeting of the 13thNational Assembly. Interest rate will depend on international capital market at the issue time.
This has raised some public concerns over future debt burden.
According to Mr. Ninh, the current Public Debt Management Law permits debt restructuring to utmost ensure national benefits. For instance, previously Vietnam borrowed with high interest rate, now the rate falls down so the country get loans to pay the high interest loans although they have not matured.
The simplest way to reduce public debts is not getting loan. However it will face with resource shortage for development. Amid the current context, Vietnam must get loans to promote both inner and outside forces for investment not regular spending as per the State Budget Law.
Briefly, it is obligatory to make calculations to ensure the safety of public debts and national finance security. More importance is to tighten management and investment of loans to promote economic effectiveness to pay debts.
The loan investment focuses on key works and fields, which private sector is unaffordable or does not want to invest in, to create motive forces for economic development.
Besides, the deputy PM also answered reporters’ queries about the influence of the world’s crude oil price fall to budget revenue.
Crude oil accounts for a small ratio in the structure of budget revenue and gross domestic product. Therefore, its price drop’s influence to the budget revenue is not plain.
However the impact is great to socioeconomic conditions. It is not only negative but also positive such as inflation reduction benefiting residents. The crude oil price fall will cut input cost and boost production growth, from which domestic revenue will increase.
The Government has applied many measures to deal with the sharp fall of crude oil price such as lowering local standby budget’s level to 50 percent this year.
Budget revenue reduction forces expense cut. However, the Central Party Committee and NA’s resolutions have emphasized on social welfare requiring more budget spending.
The Government has implemented solutions to assist businesses to boost production, a way to ensure sources of revenue, via administrative reform and competiveness improvement.
Domestic revenue holds the main ratio in the structure of state budget revenue which the Government has presented to the NA.