Prime Minister Nguyen Tan Dung’s Interview Granted To The Bangkok Post
I. On the economic and financial crisis
1) How serious is the impact of the financial crisis to the Vietnamese economy and how is the government addressing the adverse effects?
The global financial crisis is on with highly complicated developments, affecting the world economy in general and individual economies, including Vietnam, in particular. In the mid-2008, high inflation and widened trade deficit occurred leading to an economic slow-down from the final months of the year to this day.
However, thanks to its strong and comprehensive measures, Vietnam managed to control inflation, maintain macroeconomic stability, ensure social safety net and keep a GDP growth of 6.23% with an increase of 30% in export and attraction of US$ 64 billion of registered FDI, tripling the 2007 figure.
Since October 2008 to date, the complicated developments of the global economic crisis and recession directly make their impacts and slow-down the Vietnamese economy, especially by narrowing down production and business, decreasing in export, thus greatly affecting the life and work of the people. To address these enormous challenges, Vietnam is putting all efforts to implement comprehensively the emergency measures with focus on prevention of economic slow-down, stimulation of production and business, increase of export and guarantee of social safety net. The application of these solution packages has brought about positive initial outcomes.
With the determination to further improve the market economy structure and enhance international integration so as to keep on with the reform of the country on the basis of socio-political stability and the consensus and active participation of the people and business community, Vietnam believes and hopes that together with other countries in the region and the world, we will soon get out of the crisis and enter in a new phase of strong and stable development.
2) This crisis is different from the 1997 crisis. How will the regional grouping such as ASEAN collaborate to stay afloat during the difficult times? Is there should be any other schemes ASEAN should come up with apart from the standby arrangement which will be discussed by the finance ministers?
This crisis is quite different from the one in 1997, both in terms of nature and degree of impact. As such, the response to it and the recovery from its impacts require stronger efforts from each nation as well as better cooperation among nations, regionally and internationally. This is a matter of special concern for ASEAN members and other regional countries. On the sidelines of the ASEM 7 Summit in Beijing in October 2008, the Leaders of ASEAN and ASEAN+3 discussed at length about the global financial crisis and reiterated their commitments to enhance cooperation and policy coordination to prevent the negative impacts on their economies and the region as a whole. At the same time, they also explored possibilities to expand cooperation with the outside world and accelerate intra-ASEAN cooperation.
At the upcoming Summit, ASEAN leaders are expected to scrutinise the Report by ASEAN+3 Finance Ministers on the “Action Plan to Restore Economic and Financial Stability of the Asian Region” for adoption at the ASEAN+3 Summit. The Action Plan includes four main solutions, namely: (i) proactive macroeconomic solutions at national level; (ii) acceleration of the multilateralisation of the Chiang Mai Initiative to create the instrument to support the balance of payment; (iii) in-depth development of capital market through the Asian Bond Market Initiative; and (iv) enhancement of the role of the multilateral development banks to limit the impacts of the crisis.
In the years to come, I believe that ASEAN countries should continue to take measures to restore market’s confidence and investors’ trust, enhance information and experience sharing in responding to crisis, foster cooperation in economics, trade and investment to boost each member country’s growth.
3) In the past experiences, the region has looked for some external help in shoring our reserve of import more of our exports, but now it will be difficult. Do you think the FTA and other measures that the ASEAN have been launching will adequately prop up the regional economies?
We have travelled a long way on the path of ASEAN economic integration. ASEAN is actively implementing the Master Plan on ASEAN Economic Community (AEC) endorsed in Singapore in November 2007. The establishment of the AEC will promote the growth and development of each member country, increase the economic and internal strength of ASEAN, and help ASEAN member economies overcome the current global financial crisis.
In the current context, the ASEAN Free Trade Agreement and other bilateral free trade agreements between ASEAN and its partners (FTAs) have a crucial role to play. They will be one of the solutions to boost two-way trading of goods and commodities, including ASEAN exports, create more attractiveness and favourable conditions for foreign and intra-bloc investment in the region, and help maintain and stimulate economic growth for each member.
Economic and trade linkages between the Association and the major economic and trading partners are a positive choice for each member economy, creating the new position and strength for the Association in general and each economy in particular.
I believe that the promotion of trade, investment, financial and monetary cooperation and linkages within ASEAN and between ASEAN and its outside partners through the frameworks of ASEAN+1, ASEAN+3, EAS will help ASEAN economies overcome the global economic and financial crisis.
II. On the building of the ASEAN Community as per the new Charter and regulations
1) ASEAN has been impressed by the outside partners that we are now having a Charter, but for domestic players such as the civil society or even business sector, they are still wondering what will be the real benefit to the closer integration of ASEAN. What is your opinion on the new developments in ASEAN?
The adoption and entry into force of the ASEAN Charter represent a major event of the region. The document provides a firm legal framework instrumental to the Association’s enhanced coherence and effectiveness. It also acts as a manifesto to the people in the region and the world on the noble goals pursued by ASEAN towards the future, which include the reinforcement and maintenance of regional peace and stability, creation of an enabling business environment and securing of a safe and sustainable living environment for the people in each country.
The ASEAN Charter will play an important role in the process of building an ASEAN Community with 3 pillars: political-security, economic and socio-cultural. It will provide the norms for the process of expanding cooperation, deepening integration and enhancing solidarity of ASEAN. This document establishes new machinery and ensures that ASEAN operates in an integrated manner for more effective implementation of its programmes and objectives. As such, the Charter would definitely bring about practical benefits to ASEAN and its peoples.
For the very same reasons, the 14th ASEAN Summit in Thailand has chosen the main theme of “ASEAN Charter for the ASEAN peoples”. I am looking forwards to the discussions on ways and means to bring the ASEAN Charter into real life and bring the benefits of ASEAN’s cooperation and integration closer to the people.
2) Vietnam is usually considered a core leader among the newer members in ASEAN due to the later joining and different political system. How do you see the image of Vietnam within the ASEAN changing during the past few years?
“Unity in diversity” is the outstanding characteristic and operational motto of ASEAN. The Association includes countries in the region which have different historical, cultural, political, economic and social backgrounds. Yet, they are striving for one common goal, i.e. the building of an ASEAN of peace, stability and development. ASEAN’s inclusion of all 10 regional countries, with Vietnam’s participation and then Laos, Myanmar and Cambodia later, has created an important turn for ASEAN. Solidarity and consensus have forged the vitality and positive development of the Association. Each achievement and progress of ASEAN are the joint contribution of each member.
Since its participation into ASEAN, Vietnam has been actively and proactively making practical contributions to the furtherance of solidarity and sustainable development of ASEAN.
In its one and a half decade of being an ASEAN member, Vietnam has also actively carried out the reform process and recorded significant achievements in economics and all other aspects of the country’s life with an average annual growth of 7.5-8% for the last 20 years. We have expanded our relations and cooperation to over 180 countries and partners in all continents, participated actively in international and regional organizations, including the UN, WTO, APEC and ASEAN, etc. These outcomes show that Vietnam is a dynamically developing country, a friend and partner of all countries for peace, independence and development.
3) The formulation of ASEAN Human Rights Mechanism is under close watch by people within the region and outside. How do you think the new human rights body should function amid high expression that the new mechanism should be able to look into some problems within member countries?
Vietnam supports the promotion of ASEAN cooperation in all areas, including human rights.
As an ASEAN body, the ASEAN Human Rights Body (AHRB) is responsible to promote and protect human rights, while at the same time, contributes to the realisation of the common goal of building the people-oriented ASEAN Community. In its operation, AHRB will have to conform itself to the goals and principles of the ASEAN Charter, including the principles of consensus and non-interference in internal affairs of other nations. Besides, it must also attend to the distinct characteristics and diversity of the region in terms of culture, economics, society, customs and traditions, etc. The AHRB should be encouraged to promote cooperation, work out a common regional strategy and approach on human rights, creating a foundation to promote cooperation to ensure and implement human rights in the best way in line with the particularities of each country and of the region.
4) ASEAN is also trying to come up with some plan of action for building up of the ASEAN Security Community. However, some argue that this is not the conducive time to forwarding the dream. The region still needs to enhance closer economic and political integration. Confidence building is still needed before the region could become a true community sharing and guarding same values and security concerns. What is the Vietnamese stance on this?
The commitment to establishing the ASEAN Community by 2015 not only shows the vision of ASEAN on the threshold of the 21st Century but also the outcomes of ASEAN development over the past four decades, reflecting the determination for deeper and broader integration of the member countries and creating the preconditions for the future community and the development of a strong and harmonised ASEAN living in peace, stability, cooperation, development and prosperity.
To achieve this important goal, apart from the Charter, ASEAN has worked out a roadmap from now to 2015 and the years beyond for the building up of the three pillars, namely the Political and Security Community, Economic Community and Cultural and Social Community. With such concrete steps, the building up of the Political and Security Community and other Communities is of great significance. This is no longer a dream but a reality.
This is indeed a process of building the confidence among countries in order to guarantee an environment conducive to peace, stability and development. Moreover, this process will facilitate ASEAN to further expand its cooperation and relationship with the outside partners, especially with big countries to gain support for ASEAN’s concerted efforts.
III. On bilateral and sub-regional cooperation
1) International organizations have been baking on Thailand and Vietnam to help strengthen capacity of other neighbours such as Laos, Cambodia, and Myanmar. But how much the two countries really do to help support other members in the peninsula?
Through the bilateral and multilateral cooperation programmes among countries in the region, Vietnam and Thailand have enhanced economic and trade exchanges and cooperation with Laos, Cambodia and Myanmar. We have assisted these countries in narrowing down the development gap with other regional countries. Thailand and Vietnam have taken the lead in prioritized areas of cooperation such as transportation, human resources development, tourism, trade and investment facilitation and cross-border movement by the cooperation programmes within the frameworks of ASEAN, the Greater Mekong Sub-region (GMS), the East-West Economic Corridor (EWEC), the Mekong- Ganga Cooperation (MGC) and the Ayayewady-Chao Phraya- Mekong Economic Cooperation Strategy (ACMECS).
Vietnam has proposed and realized the initiative on West-East Corridor (WEC) adopted by the 6th ASEAN Summit in Hanoi in December 1998. This initiative is aimed at eliminating hunger and reducing poverty, and narrowing the development gap among areas in the Sub-region through cooperation in transportation, post and telecommunication, trade, services, tourism and human resources development. Following the initiative on the Ayayewady- Chao Phraya- Mekong Economic Cooperation Strategy (ACMECS) by Thailand in 2003 and with a view to promoting economic cooperation, increasing comparative advantages among regions and countries, and narrowing the development gap, the 3rd ACMECS Summit held on 4-7 November 2008 in Hanoi adopted the Statement of ACMECS’ Leaders on promotion and facilitation of trade, investment and tourism. In this meeting, the ACMECS’ Leaders agreed on priorities of economic cooperation and promotion of intra-bloc trade and investment in response to the challenges and adverse impacts of the global economic slowdown.
In addition, Vietnam and Thailand have taken efforts to mobilize sources of partners like the Asia Development Bank (ADB) and Japan, etc. for the regional cooperation programmes.
2). Donors such as Japan have been receiving a number of requests from vacious sub-regional groupings such as the GMS, ACMECS, and the Laos-Cambodia-Vietnam Summit. How do you think countries in the region should streamline development projects so as to get assistance fro the most-needed and most urgent projects?
Thanks to its strategic geo-political location and potentials for development, both bilateral and multilateral donors have been paying due attention to the ASEAN region.
To deploy the Cooperation Programmes within the frameworks of the Greater Mekong Sub-region (GMS), East-West Economic Corridor (EWEC), Mekong-Ganga Cooperation (MGC), Ayayewady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), Cambodia-Laos-Myanmar-Vietnam Summit (CLMV) and others, regional countries have developed and introduced a list of projects urgently calling for investment to be given to donors. The priority areas include transportation, energy, environment, trade, investment and tourism, etc.
Vietnam hopes that despite the troubled world economy, donors will continue to support regional countries in implementing such projects.
3) How do you describe the status of Vietnamese-Thai cooperation in all fronts? Is there anything the two governments should do to address common challenges in the coming months?
Vietnam and Thailand are close neighbouring countries having a long tradition of friendly relations. During the past years, the two countries have seen remarkable progress in all areas of cooperation. The mutual understanding and trust between the two leaderships and peoples have been further strengthened. Exchanges of delegation have been made regularly. Two-way trade volume in 2008 reached approximately US$ 6.2 billion, an increase of 31% as against 2007. On investment, by March 2009, Thailand has 198 projects in operation in Vietnam with a total registered capital of nearly US$ 5.7 billion, of which the implemented capital is US$ 835 million. Exchanges and cooperation in such areas as culture, education, training, sports, tourism, security, defence, and crime prevention have also been enhanced. Cooperation mechanisms including the Joint Commission on Trade Cooperation, Joint Cabinet Meeting, Joint Working Group on Political and Security Cooperation have been set up and operated effectively. The two countries have worked closely together in regional and sub-regional cooperation frameworks as well as international forums.
In the near future, the two countries need to further enhance comprehensive cooperation in all fields, especially economic and trade, investment, security and defence with a view to overcoming the current negative impacts of the world economic crisis as well as challenges brought about by globalization, thus contributing to the stable and sustained development in each country. In addition, the two countries need to work more closely with other ASEAN countries in order to be successful in building the ASEAN Community for the sake of development in each country and for peace, stability and prosperity in Southeast Asia and the world at large.
4) Vietnam and Thailand have been discussing rice common market for several years without much success as traders claim that price mechanism is somehow controlled by the state, so price coordination is difficult. How do you think the two countries should collaborate in order to build up bargaining power in the world’s commodities market?
Vietnam is prone to unexpected natural disasters and floods, badly impacting agricultural production and as such, food security is always our top concern. Every year, Vietnam puts aside a sufficient amount of rice for domestic demand and some for export, thus contributing to the joint efforts of the international community to stabilise food prices and ensure global food security.
Vietnam always attaches importance to its cooperation with Thailand and other major rice exporters under bilateral and multilateral frameworks. Currently, the two countries are actively participating in a cooperation framework of the 5 major rice exporters, namely Thailand, Vietnam, India, China and Pakistan. Under the Ayayewady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), member countries are discussing ACMECS rice cooperation mechanism to increase the exchange of information and technical assistance. Vietnam and Thailand are also studying suitable ways and means to enhance bilateral cooperation to secure food security of each country while protecting the interests of rice producers, traders and consumers.
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