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“In four years 2005-08, we have issued 17,000 legal documents, half of which are guiding documents. The amount is just equivalent to 18 years ago! It reflects the backward of policy in the pace of market development. If such institution is unchanged, things will be left behind market development. And in such case, the State has to build up more administrative measures to interfere the market,” said Ph.D. Nguyen Dinh Cung.

Necessary being of sound mind

He appreciated the fast and various development of the market but was straight forward in claiming that “State’s awareness and reflection may on catch up”. That was the reason explaining why some many policies granted ineffectively.

“We should concentrate on micro policies and the enhancement of micro policies will strengthen macro policies. Protectionism and subsidiary policies should be let out. Such changes will offer new prospective of good inflation and balance the macro scale,” suggested Mr. Cung. Assoc. Pro. Ph.D. Tran Dinh Thien concluded that economic crisis period in Vietnam is every 10 years while the price is paid for too much concentration on growth targets.As for Ph.D. Bui Quang Tuan, economic crisis has influenced thinking of model and philosophy of modern economics. Many have claimed that “failure of free market” and the interference of governments were the reasons for crisis. “It was a wrong and one-side view point. Vietnam has the underdeveloped market which can not be blamed,” he said.]

Exports are more profitable, imports are more expensive if foreign currency price is increased.

Meanwhile, Ph.D. Vo Tri Thanh has recommended considering management by rules and management by situations. “Do not change side so soon,” he said.

In other view point, Ph.D. Vu Dinh Anh believes that State’s interference is for the best operation of market. However, he admits that the capitalism will recover itself better than other models. Besides, due to lack of market understanding, the administrative authority has to interfere by administrative measures.

Exchange rates headache

Fiscal and monetary policies are hard to be agreed upon when the US dollar has dominated which is favorable condition for financial speculation, said Ph.D. Vo Thanh Tri. Too much application of administrative measures in the past two years has caused increasing imbalance of the economy.

Assoc. Pro. Ph.D. Tran Dinh Thien said that economic growth targets should not be prioritized at all cost, inflation and macro balance should count. He stressed for more care of rate exchange between US dollar and the Yuan in the spotlight of global economic disturbance.

Economists think that in floating of rate, the exchange depends on previous trade balance while it is a factor to adjust trade balance in general relation to other capital flows.

In case of increasing importation demands, for example, the foreign currency demands increased accordingly. If the exchange rates are floated, the price of foreign currency will increase relatively to the native currency. Such price rise causes expensive importation and exportation is more profitable. As a result, excess of imports over exports will reduce at the same time with foreign currency price to balance the trade and rates.

Reported by Nguyen Cao – Translated by Vi Bao