Cargo for export at Tien Sa seaport in the central city of Da Nang. Government leaders were questioned on plans to reduce the nation’s trade deficit at a recent National Assembly question and answer session. — VNA/VNS Photo Vu Cong Dien

HA NOI — The Government will require more time before it can successfully reduce inflation.

The Prime Minister Nguyen Tan Dung made the statement on Saturday at a question-answer session during the National Assembly (NA) meeting.

The Government had acted to curb inflation and slow price hikes in an attempt to bring the inflation rate down to a one digit figure in the next few years, the PM said.

Regarding the revision of the economic growth target from 8.5-9 per cent to 7 per cent this year, the PM said, It is a necessary move that is appropriate with current requirements.

He also said the growth rate was similar to the level forecast by several economic organisations.

During the session, the PM also responded to queries about the streamlining of investment projects, reducing the trade deficit, regulating prices, ensuring food security and improving living conditions.

PM Dung also analysed eight groups of issue under discussion by the NA.

He said the Government was determined to postpone projects eligible for Government bonds but that had not yet finished regulated investment procedures.

The Government, therefore, intends to cut more than VND9,000 billion (US$563 million) by delaying these projects.

It has also approved a plan to save VND2,700 billion ($169 million) on regular spending from the State budget this year.

Regarding the operation of economic corporations and State companies, the PM stressed that the Government would closely monitor these key economic groups and their investment in the stock market, banking and real estate.

The country has eight economic groups and 96 State corporations.

Dung told NA deputies that total investment capital contributed by State enterprises in the three areas above was no higher than the capital and total property value owned by the businesses themselves.

The PM also said that exports needed to be increased and imports closely controlled to help curb the deficit.

The country aims to reduce the trade deficit to last year’s figure of about 30 per cent.

He said the Government would not readjust the price of key commodities like oil, gas, coal, electricity and freight until the end of June this year.

The Government does not intend to increase the price of these commodities all at once after June, the PM asserted.

Salary adjustments were also under consideration as was the number of people eligible for social welfare policies.

The Government understands what people are going through and is increasingly aware of its responsibility in curbing inflation, PM Dung said.

PM Dung admitted the Government’s shortcomings in guidance and management and pledged to do his best to achieve targets set by the NA. He said the NA’s agreement with the Government’s report left the Government confident and determined to continue its implementation of the set tasks and solutions.

Ministers take the floor

Earlier ministers of Industry and Trade, Labour, Invalids and Social Affairs also discussed measures to reduce the trade deficit and help the poor, at the session.

Minister of Industry and Trade Vu Huy Hoang said the import surplus this year could be reduced to 30 per cent, equivalent to the rate recorded in 2007.

The minister explained that the sudden surge in import surplus this year was due to higher demand for raw material and machinery imports at a time when prices of those products were soaring on the world market.

He added, however, that the root of the problem lay with slow economic restructuring as well as underdeveloped supportive industries and material production.

The first five months of 2008 saw the import surplus rising sharply to the equivalent of 61.6 per cent of the nation’s export earnings.

Minister Hoang said immediate solutions to narrow the trade deficit included reinforcing the screening and management of investment projects, especially those using the State budget, to reduce the unnecessary import of machinery and raw materials.

He stressed that his ministry would work to develop raw material production and replace imports. High value-added products would also be targeted.

If those measures are implemented uniformly, exports can grow at 25 per cent, higher than the set 22 per cent target, and the ratio of the trade deficit can be narrowed to 30 per cent for this year, the minister affirmed.

Regarding the sudden surging prices of rice, the minister admitted that management agencies were lax in their duties and that the distribution network was problematic.

He told the lawmakers that his ministry would tighten the management of rice resources and take drastic measures to combat speculation.

The Minister of Industry and Trade also fielded questions about the supply of electricity and essential commodities.

The Minister of Labour, Invalids and Social Affairs (MoLISA) said strong social welfare solutions would be implemented to help stabilise the lives of low-income earners.

MoLISA Minister Nguyen Thi Kim Ngan told the National Assembly deputies at the question and answer session that around 13 million people receiving salaries or social welfare benefits from the State were seriously affected by rising prices. This did not include another 13 million poor and tens of millions of others living near the poverty line, including ethnic minority people.

Ngan said her ministry would study the impacts of the price hike on public employees and social welfare beneficiaries, especially the low-income group, with the aim of readjusting minimum wage, pensions and subsidies.

Regarding employment and labour issues, she said that her ministry would establish a national labour market information and forecasting centre to help create a vocational training strategy that would ensure a stable supply of quality workers on the market.

Responding to deputy concerns about the effects of rampant strikes on the investment environment, Minister Ngan said MoLISA would apply strict punishments to businesses and workers breaking labour laws.

To address the strike issue, the ministry would push for the signing of collective labour deals, devise a housing programme for low-income earners, consider wage reform and develop trade unions in non-State and foreign-invested businesses, said Ngan. At present, a national labour relations committee had been established to provide Government consultations on the strike settlement, she added.

During the session, Minister Ngan also answered questions on social insurance and social evil prevention and control. — VNS