PART A

1 - HANOI - The Vietnamese politburo, facing slowing economic growth and runaway inflation, has mapped out measures to improve economic development in the country in the remainder of this year.

2 - The government's challenges include achieving 7% economic growth in the year after first-half expansion of 6.5%, inflation of 27% and rising, and difficulties in investment and production due to increasing costs, a lack of capital and a fluctuating exchange rate. The financial and stock markets also remain unstable.

3 - Workers trying to match rising pressure on their wallets, not least from a 31% increase in the price of petrol, are striking to back up demands for higher pay. Nearly 5,000 laborers at the Kingmaker footwear plant in the Vietnam-Singapore industrial zone in southern Binh Duong province, near Ho Chi Minh City, walked out earlier this month to back demands for a rise in their 1 million dong (US$60) per month salaries, Agence France Presse reported. More than 1,000 workers are also on strike at a South Korean factory in Long An province, the report said, citing the Thanh Nien daily.

4 - Vietnam on January 1 raised the minimum wage to 540,000 dong for state employees, to 620,000 dong for workers in state-owned companies, and to between 710,000 and 1 million dong for workers in foreign-invested enterprises.

5 - A politburo statement last week claimed positive results had been achieved in curbing inflation, stabilizing the economy, ensuring social security and maintaining economic growth. The country is feeling the impact of the crisis-hit US economy and spiraling global commodity prices, while there is a lack of government action plans and synchronized guidance of local authorities.

Mangroves and Channels in Monkey Island (Can Gio District, HCM City) - Photo by Pham Troc 

PART B

6 - To rein in inflation, forecast by HSBC to climb above 30% year on year this month after July's 27%, and stabilize the economy, the politburo pointed to the need to continue monetary tightening policies, and to adjust the exchange rate to boost exports. It also said steps were required to prevent speculation, to manage operations of commercial banks and to improve the effectiveness of the banking system.

7 - Declining prices for a variety of goods in Ho Chi Minh City suggest anti-inflationary policies such as increasing interest rates already taken by the central bank may be succeeding, with prices falling for a variety of good in Ho Chi Minh City, the Vietnam News reported, citing distributors and traders. The prices of cement and steel in Vietnam's largest city have fallen as local demand weakens, the newspaper said. Steel prices have declined 5% over the past two weeks, while cement prices are 1% lower than a week ago, according to the report.

8 - The currency, the dong, meanwhile gained 1.8% in the seven days to August 11 before weakening again this week to 16,520 per US dollar on Tuesday. The currency has weakened from 16,144 per dollar at the start of the year.

8 - The politburo asked the state-owned sector and businesses to improve the efficiency of investment capital from the state budget. It urged related ministries and agencies to effectively implement measures to reduce the trade deficit, while adopting import and special consumption taxes and non-tariff and monetary policies in line with international commitments. The trade gap in the seven months through July more than doubled to $15 billion, up from a $6.3 billion shortfall in the same period a year earlier, Bloomberg reported on Tuesday, citing preliminary figures from the General Statistics Office in Hanoi.

10 - The politburo called for more efforts to stamp out inappropriate regulations that hinder investment, production and trade activities. Priority should be given, it said, to boosting agriculture, forestry and fisheries while conditions should be improved for development of industrial and services sectors.

PART C

11 - Prime Minister Nguyen Tan Dung has instructed the finance and agriculture ministries to provide more than $70 million in aid to support fishermen, ThanhNien News.com reported on August 3. Fishermen have been hit by rising fuel prices and some have kept their boats docked in harbor rather than voyage out to sea.

12 - The politburo said funds agreed to in the state budget and from other sources such as foreign direct investment, development assistance and government bonds should be disbursed more speedily to meet capital demand for manufacturing and capital projects.

13 - Flexible tax policies should also be used in support of production and trade, particularly with regard to small and medium-sized businesses, while restructuring of state-owned businesses to bring them to market was also needed, the politburo said. At the other end of the economic spectrum, measures such as social security to help the poor, low-paid workers, and ethnic minorities should be simplified.

14 - The politburo also indicated its intention to step up reforms and attack corruption. At the same time, it said press agencies had to supply accurate information on the party and state policies and take measures to fight against negative propaganda by "hostile forces".

15 - Even as the politburo sets out its year-end goals, the economic outlook is brightening a little, with commodity prices slipping and cost of fuel such as liquefied petroleum gas cheaper because of declines in global markets, Vietnam News said. The local price of rice has also eased, according to the newspaper.

PART D

16 - Industry should also benefit from a decrease in power outages. The Viet Nam Electricity Group (EVN) had boosted power generation to 90% of its total capacity, a report on the Vietnam News website said on Wednesday. That represents a 20% increase in supply over July and may help GDP growth, which slowed in the first half from 7.9% in the first half last year, to pick up pace.

17 - "Most reservoirs serving hydroelectricity plants are full now," EVN general director Pham Le Thanh. "The current shortfall is mainly due to the fact that several new plants are yet to be completed and some others are under maintenance."

18 - EVN made a loss of 1.4 trillion dong (US$ 87.5 million) this year following the fuel price increase, he said. The company is seeking permission to increase tariffs, which were not raised when fuel prices were increased, the report said.

19 - The stock market, among the world's worst performers this year, is also showing signs of a recovery. On Tuesday, the VN-Index closed up more than 5 points at 459.89 on higher trading volume, Vietnam News Agency reported. The index plummeted from a closing high at 1106 early last October to 366 on June 20.

Source: Asia Times