Vietnam Must Try to Avoid the Too-Big-To-Fail Scenario, Economist Says

Diep Nguyen

10:36 02/01/2019

BizLIVE -

The biggest risk of Vietnam economy in 2019 lies with the biggest Vietnamese companies. The Vietnam economy is more fragile than the general expectation.

Vietnam Must Try to Avoid the Too-Big-To-Fail Scenario, Economist Says

Photo: Independent

According to Prime Minister Nguyen Xuan Phuc in one most recent nation speech, Vietnam economy in 2019 will enter the new period when both the internal and external factors change unpredictably. There will be chances mixed with challenges.
The world economy is expected to slow down, the risks of trade wars, exchange rate fluctuations, financial markets and currency are getting higher. In other words, the new security risks arise, the 4.0 industrial revolution affects Vietnam in many aspects.
From inside, Vietnam economy still has many weak points. In which, Prime Minister Nguyen Xuan Phuc stressed on the need to improve the development quality, the low productivity and competitiveness.
However, 2019 can be considered to be a special year. The government and the National Assembly set the target that 2019 will be the year to speed up economic growth to earn the highest achievement.
According to the Circular 01 from the government, the government set out the target of economic growth of 6.8% and this is the highest in the band of 6.6% to 6.8% set out by the National Assembly.
In the opinion of economist Huynh The Du, the biggest risk of Vietnam economy in 2019 lies with the biggest Vietnamese companies. The Vietnam economy is more fragile than the general expectation.
In the bad case when just one or two big companies gets into troubles, the whole economy will be affected. Thus one of the key thing is the supervising agencies must pay serious attention to those companies.
Looking back over the past four decades, the 1979 crisis happened when the state did not allow the private companies and the market to function smoothly. As a result, the general production stalled.
The 2009 crisis happened when the commercial banks increase cross holding; some companies turn the banks into back stages to mobilize capitals. The moral crisis became real and affected the whole economy. 
The 2009 crisis in Vietnam economy was made worse because of the collapse of Vinashin, Vinalines. Economist Huynh The Du strongly urged that the government pay serious attention to the operations of big companies in order to avoid the too-big-to-fail scenario which consumes a lot of people savings and investments.

DIEP NGUYEN