According to the report--economic growth in the first quarter of 2012 was only four percent, compared to 5.84 percent of the same period of last year. The industrial and construction industry grew by only 2.94 percent.
Tightening financial and monetary policies have helped contain inflation and stabilized the macro-economy, but is also challenging businesses, especially small- and medium-sized ones.
High loan interest rates, difficult access to capital, rising input costs, and low consumption have led to a fall in production and even dissolution of businesses, making it difficult for social stabilization and improvement of people’s living conditions.
In the January-April period of 2012, more than 17,700 businesses have been dissolved or temporarily stopped operating, representing an increase of 9.5 percent against the same period last year.
The growing bad debts and the shrinking imports of materials are other negative factors that will affect investment in production, especially for exports in the coming months.
The report also mentioned other challenges such as smuggling and trade fraudulence of counterfeit and low-quality goods, which have violated businesses’ and consumers’ legitimate rights and caused a huge loss to the State budget collection.
In the meantime, social order and security remains complicated in some areas with the growth of social evils and crimes, especially organized crime, threatening people’s living conditions.
The ineffective prevention of corruption and waste has provoked mass protests, especially over land use, while the failure to control food hygiene, improve the quality of hydro-electric power plants, and reduce traffic accidents and jams in big cities remains challenging to boot.
However, Vietnam achieved most of the targets laid down in the 2011 plan for socio-economic development.
GDP growth was maintained at 5.89 percent to contain inflation and ensure money supply, credit growth and international payment balance.
State budget revenue increased by 18.4 percent but its spending was 13.8 percent higher than expected. So, budget overspending stayed at VND115,500 billion, or 4.4 percent of GDP (0.9 percent lower than planned). Public debts, government debts and foreign debts remained at safe level.
The country’s export turnover in 2011 hit US$96.9 billion, up 34.2 percent against last year and its trade deficit dropped to US$9.84 billion (or 10.16 percent of export revenue) – the lowest on record.
Social welfare continued improving along with the strengthening of national defense and security, as well as external relations.
Promoting production, trade and investment while continuing to curb inflation, macro-economic stabilization was highlighted by the Deputy PM as the Government's measures to step up the country's stable development.
The Government would restructure and renovate current development models by increasing the efficiency and competitive edge of the economy, he said.
Social security and welfare would be further improved while environment protection would be promoted, he added.
Synchronizing the legal system, streamlining administration reform, improving State management and promoting the fight against corruption and wastefulness were included in the Government's major task in the coming time.
Enhancing national and social security, improving international relations, and promoting information dissemination to create social consensus were among the Government's to-do list.
In the 1,200 opinions sent to the NA, many voters expressed their concerns over the economic problems, widening social gap, food safety and social crimes, according to Vietnam Fatherland Front Central Committee President Huynh Dam.
On the afternoon, Minister of Planning and Investment, Bui Quang Vinh, presented the general economic restructuring plan.
The plan aligned renovations of the growth model with improving quality, efficiency and competitiveness of the economy, Minister Vinh said.
Most lawmakers agreed that it was essential to restructure the economy as it has recently reflected weaknesses, including slowing economic growth, high inflation, high overseas and public debts, and bad debt on commercial loans.
"The plan's target is to improve the efficiency of financial resources in the economy, raise productivity, and sharpen the competitive edge of the economy," Mr. Vinh said.
The restructuring process will be split into two phases: short-term (five years) and long-term. In the five-year period, Vietnam will focus on restructuring public investment, commercial banks and financial institutes, and State-owned groups and corporations.
For a long-term view, the country will restructure manufacturing and services, bolster enterprise renovation, accelerate added-value of local products, and gradually increase competitiveness of products, enterprises and finally the economy.
The restructuring aims to raise the ratio of manufacturing and decrease the proportion of agriculture.
Under the plan, some industries and products would be given priority to make full use of competitive advantages.
The scheme maps out 12 basic solutions to realize the final targets, especially the completion of a market-oriented economy, renovations in investment mechanisms to attract foreign and local enterprises to priority sectors, improvements to human resource quality, and the development of sciences and technologies to bolster competitiveness of the economy.
Nguyen Van Giau, chairman of the NA Economic Committee said that besides the above-mentioned priority services, the Government should consider bolstering the development of e-commerce, soft services, construction and financial services.
"There was not a good connection between basic solutions and a dearth of solutions for social and environmental issues," he added.
Thus, most members of the economic committee agreed to add social and environmental solutions to the plan to ensure the sustainable development of the economy.
To restructure State-owned enterprises (SOEs), the economic committee recommended building up a transparent management regime to ensure that they use the financial resources effectively, publish information and financial reports periodically, and compete fairly.
"SOEs should target fields that other economic sectors don't have enough financial capacity or experience to exploit modern industries with high added values," he said.
For private companies, the restructuring should focus on raising corporate governance capacity, increase transparency of business activities and financial reports, raise capital on the stock market and reduce the great dependence on public investment and commercial loans, he said.