Mr. Sanjay Kalra, Resident Representative of IMF in Vietnam. Source: IMF
(CPV) - "In 2012, the IMF will continue to support the government by providing macroeconomic policy advice. It will also continue to provide technical assistance in the areas where the IMF has expertise, including tax policy and administration, financial sector stability, monetary and exchange rate management and statistics," said Mr. Sanjay Kalra, Resident Representative of the IMF in Vietnam.
While the world's economy is undergoing many changes, the Vietnamese Government continues to implement the targets in its 11th Resolution in order to sustain rapid economic growth and macroeconomic stability, helping Vietnam attain several important achievements in the recent time.
This was shared by Mr. Sanjay Kalra, Resident Representative of the International Monetary Fund (IMF) in Vietnam, in responding to an interview by the Communist Party of Vietnam Online Newspaper.
Reporter: What are your assessments about Vietnam's economy in 2011?
Mr. Sanjay Kalra: In 2011, many factors contributed to macroeconomic instability. These difficulties took the form of downward pressures on the dong, high inflation, and weak confidence in the banking system. Inflation peaked at over 20 percent around mid-year and continued in the high double digits for the remainder of the year.
The State Bank of Vietnam had to cope with a difficult situation in several markets, including the foreign exchange, interbank, and credit markets. Several banks, especially those that had imbalances in their balance sheets, faced intense liquidity pressures.
Recognizing these difficulties, the Government of Vietnam adopted and implemented Resolution 11. As part of this, monetary policy was tightened, the fiscal deficit was reduced, and the first steps to safeguard financial system stability were taken.
Reporter: In 2011, despite many difficulties, Vietnam received assistance worth USD 7.9 billion. In your opinion, what is the reason for the trust shown in Vietnam with such an amount of money given?
Mr. Sanjay Kalra: Vietnam has a strong potential for development over the medium and long term, with a young and hard-working labour force, low labour costs, political stability, and a favourable geographic location. These are strong foundations for the country’s future growth. The international community has pledged to help Vietnam overcome temporary challenges to continue on its path to achieve growth and sustainable development.
Reporter: In the context of difficulties, in 2012 the Vietnamese Government is still determined to achieve high growth. How do you assess Vietnam's economic prospects in 2012?
Mr. Sanjay Kalra: 2012 will be a challenging year for Vietnam. The Government of Vietnam wishes to regain macroeconomic stability and achieve single-digit inflation while maintaining growth at 6-6½ percent. This will require that the government remains steadfast in its determination to advance its reform agenda. These tasks will no doubt be difficult, given that the global economic outlook has been worsening. Domestically, the public expects the government to make progress on its reform agenda regarding the public investment, banking and SOE sectors.
Reporter: In 2011, the IMF was active in assisting Vietnam's economic development. In 2012, what specific activities will the IMF conduct to support Vietnam's economy?
Mr. Sanjay Kalra: In 2012, the IMF will continue to support the government by providing macroeconomic policy advice. It will also continue to provide technical assistance in the areas where the IMF has expertise, including tax policy and administration, financial sector stability, monetary and exchange rate management and statistics.
As you may know, Vietnam has volunteered to participate in the Financial Stability Assessment Program (FSAP) of the IMF and World Bank, and the IMF stands ready to assist the Government of Vietnam in participating in this initiative. Finally, we will also continue to support capacity building through training courses at IMF institutes, as well as workshops and seminars in Vietnam.
Reporter: As a Resident Representative of the IMF, do you have any proposals for our Government on the management and operation of the economy?
Mr. Sanjay Kalra: In the current economic conditions, the Government should act quickly and decisively. The government’s efforts to restore macro stability are welcome. But more remains to be accomplished: confidence in the dong and the banking system remains fragile, and external fiscal and financial buffers are still low. Maintaining a tight macroeconomic policy stance is critical. The financial sector needs to be strengthened rapidly through the implementation of bold, clearly communicated measures. We also welcome the government’s program to raise efficiency and growth through structural reforms.
Reporter: Thank you very much./.