Mr. Van Trong Ly, Co Chair and Vice Chairman, Office of Government
Mr. Vu Khoan, former Deputy Prime Minister
Mr. Nguyen Van Binh, Deputy Governor, State Bank of Vietnam
Ladies and Gentlemen
A very good morning to you all.
I join Vice Chairman Van Trong Ly in welcoming all of you to the workshop.
Mr Ly, I want to thank you and the OOG for organizing this important workshop jointly with us. We are delighted to have you with us for this morning given your heavy schedule. We hope that you find your interaction with us during this workshop beneficial.
Let me begin by discussing the genesis of this workshop. Recently, the OOG and the World Bank have worked together on how the two institutions can cooperate in order to enhance knowledge exchange between Vietnam and rest of the world. As part of this process, it has been proposed that we will be producing a number of policy notes for the new administration. This workshop is an input to that process – we have invited colleagues from HQ to share with us how other developing countries are dealing with similar challenges facing Vietnam and how Vietnam can learn from their experience.
Mr. Vu Khoan, Deputy Governor Binh, and Vice Chairman Ly, I hope that our discussions in the workshop on macroeconomic turbulence in emerging markets and welfare impact of food price inflation will be useful to you and to the Government as you continue to confront these challenges in the months ahead.
Ladies and Gentlemen,
In the last few years, the global economy has gone through a severe financial crisis with long lasting impacts. Despite recent signs of recovery, the road ahead is bumpy with considerable uncertainties. Macroeconomic instability and its social impact have recently gained substantial interest of governments of both developed and developing countries. Preventing growth slowdown, curbing inflationary pressure and protecting the poor are among top priorities of governments, especially the developing countries.
Macroeconomic management and coping with potential adverse impact of inflation are also among the hotly debated issues in Vietnam. The country navigated the global crisis quite well, but since the second half of 2010, it has been experiencing various problems: high inflation, tensions in foreign exchange markets, and decreasing reserves. In many aspects, Vietnam’s performance seems to differ remarkably from the majority of developing countries.
Today’s first session is focused on learning from the past episodes of macroeconomic turbulence in emerging markets. Vietnam’s current macroeconomic instability is not unique – many developing countries have had similar experience in the past. What is important is that emerging markets have learnt from their past mistakes and Vietnam can learn too.
We will also discuss Resolution 11, an important policy package adopted by the Government of Vietnam to restore macroeconomic stability. We welcome the Government’s issuance and implementation of Resolution 11, which places emphasis on tightening monetary policy, together with consolidating fiscal policy and structural reform measures. While Resolution 11 has met with some initial success, its ultimate success will depend on effective implementation of all announced policies.
Another topic for discussion is the distributional impact of inflation. High and rising food prices can have significant adverse impact on the poor. As Vietnam has been experiencing a high level of inflation, understanding the movement of international prices and how they would impact different groups will be essential for the formulation of progressive and effective policies.
Let me remind the audience that this is a preparatory workshop for the policy notes. We are here to seek your views and ideas on how to make the policy notes relevant for new administration. I therefore hope we can discuss openly, honestly and constructively, allow the opportunity for real dialogue between participants, representing for various line ministries, research organizations, and development partners.
I look forward to very fruitful discussions.