Participants discuss Vietnam's integration into the global financial environment.
“Integration is virtually compulsory even though it contains many risks, so the responsibility of experts is to give their opinion on overcoming the challenges and supporting the economy of their motherland,” Professor Nguyen Duc Khuong, Director of Research at the IPAG Business School in Paris, told the first-ever forum of overseas Vietnamese experts, held in Hanoi on June 7.
Professor Khuong, who was ranked 12th in Top 200 global economic experts over the last ten years by RePEc Economics Research, said that financial liberalization in Vietnam was at two levels, domestic and international, but believes the process for opening up markets is not clear.
Comparing Vietnam with the movement of global financial institutions, he sees an imbalance between capital markets because banks mostly control them. Moreover, the stock market is fragile and still to fully emerge, so enterprises do not consider it to be an effective and stable capital source.
In the view of Dr. Nguyen Tri Hieu, who has 32 years experience in finance in the US and Germany, Vietnam’s banking sector has undergone dramatic developments over the last ten years and while facing major challenges its stability was improving.
Vietnam has been penetrating deeper into the global market, having signed many international trade agreements and both the TPP and the AEC are on the horizon. The agreements have provided the necessary conditions for Vietnamese banks to integrate into the global system. Dr. Hieu added, though, that the country’s financial system has developed at a lower level than in other regional countries.
“To have a stable and attractive financial environment and to cope up with internal and external economic shocks, especially in the context of financial globalization, we have no choice but to participate,” Dr. Khuong said. He also emphasized the importance of risk management after becoming part of financial globalization. Three solutions were put forward: boosting long-term belief among investors; creating methods for macro finance management; and building a culture of investment and enterprise management.
The legal environment also needs to be clear and guarantee the ownership and rights of foreign investors, he recommended. “The restructuring process has brought initial stability to the banking system, but to fully integrate into financial institutions in multilateral and bilateral agreements the Basel global standards on risk management should be researched and applied in Vietnam as soon as possible,” he said.
Vice State President, Ms. Nguyen Thi Doan, meanwhile, emphasized that the forum was an opportunity to hear the opinions of overseas Vietnamese. She complimented the State Committee for Overseas Vietnamese under the Ministry of Foreign Affairs and the Central Economics Commission for organizing the forum and suggested it be held regularly.
Overseas Vietnamese intelligentsia, she said, accounted for 10 per cent of the 4.5 million overseas Vietnamese around the world and their knowledge could boost Vietnam’s rapid and stable growth.
Mr. Vuong Dinh Hue, Head of the Central Economics Commission, told the forum he expected it would develop in the future and would encourage domestic and overseas experts to share their opinions on the country’s development.