Vietnam, one of Asia’s most dynamic economies in the past two decades, says it will not be deterred by the US slowdown.
It plans to maintain strong growth in exports and the overall economy this year by focusing on the Middle East and Africa.
Nguyen Tan Dung, prime minister, said Vietnam’s communist government was intent on maintaining its target of 8 per cent to 9 per cent for annual growth in gross domestic product. It also planned to boost the value of exports by 20 per cent this year. In the first two months, the increase was 30 per cent, Mr Dung said in an interview with the Financial Times.
Hanoi intended to compensate for the US slowdown and reach growth targets by encouraging robust investment by domestic companies, foreign enterprises and state enterprises, he said.
Some economists have expressed concerns that such investments, particularly by state companies, stoke inflationary pressures.
Conditions were favourable to increase exports “not only to the US, the EU, Japan and China but also to the large markets of the Middle Eastern countries and African countries”, Mr Dung said, now that Vietnam was a full member of the World Trade Organisation.
“Our strategy is diversifying the markets.”
Vietnam’s plans to maintain growth reflect a pan-Asian consensus on the need to “decouple” from the US economy by reducing dependence on its large but slowing market. In 2007 the US accounted for more than $10bn, or a fifth, of Vietnam’s exports.
Asia-US container traffic has slowed sharply from mid-2007 and rose as little as 2 per cent last year from 2006, according to Mark Page, research director at Drewry Shipping, a consultancy in London. Container trade between Asia and Europe, north Africa and the Middle East rose about 20 per cent last year.
Mr Dung was speaking ahead of a trip to the UK, Germany and Ireland that starts on Monday.
He acknowledged that Vietnam, in common with other Asian economies, faced conflicting aims in trying to promote continued growth while fighting a surge in inflation.
Inflation is particularly severe in Vietnam as a result of increased prices for food and housing. It rose to 15.7 per cent in February.
Mr Dung criticised “shortcomings” in the management of monetary policy last year. The authorities aimed to reduce inflation to 12 per cent by the end of the year by limiting the growth of money supply and credit.
Since the Communist party of Vietnam moved away from Soviet-style economics with the launch of the “doi moi” [renovation] policy 22 years ago, the once poverty-stricken country has developed rapidly. Vietnam attracts high-tech foreign investors such as Intel and other businesses seeking to reduce costs and lower dependence on manufacturing in China.
Mr Dung, 58, a former army major, fought against US forces in his own country and against the Khmer Rouge in neighbouring Cambodia and was wounded four times.
He would not be drawn into a discussion on the prospects for political reform in authoritarian Vietnam.
“We have turned Vietnam into a law-governed state and a state for the people, by the people and of the people,” he said.