Economic growth has failed to secure higher quality of life in Vietnam as the country is pursuing an imbalanced growth model, National Assembly deputies said Saturday (May 22).
Ho Chi Minh City Representative Nguyen Dang Trung said the government has failed to achieve the four goals regarding environment protection that the National Assembly previously set.
"Leaving the environment like this is going against policies for a sustainable economy," Trung said, calling for immediate action to eliminate environmental risks.
Taiwanese MSG maker Vedan, for example, is responsible for the pollution of the Thi Vai River and has paid compensation, but the damage is long term, he said. "So what is the point of economic growth?"
"Our lives have been improved economically, but the quality of life doesn't increase," he said.
Trung also noted that consumer prices have surged dramatically recently following consecutive power, water, coal and fuel hikes.
Although the government said price hikes have been controlled, consumers in fact are complaining about very high prices, he said.
The government has to realize that state-owned corporations have not operated efficiently, Trung said. "They account for 40 percent of total capital in the country, so if they don't run an effective business, inflation will be difficult to control."
Speaking at the National Assembly meeting Saturday, Deputy Nguyen Thi Nguyet Huong, also chairwoman of Vietnam Investment Development Group, said last year the economy expanded at its slowest pace in a decade but budget deficit stood at a high level of 6.9 percent of the country's gross domestic product, or VND119 trillion (US$6.27 billion).
Such high deficit despite an increase in budget revenue means the budget has not been managed well, she said.
Vietnam plans to boost economic growth to 6.5 percent this year from 5.3 percent in 2009.
Deputy Tran Du Lich of Ho Chi Minh City said the 6.5 percent target is within reach but the country has not solved medium and long term instability resulting from the imbalanced growth model.
Trade deficits continue to widen and the more the country exports, the more it imports, said Lich, a senior economist. "In order to raise pigs the country already has to import a huge amount of animal feed, not to mention many other expensive products and materials."
Lich said the Vietnamese economy depends too much on foreign investment and overseas remittances, which means it doesn't have internal strength.
This is a cause of economic instability that needs to be eliminated, he said.