Socialist Republic of Vietnam

Vietnam succeeded in keeping inflation at 2.9% in the first half of this year, the government reported at its regular meeting in Hanoi on July 21.

Meanwhile, the banking system was able to mobilise enough capital for supply to key projects and for development of production and trade.

The government attributed these achievements to its correct monetary policies and efforts to strengthen the banking sector.

Strengthening and renovating the operation of the system of commercial banks and credit organisations continue to be the goal of the banking sector in the remainder of the year and in the period until 2005.

The move, the government said, aims to raise the banking sector's competitiveness and to well integrate itself into the regional and global economies.

Also at the final session of the government, tenth tenure, chaired by Prime Minister Phan Van Khai and his deputies Nguyen Tan Dung, Nguyen Manh Cam, Nguyen Cong Tan and Pham Gia Khiem, cabinet members heard a report on a plan to set up Finance Investment Companies. The report was presented by Finance Minister Nguyen Sinh Hung.

The cabinet affirmed the necessity of establishing such companies as they help renew the management mechanism of State capital in businesses in conformity with the operation of a market economy. Under the proposed plan, State-owned businesses will have greater leeway in making their own business decisions and be more responsible financially.

The government assigned the Finance Ministry to co-ordinate with relevant agencies to continue completing the plan as well as map out a pilot scheme in this regard to be submitted to the new government for approval.

For the immediate future, the government will focus its efforts on reducing the production cost (including input and intermediate costs), raise the competitive edge of Vietnam-made products in the domestic and foreign markets, promote exports, actively prevent natural disasters, reduce traffic accidents and eliminate commercial frauds.

Addressing the closing session, Prime Minister Khai said that, during the 1997-2002 tenure, the government has spared no effort to make full use of internal strengths and external resources in order to overcome the challenges arising from the 1997 regional financial-monetary crisis.

As a result, domestic investment showed an average increase of 10% annually, helping make up for a sharp decline in foreign investment (25% per year on average). In the period under review, there was no decline in the official development assistance for Vietnam pledged by foreign donors at their annual consultative meetings.

Accordingly, Prime Minister Khai added, Vietnam's economic growth remained high, positive changes were seen in its economic restructuring and remarkable progress was made in the national poverty reduction programme, thus contributing to improving people's material and spiritual lives and ensuring political stability, national defence and public security.

However, Prime Minister Khai also pointed to two major tasks the government should perform with a strong determination in the next tenure. These, he stressed, are how to raise the efficiency and competitiveness of the national economy, and promote administrative reform, making Vietnam's administrative system stronger and healthier. (VNA)