Vietnam to push reforms at SOEs, banks in 2012: official

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Vietnam will focus on restructuring state-owned enterprises and commercial banks in 2012 as the country aims to restore economic stability, a government official said.

The government will review and assess the efficiency of state companies and look into the huge losses that some of them have made, said Minister of Planning and Investment Bui Quang Vinh.

Reform of the banking system will also be speeded up next year, he said, adding that other financial institutions, including insurance and securities companies, will be restructured as well.

Vinh told members of the National Assembly's Standing Committee at a meeting Saturday that the priority for the government in 2012 would be keeping the economy stable and maintaining growth at a reasonable level.

His ministry projected economic growth of 6-6.5 percent next year, and set an inflation target of under 10 percent.

Vinh said the government plans to go with a scenario in which the economy is expected to expand by 6 percent only.

When the world economy shows signs of recovery, the government will try to achieve a higher growth rate, he said.

The Ministry of Planning and Investment also aims to keep the country's budget deficit at 4.8 percent of gross domestic product in 2012. The government will continue to cut back investment and delay projects that are not really necessary, Vinh was quoted by Tuoi Tre newspaper as saying.

At Saturday's meeting, legislators said the government needs to try and achieve the goals it has targeted.

Truong Thi Mai, chairwoman of the National Assembly Committee of Social Affairs, said inflation targets were set particularly low over the past few years, and they were all missed.

"This year the government originally aimed to keep inflation under 7 percent but now the Ministry of Planning and Investment says it will not be under 18 percent," Mai said.

If the consumer price index continues to rise at such a fast pace, other social development and poverty reduction targets will be badly affected, she said.

Phan Trung Ly, chairman of the Legal Committee, said over the past years the government introduced plans to restructure the economy, but many problems stayed unsolved, including a large trade deficit and low capital productivity.

"If there is no breakthrough and things just stay like this, it will be really dangerous," Ly said.

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