Bright Future for Viet Nam’s Economy: UNDP Economist

Mr. Jonathan Pincus, senior economist of the United Nations Development Program (UNDP)

Viet Nam’s economy is entering a new epoch of development and the country’s biggest challenge is to maintain its current economic growth rate and to narrow the social gaps, said senior economist of the United Nations Development Program (UNDP), Jonathan Pincus, about Viet Nam’s economic situation in the next five years. SGGP reporter has  interviewed  him.

SGGP reporter: Do you think that Viet Nam’s economy was affected by the slowdown in the global economy after its maturity in 2005?

Mr. Pincus: In 2005, Viet Nam was much affected by the global economy’s slow development. However, with its stable inner power and suitable policies, Viet Nam’s economy is still able to maintain its growth rate of over 8%, one of the world’s highest.

SGGP reporter: What do you think about Viet Nam’s achievements in FDI and ODA in 2005?

Mr. Pincus: In 2005, the foreign direct investment (FDI) flow into Viet Nam was US$ 6 billion, up US$ 2 billion from last year. Besides, Viet Nam got US$ 3.75 billion in the official development assistance. Thus, we can see that the world highly appreciates Viet Nam’s efforts in the economic development process.

Many investors agree that Viet Nam’s economy is following the right track. Despite many current insecure and complex international relations, Viet Nam proves a stable and profitable environment for investors to join in. Japan is a typical example of foreign investment to Viet Nam. The USA is also an investor which has a fast growth rate, including the direct and indirect investments.

SGGP reporter: According to the new poverty grading system, Viet Nam’ poor households account for 20% of the population. However, some international economists said the number must be 30%. What do you think about this difference?

Mr. Pincus: Poverty-rating can be based on the average incomes per capita. Viet Namese’ average income is about US$ 500 per year; thus, some economists concluded that 30% of Viet Nam’s population is below the poverty line.

However, it is also reasonable to say that the number is only 20% when we work out the number under different formula, which includes the Vietnamese’ total income, the appropriate purchasing power and the social welfare.

SGGP reporter: Which development objective do you think Viet Nam should prioritize first in 2006-2010?

Mr. Pincus: In the past five years, especially when the reform policies were enforced, Viet Nam has successfully established a favorable environment to make use of the people’s creativity and potential. This factor has brought the country a historical opportunity to create more positive changes.

Viet Nam is facing an era of developing socially and economically. To achieve the objective, it certainly is a must for Viet Nam to focus more on the underprivileged group, which requires not only higher investment but also more equality among all groups.

I strongly believe that with such extraordinary ability, Viet Nam will successfully develop.

SGGP reporter: What do you think about Viet Nam’s chance to join the WTO in 2006?

Mr. Pincus: Viet Nam should not expect so much from the WTO’s integration. Some of the WTO’s regulations are not perfect. Most members of WTO are rich countries who will be better off than the poor ones.

However, Viet Nam should not worry too much about its loss because it obviously still earns a lot of advantages after successful integration to the WTO.

Only in Viet Nam can I find that the people have strong will even in the most disadvantages situations. Thus, it is possible for Viet Nam to join the WTO in 2006.

SGGP reporter: Thank you very much.

By: Van Nghia – Translated by: Trong Khuong

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