News ∨
RSSThien A News
Partners
Necessity to clarify reason for ineffective use of State capital source
(Vietnamese Communist Party) - Confronting with difficulties due to impact of inflation, it is required to make every effort of the nationwide entrepreneur community to ensure manufacture and trading. Pham Thi Loan, Member of the 12th National Assembly of Vietnam, General Director and CEO of Viet A Investment Commercial Industrial Group Holdings Company (Viet A Group Holdings Co.) answered an interview of Vietnamese Communist Party E-Newspaper about the above:
Reporter: Are you pleased to give some information of impact of inflation on the entrepreneurs' manufacture and trading, specifically on Viet A?
Madam Pham Thi Loan: Inflation impacted on all entrepreneurs. We also had serious impact. First, capital sources for the projects carried out by us - the subcontractor were tightened and cut down due to difficulty in debt collection. Second, we must pay large interest rate because of high interest rate in the banks. Therefore, no project can ensure high difference to balance interest rate and other expenses offered by the bank. Third, high difference of exchange rate and foreign exchange rate also makes difficulty for the entrepreneurs due to payment of this difference... In my business career, this is the first time the Vietnamese entrepreneurs have met a lot of difficulties.
Reporter: Could you tell how Viet A adapted to the present situation to ensure effective manufacture and trading?
We must cut down unnecessary expenses including foreign business trip, car purchase, sponsor and advertisement; at the same time reduce investment and focus on debt collection; find financial solution to confront with high interest rate; recheck personnel and organizational structure to reduce personnel if not inefficiency (the company must dismiss some employees); limit and be cautious about searching the business projects. While the projects decreased, the market cake is shrunk and the number of eaters (entrepreneurs) is unchanged, the vital competition will be more fierce due to eaten or eaten person.
Reporter: Being a leader of the big company and a member of the 12th National Assembly of Vietnam, could you contribute your idea about inflation control carried out by the Government?
The Government is actively carrying out inflation control. If more suggestion, I think regulation on 30% of credit growth for the banks should not be applied. The banks need to self-grow and self-develop based on their ability. But this must be strictly controlled. It is necessary to control available capital, capital lending mechanism, priority order of foreign currency use, sector classification and capital lending priority... Import of private airplanes, expensive cars of tens of billion Vietnam dong or wine, beer and luxurious items ...
In addition, the State can use a part of National foreign currency reserve to provide for the bank in order to stabilize exchange rate and ensure export-import to circulate. If the banks still lack available capital after balance, the State must approve the loan mechanism for the commercial banks. It means that the State Bank of Vietnam must lend the commercial banks to maintain their operation. Focus is on not only anti-inflation but also stable operation of the whole economy system. If we attach importance to anti-inflation without paying attention to operation and development of the whole economy, the economy will be receded and unstable. No capital and payment of high interest rate will make the entrepreneurs reduce investment and cut down the staff, causing social impacts such as increasing unemployment, more miserable life of workers and other consequences.
In my opinion, it needs to thoroughly consider reasons to control inflation, limits and weaknesses in managing the macro-economy. On behalf of the Government, the Prime Minister admitted defects in the third session of the 12th National Assembly of Vietnam. It is important and necessary to carry out eight solutions approved by the Prime Minister to control inflation, stabilize macro-economy and ensure social living and sustainable growth. We need to clarify reasons and continue strictly rectifying limits and weaknesses in ineffective use of state capital source. Annually, VND 50-70 billion of capital transferred into the next year is unacceptable. The priority of capital use is problematic. Some State Corporations and Groups used state capital to invest to other fields without their main ones. There is no efficient finance solution to promote domestic production and reduce import surplus. The tightened monetary policy is positive but necessary to consider because it becomes "anemic" for the body of economy, leading to paralyze some parts of the body. Increase of bank interest rate seems to increase amount sent to the bank. But this can make the people unbelievable and use money to buy gold or foreign currencies to reserve, even make the foreigners unbelievable and withdraw currencies in Vietnam dong to transfer foreign currencies or bring foreign currencies back their countries, creating unsafe situation on the monetary market... As a member of the National Assembly, I estimate to question the Bank about some problems in the current monetary policy.
Reporter: Thank you!
