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Ensuring macroeconomic stability key to sustain development, says CG meeting participants

June 9, 2011

Ha Tinh, June 9, 2011 - The one-day Mid-year Consultative Group (CG) meeting for Vietnam, held in Ha Tinh and presided by Vietnam’s Deputy Prime Minister Nguyen Sinh Hung, undertook a thorough discussion and assessment of Government’s Resolution 11 aimed at restoring macroeconomic stability and ensuring sustained and stable growth.

At the meeting, Development Partners congratulated the Government for the initial success in implementing Resolution 11, and committed their support for its sustained implementation. The Government and Development Partners also reviewed the impacts of the macroeconomic instability on the poor and vulnerable people, as well as small and medium enterprises, and discussed measures to protect the poor from the adverse impacts. They also heard report from the Vietnam Business Forum and the Aid Effectiveness Forum held ahead of the CG meeting.

In his speech, Deputy Prime Minister Nguyen Sinh Hung affirmed that maintaining macroeconomic stability and ensuring social safety net are long term goals of the Government. In the near future, the Government is determined to sustain the implementation of the solutions outlined in Resolution 11, to reach the long term goals.

Opening the meeting, Minister of Planning and Investment Vo Hong Phuc recognized both the domestic and international challenges that Vietnam is now facing. “The Vietnamese Government has put on the top of its agenda such key objectives as inflation control, macroeconomic stabilization, and social security. The government has issued Resolution 11 with 6 solutions in order to implement these objectives. It is also guiding ministries and agencies to implement these solutions in a synchronous and timely manner, and the solutions are now bringing about effects, increasing the confidence of people and the international community inside and outside the country.”


Development Partners and the Government discussed at length the implementation of Resolution 11 and its impacts so far, as well as how to ensure its lasting effect on the economy. While recognizing the initial progress, Development Partners also encouraged the Government pays more attention to the ‘structural origins’ of instability including sound fiscal policy and improve communication and disclosure of economic data and information.

Regarding the implementation of Resolution 11, the IMF’s Senior Resident Representative Mr. Benedict Bingham noted that “while there has been some initial success, confidence in the overall success of the strategy remains fragile”. He added that “to bolster confidence, the government will need to send a strong signal that Resolution 11 will be sustained beyond 2011 and set concrete targets for the restoration and maintenance of macroeconomic stability over the medium term.”

Cautioning against the premature withdrawal of Resolution 11, Mr. Alastair Cox, Ambassador of Australia, on behalf of the development partners’ community, said: “Development Partners welcome Resolution 11 and the Government’s strong commitment to its full implementation to restore and sustain market confidence. This may, however, take time, well into 2012. We remain concerned that Vietnam will continue to suffer recurrent bouts of macro-economic instability unless significant reforms are implemented.

Expressing his confidence that Vietnam will be able to weather the current problems, Mr. Ayumi Konishi, ADB Country Director for Vietnam, said: “we know Vietnam is fully aware of the fundamental structural issues as Social Economic Development Strategy 2011-2020 approved by the National Party Congress in January this year clearly recognized the challenges under the three “breakthroughs” to reform economic institutions, improve human skills and address infrastructure bottlenecks.”


According to Development Partners, having poverty reduction and social protection policies, programs and mechanisms in place is vital to ensure that immediate social protection and assistance to the poor is available when crises occur. However, periods of macro-economic instability and high inflation have tended to highlight shortcomings in the social protection response in Vietnam.

Greater flexibility is required to ensure that new and emerging forms of vulnerability can be addressed and emerging groups of poor and/or vulnerable people - such as urban poor, people living with HIV, people with disabilities, migrant workers and informal sector workers are able to access social assistance and support. Social protection services, including childcare support, are also important so that women can access formal employment opportunities,” Mr. Bruce Campbell, United Nations Resident Coordinator A.I. delivered the message to the Government on behalf of the Development Partners.

We welcomed the Government’s efforts to strengthen social protection, unemployment insurance and emergency assistance to the poorest households,” said EU Ambassador to Vietnam Sean Doyle. “We wish the government every success in these efforts and particularly encourage it to channel the aid as well as possible to the poorest people, who really need it. We confirm our support to the Government in this most important task.”

Development partners have welcomed Vietnam’s progress in cost-effective approaches to preventing the spread and treatment of HIV-AIDS, like the use of methadone to help drug users off their addiction. “In future, we hope these approaches will be expanded as they will reduce costs and free resources for other key social priorities,” said Australian Ambassador Alastair Cox, on behalf of informal Ambassadors’ group on HIV/AIDS.

Ms. Heather Riddell, New Zealand Ambassador, representing the Group of Four (Switzerland, Canada, New Zealand and Norway), acknowledged the progress the government has made in helping ethnic minorities, and added: “The group urged the Government to continue to ensure that ethnic minority communities are fully consulted in order to benefit from policies developed to address inequalities and to make such communities more economically self-sufficient.” They also urged the government to continue to provide access to enable the international community to better understand challenges and the work that is underway to address those challenges.


The meeting participants heard report from the Anti-Corruption Dialogue held ahead of the CG meeting on extractive industry and the importance of ensuring transparency and accountability to make sure that Vietnam’s natural resources benefits its citizens. Report from the Anti-Corruption Dialogue showed that corruption risks are identified along all stages in the Extractive Industry Sector, and substantial revenues are being lost, which otherwise could be invested in the welfare of the Vietnamese people.

Ms. Marie Ottosson, Minister, Deputy Head of Mission, Head of Development Cooperation Section of the Embassy of Sweden stressed that “the time has truly come to translate words into actions. The time has come for Vietnam to speed up the commitment of fighting corruption. One step could be to sign up for Extractive Industry Transparency Initiative; a powerful tool for ensuring transparency and accountability.”

In the concluding speech, Ms. Victoria Kwakwa, Country Director of the World Bank in Vietnam highlighted the importance of ensuring the macroeconomic stability, which is key to sustainable development, especially from the perspective of the poor and disadvantaged people. She hoped that the new Cabinet, to be in place in few months, will take on board these priorities and strengthen the partnership and effectiveness of collaborative dialogue with development partners in support of Vietnam’s development.

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