Despite one year of plans for economic restructuring, Vietnam's economy continues to face challenges in efforts towards recovery.
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Efforts to lighten industrial inventory, eliminate bad debt and lower corporate income taxes and value-added taxes and to reduce interest rates for loans in the real-estate market are only temporary solutions, said Dr. Nguyen Dinh Cung, Deputy Head of the Central Institute for Economic Management (CIEM).
He added that such measures are not much different than those taken in 2011.
In his opinion, because the reforms were aimed at enterprises in selected industries, they do not add up to a viable fix for the entire economy, and may cause harm because they enable companies to operate inefficiently.
"So far the approach to settling bad debt has focused on the banking sector instead on the companies which owe the money. As a result, they will still find it difficult to take out loans to resume business activities," said Dr. Cung.
Dr. To Anh Duong, from the Vietnam Institute of Economics, agreed, saying that after one year, the restructuring policy has proved not to be comprehensive enough, while the banking system is looking at a continued liquidity crisis.
"Exactly how much that needs to be spent on restructuring the financial system remains unclear, but it will inevitably be a very large amount. The burden will ultimately lie on the State Bank of Vietnam to provide the capital, but at the same time not even the Ministry of Finance has estimates," Dr. Duong pointed out.
Tighter control over state-owned enterprises
Dr. Tran Du Lich said that the investment in non-core investments made by state-owned enterprises over the past few years has proven to be a huge waste.
He added that the government should no longer offer credit guarantees for state-owned enterprises. This, he said, would force them to apply for loans from commercial banks and adhere to the free market system. All state-owned enterprises should be required to have their portfolios listed publicly, just as listed private companies", he said.
He also suggested that a ministry-level agency be set up under direction of the National Assembly to manage and monitor state capital.