Vietnam different from Thailand in 1997, says Chinese economist

Thursday, June 19, 2008

A Chinese economist of US based Morgan Stanley said that it is impossible to compare Vietnam's current economic issues with Thailand's monetary and financial crisis that occurred in the late 1990s and it is also so hard to say that Viet Nam could be the start of a new financial recession in Asia.

Firstly, although Vietnam's state bank system and state enterprises have shown big problems, there does not appear any signal of comprehensive depression and bankruptcy. Secondly, foreign investment capital pumped into Vietnamese stock market now only accounts for about 20% equalling to US$6 billion. So the withdrawal of the money amount will not cause strong impacts.

Lastly, Viet Nam's foreign debts remains very small because 90% of this are long-term debts so Viet Nam does not have to suffer high pressure of short-term debt payment. In addition, the country's foreign capital attracting policy currently is fairly flexible and foreign investors' faith in Vietnamese environment has not signalled to be eroded yet, he added.

But, he warned, if the dong continues depreciating against the US dollar and inflation continues climbing without the government's effective intervention, an economic crisis would be hard to be predicted in advance. (VNA)