KHỦNG HOẢNG CHÂU Á 1997 VÀ KHỦNG HOẢNG THẾ GIỚI 2008

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I ASIAN MONETARY CRISIS 1997
II REASON
The direct reason pushed Asian to crisis in the gulf due to the rapidly increase of
the loan which had no ability to pay.
In early 1990s,East Asian countries started loosening regulations for financial
markets,so a highly rising wave of loan, in which lending credit to the nonfinancial
business sector increase rapidly.
Simultaneously , due to weak oversight of the legal executive agency, some bank
lacked experts in tracking and monitoring the behavior of borrowers, losses due to
bad debts started to rise. All of them impacted negatively on the real of bank capital
of banks. Depleted resources, banks no longer afforded to borrow which made the
operation of the economy narrow because of insufficient working capital.
On the other hand, when the government implemented this policy, interest rate in
the Asian countries was higher than developed countries. Because of this, the
international capital flows poured massively to seek the higher profitability.
Unfortunately, when the real estate market of Thailand collapsed, some financial
institutions went bankrupt, people no longer believe in the ability of controlling
exchange rate of the government, a chain of foreign investors withdrawed capital at
the same time.
All three factors simultaneously impacted on the financial system, destroyed
liquidity of the banking series.
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I DEVELOPMENT
III Thailand
It was the origin of the crisis. From 1985 to 1996, Thailand's economy had a high
growth over 9% per year, the highest economic growth rate of any country at the
time. On 14 May and 15 May 1997, Thai baht was hit by massive speculative
attack. On 30 June 1997, Prime Minister Chavalit Yongchaiyudh said that he would
not devalue the baht.

Thailand's booming economy occurred in finance, real estate, and construction that
resulted in huge numbers of workers returning to their villages in the countryside
and 600,000 foreign workers being sent back to their home countries. The baht
reached its lowest point of 56 units to the US dollar in January 1998. The Thai stock
market dropped 75%. Finance One the largest Thai finance company until then was
collapsed.
On 11 August 1997, the IMF unveiled a rescue package for Thailand with more
than $17 billion, enclosed to conditions such as passing laws relating to bankruptcy
(reorganizing and restructuring) procedures and establishing strong regulation
frameworks for banks and other financial institutions. The IMF approved on 20
August 1997, another bailout package of $3.9 billion.
IV Philippines
On 03/07/1997, a day after the crisis began in Thailand, the Philippines central bank
forced to intervene in the market to protect the peso, increasing the overnight
interest rate from 15% to 24%. Value of the peso plummeted from 26 pesos to 38
pesos per a dollar in 2000, and up 40 pesos at the end of the crisis.
V Hong Kong
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The crisis occured 24 hours after the United Kingdom Hong Kong returned to
China. In 10/ 1997, the exchange rate of Hong Kong dollar was fixed against the
U.S. dollar was 7.8 but Hong Kong 's inflation rate- much higher than inflation in
the U.S. and this situation lasted many years . Because of this, the Monetary
Authority of Hong Kong had spent more than a billion dollars to defend the local
currency.
Despite of trying to keep a normal currency exchange rate, Hong Kong stock
market is extremely unstable, the Hang Seng index dropped 23 % in just three days
from 20 to 23/10/1997 and overnight interest rate had raised rapidly.The
government ended the war by spending approximately 120 billion Hong Kong
dollars ( about 15 billion U.S. dollars ) to buy shares of many companies , became a

major shareholder in a number of companies , such Government at HSBC in a 10%
stake .
VI Korea
Korea ranked 11th among the largest economies in the world . When a crisis
occurred, the poor condition of the existing banking system stemming from the
inefficiently huge debt so Moody " s downgraded the credit of South Korea from
A1 to A3 in January 11/1997 and continued down to B2 on December .
This event contributed to the Korean stock market plunged over, down 4 % on
07/11/1997 , reduced to 7 % on 8/11 and 7.2 %.So on the news 11/24/2997 IMF
requested Korean to reform the financial system .
In 1998, Hyundai acquired Kia Motors Motor. $ 5 billion-Venture Capital Fund of
Samsung was dissolved because of the strong impact of the crisis, following this
was the big event -Daewoo Motors had sold to General Motors.
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South Korea's won declined from 1000 to 1700 won a dollar change. In spite of
many efforts to improve the GDP per capita , after the crisis , Korea's national debt
tripled compared to the previous .
Before that situatio, the IMF support package for South Korea was announced in
Seoul on December 3, 1997 and was formally approved by the IMF on the
following day. It eventually consisted of $57 billion.
VII Malaysia
Before the crisis, the transactional account deficit was about 5%. Malaysia is a
country received much the foreign investment, this was reflected in the KLSE
(official stock exchanges of Malaysia) is considered the most active trading floor in
the world (even total value of transactions surpassed the NYSE). At that time,
everyone expected the country to maintain growth and become a developed country
by 2020.
Before the crisis, KLSE Index stands at 1.200, the ringgit was trading at 2.5:1 ratio
against the dollar, the overnight rate less than 7. Overnight rates rose from under

8% to 40%, which made the credit rating was down and occurred wave of selling
securities and currency massively. At the end of 1997 , KLSE lost 50% points,
dropped below 600, the ringgit also lost 50% of its value .In 1998, GDP fall 6.2%,
the ringgit dropped 54.7% value and KLSE slipped to under 270 points.
VIII Indonesia
On August, Rupiah was attacked by speculators and 14th, the regime of floating
exchange rates had been replaced by managed floating regime completely. Rupiah
was devalued continuously. IMF had arranged a financing package of emergency
aid to Indonesia up to 23 billion Dollar, but Rupiah was devalued continuously by
massive sales and demand in U.S. Dollar soared. On September, Rupiah prices and
the stock market index decreased to levels below historic norms. In this situation,
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many companies promoted to buy Dollar (mean Rupiah sold out) making more
currency devalued and inflation rate soared.
Inflation accelerated with tightening fiscal policies as required by IMF that made
the government did not subsidize food and gasoline, so prices of two items
increased. The scrambling to purchase broke out. Particularly in Jakarta there were
500 people killed by violence. The economic crisis and social crisis had led to a
political crisis. Between 1998, Suharto was forced to resign presidents.
Before the crisis, the exchange rate between the Dollar and Rupiah was about
2000:1. But in periods of crisis, the exchange rate had dropped to 18.000.
IX American and Japan
The economy of the two major powers were not collapsed, but also heavily
affected. On 11/27/1997, DJ Industrial Index fell 554 points, or 7.2%, the NYSE
temporarily stopped trading in a short time.
Japan economic relate closely and tightly with the Southeast Asian countries. From
late 1990s, after the economy "bubble" fell, domestic demand was not high, the
recovery of the Japanese economy is mainly based on exports. Southeast Asia is one
of the major export markets of Japan, so the currency devaluation and economic

stagnation situation in Southeast Asia has significantly affected Japan's exports to
the region. At the crisis, USD/JPY dollar fell to 147 ,GDP growth in Japan
decreased from 5% to 1.6%. The Asian crisis also made a number of business
bankruptcies in Japan.
X CONSEQUENCES
XI Asia
The crisis had significant macroeconomic-level effects, including sharp reductions
in values of currencies, stock markets, and other asset prices of several Asian
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countries. The nominal U.S. dollar GDP of ASEAN fell by US$9.2 billion in 1997
and $218.2 billion (31.7%) in 1998. In South Korea, the $170.9 billion fell in 1998
which was equal to 33.1% of the 1997 GDP. Many businesses collapsed, and as a
consequence, millions of people lived below the poverty line in 1997–1998.
Indonesia, South Korea and Thailand were 2 countries most affected by the crisis.
The economic crisis also led to a political upheaval, most notably culminating in the
resignations of President Suharto in Indonesia and Prime Minister Chavalit
Yongchaiyudh in Thailand. Heavy U.S. investment in Thailand ended, replaced by
mostly European investment.
More long-term consequences included reversal of the relative gains made in the
boom years just preceding the crisis. Nominal US dollar GDP per capital fell 42.3%
in Indonesia in 1997, 21.2% in Thailand, 19% in Malaysia, 18.5% in South Korea
and 12.5% in the Philippines. The CIA World Factbook reported that the per capita
income (measured by purchasing power parity) in Thailand declined from $8,800 to
$8.300 between 1997 and 2005; in Indonesia it increased from $2.628 to $3.185; in
Malaysia it declined from $11.100 to $10.400.
XII Outside Asia
After the Asian crisis, international investors were reluctant to lend to developing
countries, leading to economic slowdowns in developing countries in many parts of
the world. The powerful negative shock also made sharply reduced the price of oil,

which reached a low of about $11 per barrel towards the end of 1998, causing some
financial matter in OPEC nations and other oil exporters. In response to a severe fall
in oil prices, some mergers and acquisitions were implemented between 1998 and
2002.
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The reduction in oil revenue also contributed to the 1998 Russian financial crisis,
which in turn caused Long-Term Capital Management in the United States to
collapse after losing $4.6 billion in 4 months. A wider collapse in the financial
markets was avoided when Alan Greenspan and the Federal Reserve Bank of New
York organized a $3.625 billion bailout. Major emerging economies
Brazil and Argentina also fell into crisis in the late 1990s.
XIII Vietnam
After renovation, the Soviet Union and Eastern Europe-the main trade partner of
Vietnam disintegrated. After this time, Vietnam began to search new export
markets, such as Southeast Asian countries such as Singapore, Japan, Korea,
Taiwan. The growth is not longly maintained the Asian crisis occurred. The growth
began to decline in 1994 and fell sharply in Vietnam 1997.1998 by mainly relying
on the market to exports. Besides, FDI investment in Vietnam decreased
considerably, numerous investors simultaneously withdrawn, the amount of
investment for the project fell 16% in 1996, 45.3% in 1997, 1 6.1% in 1998. But the
impact was not significant compared to the loss of Indonesia, South Korea and
Thailand.
XIV LESSON FOR VIETNAM
Essence of the Asian currency crisis was a crisis of foreign debt. During the crisis,
the demand for dollars was too high while the supply was limited. Local currency
depreciated rapidly which leading to loss of the ability to pay it. That is the first
lesson for Vietnam -how to manage exchange rate to change least.
In strategic economic development as well as macroeconomic management,it is
necessary to maintain a relative balance between these goals: inflation, growth,

interest rates, balance of payments Macroeconomic policies need to be running a
flexible, synchronous, tightly coordinated and complement each other.
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Continuing to open the economy but not completely loose. Vietnam needs to
maintain a reasonable ratio: between domestic capital and foreign loans, between
short-term capital, medium and long-termcapital; between borrowing term and
invested subjects.
XVTHE WORLD FINANCIAL CRISIS IN 2008
XVI REASON
The current economic crisis is considered the greatest economic crisis, the most
severe in the world for more than 60 years since the Great Depression 1929-1933
World. The cause of the crisis were identified as starting from the financial crisis in
the U.S. There were many reasons leading the world financial crisis 2008,they
could be listed as:
XVII Imprudent mortgage lending
Against a backdrop of abundant credit, low interest rates, and rising house prices, in
2006-2007 lending standards were relaxed to the point that many people were able
to buy houses they couldn’t afford.( Just from 5/2001 to 12/2002, the Fed had cut
loan interest rates 11 times from 6.5% to 1.75% / year.)Low interest rates led many
homebuyers rushed that blew up "bubble" real estate. House prices rise made banks
feel safe to give money to people who did not have the ability to repay the loan.
And the bank also think that, if the borrower did not repay, they would seized value
which has been pushed higher. When prices began to fall and loans started going
bad, there was a severe shock to the financial system.
XVIII Securitization
So what is securitization?
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Securitization is the financial practice of pooling various types of contractual debt

such as residential mortgages, commercial mortgages, auto loans or credit card debt
obligations and selling said consolidated debt as bonds, pass-through securities, or
collateralized mortgage obligation (CMOs), to various investors. The principal and
interest on the debt, underlying the security, was paid back to the various investors
regularly. Securities backed by mortgage receivables are called mortgage-backed
securities (MBS), while those backed by other types of receivables are asset-backed
securities (ABS).
The reason for these banks can give people mortgages "subprime" risky with a large
scale by the financial companies and investment banks, in particular the two
companies Fanie Mae and Freddie Mac was sponsored by the U.S. government,
"financed" by buying loans from banks, turned them into vouchers are secured by
mortgage loans for resale to companies, banks other large investors, such as
Stearms Bear, Merrill Lynch
This finance company, investment bank issued that bonds again on the basis of
evidence from mortgage lenders to sell it for U.S. banks and other banks in many
countries around the world .The "securitization" of mortgage loans were beyond the
control of the state. Chain speculative business activities of the housing market had
heated up, housing prices were pushed up high, becoming "bubble".
In summary, Banks had not prudent for subprime loans. Ownership of mortgage-
backed securities were widely dispersed, causing repercussions throughout the
global system when subprime loans went bad in 2007.
XIX Global imbalances
Global financial flows have been characterized in recent years by an unsustainable
pattern: some countries (China, Japan, and Germany) run large surpluses every
year, while others (like the U.S and UK) run deficits. The U.S. external deficits
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have been mirrored so U.S. borrowing cannot continue indefinitely; the resulting
stress underlies current financial disruptions.
XXLack of Safty,Transparency and Accountability in Mortgage Finance

“Throughout the housing finance value chain, many participants contributed to the
creation of bad mortgages and the selling of bad securities, apparently feeling
secure that they would not be held accountable for their actions. A lender could sell
exotic mortgages to home-owners, apparently without fear of repercussions if those
mortgages failed. Similarly, a trader could sell toxic securities to investors,
apparently without fear of personal responsibility if those contracts failed. And so it
was for brokers, realtors, individuals in rating agencies, and other market
participants, each maximizing his or her own gain and passing problems on down
the line until the system itself collapsed. Because of the lack of participant
accountability, the originate-to-distribute model of mortgage finance, with its once
great promise of managing risk, became itself a massive generator of risk.”
-Statement of the Honorable John W. Snow before the House Committee on
Oversight and Government Reform, October 23, 2008.
Those reasons mentioned were direct reasons why 2008 economic crisis occurred,
but more deeply, the financial crisis caused by the structure and operation
mechanism the U.S. economy. After the world economic crisis of 1929-1933, the
economic theory to enhance the role of market self-regulation, Keynesian economic
theory to enhance the role of state regulators in market economies were born.
Coordination mechanisms between market regulation and state regulation which
helped world market economy grew relatively stable for more than 60
years(corrective, reduce the scale, devastaing of the economic crisis). But in the 80s
of the previous century, the school of neo-liberal economics (neoclassical) was
featured. In the context of implementing policies of economic liberalization, the
government also implemented loose monetary policy in a long time. To recover the
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the U.S. economy after the recession in 2001, the U.S. Federal Reserve (Fed) has
continuously decreased interbank interest rates (from 6.5% to 1.75%). Accordingly,
the interest rate of credit loans also dropped to lower.
XXI DEVELOPMENT

On 6/2007, two Bear Stearns’s hedge funds -5th largest investment bank of
American collapsed after betting on the securities secured by sub-prime real estate
loans.
On May 7-9/2007 German bank’s IKB became the first bank in Europe influenced
by the subprime loan on the market. And German bank’s SachsenLB had also
received bailout from the government.
8/2007 a number of U.S. credit institutions such as New Century Financial
Corporation carried out procedures for defaulting. Particularly countrywide
Financial Corporation share prices dropped drastically. Fearing psychology of the
people led to a series withdrawals. In this credit institutions , piled difficult,
shortage credit risk formed. So the financial crisis officially began here.
Britain was not out of sphere of influence.14/9/2007, for the first time in more than
a century, the mortgage bank- Northern Rock (the fifth largest bank in the UK) was
shaken for a large mass of money was withdrawn.
On 15/10/2007, Citigroup - U.S Leading Banking Group announced 3rd quarter’s
profit down 57% unexpectedly due to losses and provisioning up to $ 6.5 billion.
17/12/2007 credit crisis spread to Australia with the victim was Centro Properties
Group-owner of grand shopping boulevards in the United States after it put a
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warning about reduced profits. Centro Properties stocks fell 70% in trading in
Sydney.
On December 2007, the forecast for the end of the year that the economy would
have a comprehensive adjustment and longer than expected. And the fact that
shortage credit became more and more apparently. Federal Reserve System tried to
reduce the inter-bank interest rates on 12/2007 and 2/2008, but it’s not effective as
expected.
On 11/1/2008 Bank of America (the largest bank in USA about deposits and market
capitalization) had spent $ 4 billion to buy Countrywide Financial after it went
bankrupt because of bad loans.

17/02/2008, British nationalized Northern Rock bank.
28/2/2008, DZ Bank of Germany were included in the list of victims of the
subprime lending crisis, with total depreciated assets worth up to 1.36 billion euro.
From 16 to 17/3/2008, Bear Stearns was sold JP Morgan for $ 10 dollars per share.
7/9/2008, Fed and U.S. Finance Ministry took Fannie Mae and Freddie Mac to
support U.S. real estate market.
On August 2008, Lehman Brothers, the largest and oldest financial institution in the
United States, went bankrupt. Merrill Lynch Bank of America Corp. was acquired,
American International Group - the largest insurance groups in the world lost
liquidity due to losses related to mortgage debt.
15/9/2008, this was the worst day on Wall Street since the market reopened after the
terrorist 11/9/2001.
20-21/9/2008, announcing the details of the rescue plan of 700 billion dollars. Two
banks Goldman Sachs and Morgan Stanley were converted into multifunctional
banking group that marking the end of the investment banking model on Wall
Street.
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25/9/2008, Washington Mutual Inc. -one of the largest U.S. banks collapsed. On
September 2008, the U.S. Senate passed the Emergency Economic Stabilization Act
which allowing the United States spent $ 700 billion to rescue the country's finances
by buying back bad loans of banks goods, especially securities secured by real
estate. The economic crisis in the U.S spread to Europe, made Spain’s economy,
Ireland and Denmark on the recession brink; French’s economy weakened and
leading economy as German, English, Italian were bleak.
XXII CONSEQUENCES
XXIII For US
Since the crisis has took place, a number of financial institutions including the
longstanding giant financial institutions went bankrupt pushing the U.S. economy
into a credit deficit. Lack of capital, the plant had narrowed producing even fired

labor layoffs, cut the input contract. Unemployment was rising, people could not
afford to buy more goods, so that the business did not sell the goods. Lack of credit,
no money collected from sales at so many businesses went bankrupt or at risk of
bankruptcy. Three leading automobile manufacturers in the United States was
General Motors, Ford Motor and Chrysler LLC also were at risk of bankruptcy.
December 12, 2008, GM had announced the temporary closure of its 20 plants in
North America. Reducing consumption, excess unsold goods led to the general
price level of the economy steadily declined, pushing the U.S. economy to a risk of
deflation. On 15/9/2008, 4
th
large investment bank Lehman Brothers filled for
bankruptcy protection, at the same time that Merrill Lynch was acquired by U.S.
banks. On 16/9 American International Insurance financial group AIG was taken
over by the U.S. government.
Speed of the financial crisis on Wall Street had spread rapidly around the globe.
Finally, the U.S, Europe, Japan and emerging countries in turn focused to rescue
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market and put the stimulus package. On 15/11 leaders of 20 major economies in
the world had held summits in Washington.
From the visible impact of the crisis , people had begun to doubt the American free
trade model. To prevent its spread, frequency and extent intervention of U.S.
government in the market was fairly high. At the same time, a series of financial
institutions had to reorganize.
Over crisis, the proportion of the U.S. economy compared to the world economy
was declined.In 2008, this ratio was 23.79%, its lowest level in 20 years back.
Declining dollar value, up to September 2009, the dollar had lost 10% compared to
12/2005 and 18% compared with December 2000 (based on the USD / SDR).
Exchange rate calculated on SDR September 2009
Source:IMF(Exchange rate calculated on SDR September 2009)

Currently, the budget deficit in 2008 was estimated at 482 billion figure -the highest
in history, and the amount debt of U.S. government had reached to the record figure
of 9.600 billion dollars, equivalent approximately 60% of Gross National Income of
U.S. citizens. On 11/2013 China Treasury bonds that U.S. holding to
unprecedented levels 1,317 billion.
XXIV For world
The world overcome consequences cost of this crisis was about 11.900 billion U.S.
dollars, according to estimates by the IMF Monetary Fund. Most of the money
spent was from developed countries with figures up to 10,200 billion. Whereas
developing countries spent only U.S. $ 1.700 trillion. Global GDP was 5,826 billion
USD in 2009 that decreased if we compared with 2008.That pulling the average
speed of the entire development stage went down, from 4.04% for the period 2001-
2007, to 3.2% for the period 2001-2010.
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% changes compare
with 2005
% changes compare
with 2000
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For Asia, the stock market might be strongest influences. U.S. stocks plummeted
creating unsafe psychology for investors in Asia whereby stock markets of these
countries also began to decline. In the year 2006-2007, the individual investors
instead of depositing into banks, they had chosen the stock market was their
currencies “shelter”. Therefore when the stock market began to decline, assets of
the personal investors also declined, leading to the spending cuts, stagnant
production. However, this effect was only strong in advanced economies such as
Japan, South Korea, Taiwan.
And Asia's export was also affected significantly. The main reason was because the
U.S was so important import markets of many countries so that when the economic
degraded, countries's exports were damaged. But since the recession, two major

economies of Asia (Japan and China) had significantly reduced dependence on the
U.S. market. For example in 2002, the U.S. accounted for 27% of Japanese exports,
but by 2007 only 20%. Replace the position of the United States, China became the
largest export market of Japan. For China, since 2007, the biggest export market
shifted from the U.S. to EU.
This crisis caused many disadvantages but looking at other aspect, the U.S. crisis
made the voice and position of Asian countries got more advanced in relationships
with the United States and in the effort to stabilize international currency markets
and the world economy. With a huge foreign currency reserves (China held 4000
billion USD, Japan more than 1200 billion dollars), Asian countries could easily
buy U.S. government bonds, participate to own financial companies of the U.S
Japan clearly shows that role. Mitsubishi Financial Group of Japan purchased 21%
shares of Morgan Stanley, Nomura Group bought some shares of operations branch
of Lehman Brothers in Asia, Europe and the Middle East.
Similar to Asia, Europe had strong economic ties with the United States so they
were seriously affected both financially and economically. Many financial
institutions went bankrupt and gradually became the financial crisis in some
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countries such as Iceland, Russia. The largest economic region were Germany and
Italy also dropped into recession, the UK, France, Spain growth decreased. Official
euro area fell into the first recession since its founding… so on.
The world not only faced financial difficulties but also faced food speculation and
the suddenly rise of crude oil prices. In late 2007 early 2008, the global food crisis
occurred. In 2008, food prices around the world rose 80% of which food prices rose
by 230%, food prices rose 12.8%.
Had at least 37 countries around the world faced food crisis. By the day of April,
the price of rice - the staple food of more than half the world's population, has
increased dramatically from 550 USD / ton to 760 USD / ton and up to $ 1,000 / ton
pushing millions of people in the America, Africa -"the granary of the world" went

into hunger.
In contrast, world crude oil prices in late 2008 went down deeply and on 3/12
dropped below 45 USD / barrel - the lowest level since February 5th. No one could
guess that just a few months earlier, culminating in July, the price of a barrel of
crude oil was 3.5 times its. So it impacted terribly to activities, consumption and
travel habits of billions people from Asia, Europe until Africa and Latin America.
On the Vietnam side, the impact of the crisis was probably not significant.
Monetary system, the capital market and the stock market in Vietnam were not
healthy, vulnerable, easy to fall into turmoil due to internal factors in Vietnam as a
lack of public transparency, insider trading indirectly, not closely related to the
U.S. crisis.
Conclusion
The subprime mortgage crisis of 2007 was originated from the United States
loosing management in subprime loans and credit from the greed of the market.
Securitization is a smart financial tool which had been abused so it caused
unpredictable consequences. Investors should understand the risks before buying
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complex financial products in order to avoid heavy losses. These were valuable
lessons to any country in the process of integration and development.
XXV LESSONS FOR VIETNAM
Although the crisis had passed but the research giving the lessons for Vietnam to
avoid seeding similar crises in the future is essential thing.
On the Vietnam side, so far, we prioritized exporting (60% of GDP) and being
dependent on it. This crisis happened, it showed that too strong outward-oriented
strategy will not be sustainable. So we need to focus on building and strengthening
the domestic market (pay attention to local businesses and turn them into economic
growth dynamics, full attention to all economic sectors to improve to response with
negative due to the global financial crisis caused, enhance the skills of the people of
Vietnam).

Besides, Vietnam that he country of 80 million people, ranked 14th in the world,
young population then we must exploit all these factors are. Vietnam has a low cost
of production, cheap labor cost, which is a competitive advantage and key to attract
investment. Have to develope internal resources and market potential from urban to
rural areas.
In addition, Vietnam has the "envelope" disease . Relation costs cause increasing
production costs by 5-10%. If you do not mind change, effective implementation of
business management, Vietnamese enterprises will be very difficult to compete on
the international stage.
Furthermore, Vietnam's public debt is more than 50% of GDP now. And the most
important problem is effective investment management. The goal is not to reduce
public debt, that we use it effectively to develop .
That want to use it for good to review all investment projects and must have the
necessary personnel to manage for efficiency. Consequences if the debt is not paid
will lead to foreign dependence, dependent nations or certain financial institutions.
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Vietnam should also learn from this crisis to be more cautious in financial activities,
especially for real estate lending business in Vietnam. The most important lesson is
the state agency has to monitor operation the financial institutions closely to avoid
"falling asleep" on "steering wheel" his.
State Bank has an important role in improving the efficiency of public debt
management, from construction public debt management strategy to implement.
Therefore, there should be strict regulations, tighter credit management.
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TABLE OF CONTENT
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