The year 2022 has just passed, the new year 2023 has come with expectations and worries. Events that happened in 2022 will continue to affect 2023, both positively and negatively, as we take a look back at some of the events that stood out in 2022 and are likely to continue to influence in 2023.
- Two big criminal cases of Viet A and the rescue flight:
The two big cases of Viet A and the rescue flight revealed all the uncertainties in the operation of the Vietnamese economy and the shady relationship between officials and businesses. Viet A is a corruption and bribery case, but it is carried out on a large and methodical scale, involving all levels, from central to local governments.
The rescue flight case is more serious than the Viet A case, because it was committed by officials of the Ministry of Foreign Affairs and embassies. From the very beginning, people have recognized the problem because of the sky-high fares of flights hailed as “humanitarian and “rescue.” But the government did nothing to stop it. Only when everything was over, the pandemic also receded, then the government took action.
A series of high-ranking officials have been arrested in connection with these two cases. These two major cases clearly show that Vietnam does not have a mechanism to prevent a disaster as soon as it begins. Because, Vietnam has no control system, no transparency and no independent judiciary to investigate.
- The economy is in recession, people are unemployed but the economic indicators are very “beautiful“
Due to the impact of the world economic recession, high input material prices, plus the State Bank’s policy of tightening credit, production and business enterprises, especially export enterprises, had a stagnation year. Many factories and enterprises have to close down or reduce their production.
Hundreds of thousands of workers across the country have lost their jobs, millions of people only worked in moderation, and their incomes dropped significantly. This situation is likely to continue into 2023 because the world economy has not recovered and domestic enterprises have been exhausted.
However, by the end of the year, Vietnam announced GDP growth of 8% and inflation of 4%, very “beautiful” indicators, despite the fact that market prices are climbing and people’s incomes are seriously reduced. A survey on Vietnamnet showed that 57% of respondents answered that their income decreased, 22% remained the same and only 21% increased.
RFA once commented: “Vietnam’s statistics on growth and inflation are problematic. As RFA analyzed in September, the statistics on Vietnam’s economy by the General Statistics Office have contradictions. That could raise questions about the reliability of economic statistics in Vietnam.”
- Corporate bonds
Regulations on corporate bond issuance are too lax, leading to the government letting businesses issue bonds and losing control. According to the Ministry of Finance, the total value of bonds maturing in 2022 is VND144 trillion, will be VND271 trillion in 2023 and VND330 trillion in 2024 and the next 3 years is VND745.4 trillion. This is a huge tumor of the economy. It destroys people’s and investors’ confidence in the market. It leads to a situation where people keep their assets to protect themselves. When the people’s reserve money is no longer circulated in the market, it is difficult for the economy to develop.
Until now, the Government of Vietnam has not come up with a solution to this problem. Despite the victims of SCB, Sunshine, Egroup… rolling around screaming because of being cheated and losing money, the Government is still deaf and blind.
- The real estate market frozen, the stock market dropped sharply and the banking system was unstable.
In early and mid-2022, the Ministry of Public Security of Vietnam arrested a series of real estate giants such as FLC, Tan Hoang Minh, and Van Thinh Phat, along with the credit tightening policy that caused strong impacts freezing the real estate market. However, the freezing of the real estate market is actually the result of a long period of hot development, the “bubble” is inflated and ready to burst at any time. The real estate industry contributes more than 24% of GDP so it has a great influence on the economy.
The collapse of the real estate industry also revealed the deadly points of the Vietnamese economy. Legally, real estate businesses and banks are allowed to cross-own each other, making the financial system dependent on real estate. Cross-ownership also makes many banks become the backyard of businesses, supporting businesses to cheat, lie, ignore the consequences, and then shirk responsibility. Typically, the triangle relationship between Van Thinh Phat – Tan Viet Securities – SCB.
Because of these entangled relationships, the freezing of real estate led to a severe drop in the stock market and the loss of liquidity in the banking system. It is also because of these relationships that the bad debt situation of banks becomes worse.
The collapse of real estate, banking and securities would lead to the collapse of the whole economy, so the State Bank is forced to “rescue.” And of course, this rescue will have long-term consequences for the economy.
- VinFast exports cars to the US:
By the end of 2022, VinFast electric car company belonging to VinGroup exported 999 cars to the US. This activity was supposed to have great significance for the Vietnamese economy. This is the first time that Vietnam can export technology products, instead of exporting resources or just processed products.
However, due to the sloppy and deceitful business habits, “talking more than doing,” VinFast’s products have been exposed as poor quality and high prices, difficult to compete with other brands. In addition, VinFast also has financial health problems. Therefore, many experts believe that VinFast is unlikely to succeed.
- Vietnam-China relations:
Right after the Communist Party of China’s Nationl Congress ended, Mr. Nguyen Phu Trong paid an official visit to China, and became the first leader to come to Beijing to congratulate Mr. Xi on his re-election for a third term. During the trip, 13 agreements were signed and the two sides issued a “Joint Declaration.” The remarkable point of this “Joint Statement” is that: the two sides agreed to “discuss joint measures… that do not affect the positions and policies of each party; looking for a fundamental long-term solution that both sides can accept.” However, the stance and views of China and Vietnam on the South China Sea (Vietnam calls it the East Sea) and the two archipelagos named the Hoang Sa (Paracels) and the Truong Sa (Spratlys) are completely opposite.
Although receiving Mr. Nguyen Phu Trong very warmly and making seemingly friendly statements, China has completed equipping modern offensive weapons in the Spratlys. At the end of 2022, China partially completed construction of some reefs in the Spratlys, turning them into artificial islands. Bloomberg news agency reported that China has built at Whitsun Reef, Lankiam Cay, Eldad, and Sandy Cay rocks.
Thoibao.de (Translated)
