IMPACT OF FINANCIAL CRISIS ON VIETNAMS ECONOMY

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IMPACT OF FINANCIAL CRISIS ON VIETNAMS ECONOMY
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MACROECONOMIC INDICATORS (1)

• The more integrated into the world economy, the
  more Vietnams economy affected by the up and
  down in the world economy.
• GDP declines 2007 8,4 2008 6,5 2009 4,5
  - 48
• High inflation (2006 6 2007 12, 2008 23)

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MACROECONOMIC INDICATORS (2)

• VN Index was slashed by more 50.
• Increasing trade deficit.
• Unemployment is high (more than 300.000 at the
  end 2009)

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FINANCIAL CRISIS AND STABILITY

• What are the threats to peace and stability?
• Vietnam Government emphasizes on non-
  traditional security problems
• Food, energy, financial security
• Poverty
• Inequality

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GOVERNMENT MEASURES(1)

• Vietnam Government approved a stimulus program of
  6 billion.
• Stimulus measures are aimed at subsidizing/compens
  ating interest rates for enterprises.
• Develop infrastructure .

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GOVERNMENT MEASURES(2)

• Helping low income families
• Providing Financial assistance for unemployment
• Encouraging companies to look for new export
  markets

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GOVERNMENT MEASURES(3)

• Encouraging companies to buy equipment,
  machines, technology for post crisis business.
• Looking for Foreign Direct Investment.
• Stimulus program gives a positive result.
• GDP in the first quarter increased by 3,1
  exports rose by 2,4, trade deficit declined.

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WHAT SHOULD WE DO TO COPE WITH FINANCIAL CRISIS
AT REGIONAL LEVEL? Standing aside and hoping
the problem goes away is not a good idea.
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RECOMMEDATIONS(1)

• 1/ Increasing the active role of regional
  governments as a market stimulator and
  supervisor.
• 2/ Enhancing intra - trade in Asia, reducing the
  impact of the slowdown in US/EU demand on Asian
  exports.

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RECOMMEDATIONS(1)

• 3/ Reducing the dependence of Asian Economies on
  US dollar (in the context of dollar volatility)
  Multilateralization, Asian Currency Cooperation.

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RECOMMEDATIONS(1)

• 4/ Improving regional financial surveillance
  mechanisms (an early surveillance, legal
  framework, risk management skills and policy
  coordination) as well as risk pricing capacity
• 5/ Finding new channels to help enterprises to
  cope with the current drying-up of liquidity.