Minimum Wage Increase Will Fuel Domestic Demand and Consumption: National Assembly Deputy Chairman

VIR, Oct 23, 2012. The National Assembly’s (NA) 13th Legislature’s fourth session was launched on October 22, 2012 looking for solutions to help unclog the economy. NA deputy chairman Nguyen Si Dung said not delaying the minimum pay hike would be one of most effective solutions in current context to fuel demand.

In the previous session, the NA ratified a bailout package worth VND29 trillion ($ 1.4 billion) for corporate support. However, firms going bust kept constantly rising. Will the NA reconsider this bailout package or propose new ones?

In my personal forecast, the economy may only expand around 5 per cent this year on the back of very low aggregate demand at home and abroad. Hence, striving to fuel demand should be put at foremost importance when it comes to seeking effective remedies rather than stimulating credit growth. Credit expanding in the face of sinking demand could not help firms get out of difficulties.

Boosting demand is crucial. Hence, delaying salary hikes will not be a smart move in the current context since with increased salaries, people will be more willing for spending to bolster consumption.

One of the new points in this NA section is to review ministers’ promises. If the ministers were found to poorly handle their promises, what sanctions will we see?

In this session, the NA will consider and pass a Resolution relevant to the handling of a vote of confidence to people holding posts selected or approved by the National Assembly and People’s Council. After relevant procedures and processes are in place, the NA will come up with handling a vote of confidence in 2013.

Those ministers underperformed on their promises and gained low confidence rates in two consecutive years will be subject to taking another vote of confidence before final decisions are made.

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