Roundup: Rising public debts raise alert in Vietnam
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E-mail Xinhua, October 22, 2014
At a recent discussion on socio- economic and budget situation of the year-end session of Vietnam' s National Assembly (NA), delegates showed their concern over rising public debts, local media reported Wednesday.
Tran Hoang Ngan, member of the NA Committee for Economic Affairs, said since 2011, Vietnam's public debts have increased by 20 percent annually while gross domestic product (GDP) growth stands modestly.
"Despite being now under the set level of 65 percent of GDP, the current debt-to-GDP ratio in Vietnam remains unsafe," local Dan Tri (Knowledge for People) online newspaper quoted Ngan as assessing on Wednesday.
In 2010, public debts in Vietnam cost around 1,115 trillion Vietnamese dong (52.84 billion U.S. dollars), accounting for 51.7 percent of GDP.
The figure rose to over 1,900 trillion Vietnamese dong (90.05 billion U.S. dollars) in 2013, while it is expected to hit nearly 2,400 trillion Vietnamese dong (113.74 billion U.S. dollars) in 2014 and 2,900 trillion Vietnamese dong (137.44 billion U.S. dollars) in 2015, making up over 64 percent of Vietnam's GDP, reported Dan Tri.
Sharing the same view with Ngan, many NA deputies affirmed that the most important task of 2015 is to pay debts amid rapid increase of public debts in both scale and speed.
"It is imperative that public debts be reduced," Do Van Duong, member of NA Judiciary Committee, said at the discussion, adding that "Hiking public debts poses a serious risk to the country's financial security."
Duong pointed out three main reasons that cause public debts to bounce up over the past time including enormous but ineffective administrative apparatus, corruption and leaks in legal system.
Echoing Duong, Huynh Nghia, an NA deputy, said public debts keep increasing year by year and raise an alarming bell in 2014.
Explaining the country's public debts situation and ways to pay debts in the coming years, Vu Van Ninh, Vietnamese deputy Prime Minister, said that the issuance of government bonds during 2011- 2015 period for transport infrastructure development has made public debts go up.
The official argued that debt-to-GDP is an important index, while the ability to pay debts is a more important index.
According to Ninh, the pressure of foreign debt is less than that of domestic one as on average, foreign debt has low interest rate of 1.6 percent per year in a long term of 10-20 years.
Meanwhile, domestic loans suffer from market interest rates and their terms last for three to four years, or even one-year-term. In 2013, one-year-term loans make up 22.7 percent of the total domestic debts, which poses great pressure for the country to pay debts, said Ninh.
The official said despite rising fast over the past years, local people should be patient as these loans are crucial to the country's development demand. "Restructuring the economy, investment and finding out how to effectively use money is a must now," said Ninh. Endi
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