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Economic reforms on track, survey affirms

The comprehensive economic reforms initiated in Viet Nam in 1989 were successfully paving the way for a transition to a market economy, a think tank survey suggested.

The comprehensive economic reforms initiated in Viet Nam in 1989 were successfully paving the way for a transition to a market economy, a think tank survey suggested.

"The Government has successfully initiated and carried out a series of macroeconomic measures pursuing stability, notably regarding control of growth of credits and public expenditure," concluded the survey, conducted by the International Institute of Food Policy and the Central Institute of Economic Management. The survey, which reviewed Viet Nam�€™s economic policy since 1989, claimed Government subsidies for State-owned businesses had substantially decreased and were on their way out. The Government had eliminated household subsidies distributed through the �€˜allocation system.�€™

The Government�€™s policies regarding State-owned businesses were showing positive results. It had slashed the "ask and grant" practise, provided preferential credit, offered businesses greater autonomy and shut down inefficient operations.

The Government had slashed the number of State-owned businesses by 50 per cent in the past seven years. Many businesses were growing accustomed to upgrading their technology and forming joint ventures with foreign partners. State-owned businesses were undergoing equitisation.

The Government�€™s fiscal policies had cut inflation to 5 per cent from 775 per cent in 1986.

Price liberalisation, coupled with macroeconomic stability, was reaping rewards.

Most Government-imposed prices were being phased out, providing for producers�€™ incentives.

The growth of the private sector was another success of Viet Nam�€™s economic reforms.

The Government offered incentives to encourage businesses to focus on production and distribution.

It had created a legal framework for the business sector, creating a level playing field for all businesses.

Millions of households were engaging in business, especially in the service sector, contributing to the country�€™s economic growth.

There were at least 23,000 private businesses, limited liability and joint stock companies operating under the private business and corporate laws.

The survey suggested Viet Nam was also successfully reforming its agriculture, trade, investment and banking sectors.

Land allocation policies and the promotion of modern technology were creating momentum for more than 10 million farming households to continue farming.

This transformed Viet Nam from a country that once imported food into one of the world�€™s leading rice exporters.

Viet Nam was trading with about 200 countries and territories and had signed trade deals with about 80, including major partners such as the European Union and the United States.

The country was gearing up to enter the World Trade Organisation by 2005.

Direct investment played an important role in Viet Nam�€™s economy.

Investment was returning to 1993-97 levels after dropping during the Asian economic crisis.

Economic reforms were also producing encouraging results in the country�€™s fight against poverty, which fell to 11 per cent of households in 2003, and social fields, the survey suggested. �€” VNS

VNS - (26/02/2004)

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