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Deputy PM urges firms to boost exports to cut deficit   2008-07-10 - VNS

Mr. Hoang Trung Hai
Deputy Prime Minister Hoang Trung Hai called on all economic sectors to strive for export growth of 28 per cent for the whole year in order to maintain the trade deficit at US$700 million per month in the second half of this year.

Hai made his remarks at an online conference in Ha Noi yesterday organised by the Ministry of Industry and Trade that was attended by ministers, senior city and provincial officials, and business representatives.

"It will be rather difficult for the country to keep its trade deficit at $700 million per month, as the monthly deficit has already climbed to $3 billion in the first few months of this year before gradually decreasing to $1.3 billion later on in the first half [of the year]," said Hai.

The targeted export growth of 28 per cent will also be a challenge, as estimates predict 22 per cent.

"Despite impediments, we still have to take more control and make a determined effort to realise the target," he said, adding: "We have to do our best to keep the trade deficit for the whole year below $20 billion."

The current economic crunch requires close co-ordination between the Government, ministries and businesses to resolve bottlenecks so that enterprises can boost production and exports and ensure payments are balanced to stabilise the macro-economy and curb inflation, said Hai.

Delegates called on the power sector to improve supplies in order to produce enough electricity for manufacturers. To offset losses caused by power cuts, business leaders said they needed advanced notice of planned disruptions to the electricity supply.

The Deputy Prime Minister urged EVN (Electricity of Viet Nam) – the country’s main power producer – and PetroVietnam to make great efforts to guarantee steady power supplies both for business and household consumption.

The two State-owned corporations will be held accountable for all power shortages whatever the reason, warned Hai.

Hai said PetroVietnam must churn out at least 16 million tonnes of crude oil this year to raise exports.

PetroVietnam’s crude exports typically account for nearly 20 per cent of the country’s total export turnover and make up around 30 per cent of the nation’s GDP.

He emphasised that in the second half this year, State agencies would have to deal with enterprises’ problems quickly and efficiently to help them boost production and stabilise the macro economy.

Business petitions

At the conference, many delegates outlined the difficulties they were experiencing and called on the Government to issue policies that would assist them to stabilise production.

Many of the difficulties experienced by businesses involved rising costs as a result of having to pay inflationary wage rises, higher prices for equipment, transport and materials, and higher interest rates for commercial loans.

Almost every firm is experiencing problems, the conference heard.

Some groups and corporations urged the Government to extend the deadline for paying corporate income tax by six or even 12 months to offset rising costs and a shortage of capital.

Director General of the Viet Nam National Textile and Garment Group (Vinatex) Vu Duc Giang asked the Government to finalise its trade agreement with Japan to boost exports of locally manufactured garments.

In addition, Giang requested customs offices to streamline administrative procedures as foreign importers, notably from the US firms, usually require delivery within 20-25 days. He said it took between three to four days for goods to clear customs in Viet Nam.

Giang also asked the Government to waive import tariffs for fibre from the current 3 per cent and to remove VAT on imported materials.

Tran Xuan Hoa, director general of Viet Nam National Coa and Mineral Industries Group, said it was struggling under the burden of not being able to raise prices as ordered by the Government.

Director general of Petroleum Import Export Corporation (Petrolimex) Bui Ngoc Bao said he expected the oil price to average out at $145 per barrel in the second half of the year, as opposed to around $111 per barrel in the first six months.

Oil imports in the first half of the year were worth about $3.3 billion. The price was expected to rise by 30 per cent in the second half, which meant Petrolimex would have to spend an additional $990 million to import the same volume of oil, said Bao.

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