On the morning of October 10th, at the Ministry of Finance’s premises, Deputy Minister Tran Xuan Ha had a meeting with the delegation of the International Friendship Exchange Council (FEC) of Japan led by FEC Vice President Yoshihiko Nakagaki. Leaders of the Ministry’s departments were present at the meeting.
Deputy Minister Tran Xuan Ha welcomed the FEC delegation to visit the Ministry of Finance. He appreciated the role of FEC in strengthening the friendly relationship between Japan and Viet Nam, especially when Prime Minister Nguyen Xuan Phuc was having an official visit to Japan.
Image: Deputy Minister Tran Xuan Ha at the meeting
Speaking at the meeting, FEC head of delegation Yoshihiko Nakagaki thanked Deputy Minister and other members of the Ministry of Finance for the warm welcome. He appreciated the economic development of Viet Nam in recent years with average GDP per capita at USD 2,300 per year, national GDP at USD 200 billions per year. Viet Nam had reached mid-level development stage and is able to ensure stable economic development and maintain the balance between sectors by applying proper monetary and financial policies.
Yoshihiko Nakagaki believed that in the future it is vital for Viet Nam to focus on infrastructure development such as power, seaports, transportation infrastructure… Besides, accelerating the privatization of SOEs would help to mobilize capital for infrastructure investment. However, this progress was faced with a number of obstructions and the delegation would appreciate to listen to the opinion of the Ministry of Finance.
Image: Head of FEC delegation speaking at the meeting
Listening to the discussion of the delegation, Deputy Minister Tran Xuan Ha stated that Viet Nam prioritized stability in economic development by balancing budget and manage stable public debt. Furthermore, economic development must go alongside with social security and environment protection. Viet Nam recently saw high growth rate of 6.7-6.8%, inflation below 5% and budget deficit under 4% GDP over the period of 2016-2020. Public debt remained at the level approved by the Government.
Currently economic development relied on three main pillars, respectfully institution completion, infrastructure development and human resource improvement. In which, infrastructure development was the most important.
Transportation was considered the most important part in infrastructure development. Viet Nam currently focused on developing the North-South and East highway transportation routes, airports, railways and seaports.
Investing in power was also an important task to the Government. Besides thermal power and hydro power, Viet Nam paid special interest in renewable energy such as wind power and solar power. In addition, water supply, waste processing and urban transportation system as well received much attention.
Viet Nam used both state budget and private capital for infrastructure investment. With regard to state budget, according to the plans for 2016-2020 period, Viet Nam would allocate 2 million billion Viet Nam dong to invest in infrastructure. State budget included tax revenue and borrowings. Regarding private capital, the Government encouraged both domestic and foreign investors to take part in investing.
Image: Overview of the meeting
The transportation and electricity projects received interest from private sector in the form of BOT. Several private businesses had invested in renewable power projects such as wind power and solar power. The Government also encouraged participation of the private sector in other investment projects.
In addition, the Government offered solutions to assist businesses investing in infrastructure. For example, in power sector, the Government supported the Viet Nam Electricity Corporation (EVN) to mobilize domestic and international capital through on-lending method. For important projects, the Government provided guarantee for businesses. On the other hand, Viet Nam continuously developed the securities and capital markets to ensure long term capital resources for infrastructure development.
Regarding equitization of SOEs, the Government considered it an important mission and targets various goals: first to generate budget revenue for investment, and second, more importantly, to change business governance towards a transparent market.
The Government approved the scheme for SOE equitization over the period of 2016-2020. In 2016 and 2017 the progress was quite positive with many SOEs being equitized in line with the plan. In the first months of 2018, the Government continued to direct corporations to promote equitization. These corporations were currently carrying out procedures for enterprise valuation, land use review as well as dealing with financial issues arising from equitization. The remaining enterprises to be equitized in 2018, 2019 and 2020 and following years were all large enterprises and needed more rigorous preparation process. The revenue from equitization would be centralized at the Government Equitization Fund, which was the source of funds for development investment. Expenditures from this Fund must be in compliance with the laws of Viet Nam.
Image: Representatives taking group photo
At the meeting, Deputy Minister Tran Xuan Ha had a direct discussion with the delegation of the FEC on topics of interest such as: the criteria for selecting strategic investors to sell state shares in SOEs, renewable energy projects, etc. At the same time, he expressed his appreciation and willing to create favorable conditions for foreign investors, including Japanese investors when investing in Vietnamese market.
Deputy Minister Tran Xuan Ha affirmed that the relationship between Viet Nam and Japan is a strategic partnership. Over the past years many high-level visits had been made between Japan and Viet Nam, such as the visit of Japanese Prime Minister Shinzo Abe to Viet Nam and the visit of President Tran Dai Quang to Japan earlier this year. At the present, Vietnamese Prime Minister Nguyen Xuan Phuc and his delegation are visiting Japan and attending the Mekong – Japan Summit on Cooperation. This Summit is aimed at discussing the cooperation between Japan and the Mekong subregion. The Deputy Minister believed that Japan should promote its relationship with Viet Nam and strengthen its cooperation with the region through Viet Nam.
T.Tiên
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