Vietnam's economy will face a lot of difficulties in the coming time if the government fails to take drastic and effective measures, experts expressed their concerns at the 2013 Spring Economic Forum on Friday in Khanh Hoa, adding even the restructuring plan must be restructured as it proves ineffective.

The two-day forum is held by the National Assembly’s Economic Committee in order to propose practical resolutions for the national economy in the coming year. All suggestions and proposals will be selected for submission to the NA.

“The restructuring must be revised as the more we implement it, the worse the situation becomes,” said Cao Sy Kiem, former governor of the State Bank of Vietnam.

Sharing his view, Dr. Tran Du Lich said the restructuring must be implemented by three-year phase rather than five years.

“We may fail to make it if we keep sticking to the five-year procedure,” he told the forum.

Professor Nguyen Hong Son, headmaster of the Hanoi Economics University, said the restructuring plan had been developed in a reversed process.

“We have developed the plan to restructure the economy before similar plans are specifically made for each sectors such as banking, public investment, and state-owned enterprises,” said Son, who holds a Ph.D.

Doctor Nguyen Dinh Cung, deputy head of the Central Institute for Economic Management, also said the privitalization of the pubic companies have been slowly processed, adding that all solutions proposed will not be able to solve the root of the problems.

“The resolutions seem intended only for several interest groups rather than the economy,” he said.

No drastic

Dr. Tran Dinh Thien, head of the Vietnam Economic Institute, said although the discussions at the economic forums are always full of words like “serious” and “drastic”, the real ongoing restructuring does not reflect that spirit.

“Policymakers and economic experts always say ‘crisis is a chance for restructuring’, this sounds more like an encouraging motto than a call for action,” commented Dr. Thien.

In 2012 Vietnam’s economy grew at the slowest pace over the last 13 years, while bad debts rose 64 percent year on year and the figures continue on the rise, he said.

“What I deem the worst is that there are so many businesses going bankrupt,” he said.

The number of businesses shutting down operation in the last two years and Q1/2013 is now equal to the number of newly-established firms, which Thien said “will be a record figure.”

While the central bank has repeatedly ordered banks to cut deposit interest rates in a bid to lower lending rates, the lending rates are in fact not slashed in according to the deposit ones, he said.

“Consequently, many businesses have fallen into a tough spot with capital shortage, while banks insist on protecting their interest and refused to cut lending rates,” he elaborated.

Meanwhile, Dr. Cung said there are two other words that have been commonly used over the past time, which are “charge” and “penalize.”

“Imposing too many financial penalties will create risk of a high-cost economy, and thus reduces its competitiveness,” he warned.