1. 1 IMPACT OF FINANCIAL CRISIS ON VIETNAM’S ECONOMY

2. 2 MACROECONOMIC INDICATORS (1)  The more integrated into the world economy, the more Vietnam’s economy affected by the up and down in the world economy.  GDP declines: 2007: 8,4%; 2008 6,5%; 2009: 4,5% - 48%  High inflation (2006: 6%; 2007: 12%, 2008: 23%)

3. 3 MACROECONOMIC INDICATORS (2)  VN Index was slashed by more 50%.  Increasing trade deficit.  Unemployment is high (more than 300.000 at the end 2009)

4. 4 FINANCIAL CRISIS AND STABILITY  What are the threats to peace and stability? Vietnam Government emphasizes on non- traditional security problems: Food, energy, financial security Poverty Inequality

5. 5 GOVERNMENT MEASURES (1)  Vietnam Government approved a stimulus program of $ 6 billion.  Stimulus measures are aimed at subsidizing/compensating interest rates for enterprises.  Develop infrastructure.

6. 6 GOVERNMENT MEASURES (2)  Helping low income families  Providing Financial assistance for unemployment  Encouraging companies to look for new export markets

7. 7 GOVERNMENT MEASURES (3)  Encouraging companies to buy equipment, machines, technology for post crisis business.  Looking for Foreign Direct Investment.  Stimulus program gives a positive result. GDP in the first quarter increased by 3,1%; exports rose by 2,4%, trade deficit declined.

8. 8 WHAT SHOULD WE DO TO COPE WITH FINANCIAL CRISIS AT REGIONAL LEVEL? Standing aside and hoping the problem goes away is not a good idea.

9. 9 RECOMMEDATIONS (1) 1/ Increasing the active role of regional governments as a market stimulator and supervisor. 2/ Enhancing intra - trade in Asia, reducing the impact of the slowdown in US/EU demand on Asian exports.

10. 10 RECOMMEDATIONS (1) 3/ Reducing the dependence of Asian Economies on US dollar (in the context of dollar volatility): Multilateralization, Asian Currency Cooperation.

11. 11 RECOMMEDATIONS (1) 4/ Improving regional financial surveillance mechanisms (an early surveillance, legal framework, risk management skills and policy coordination) as well as risk pricing capacity 5/ Finding new channels to help enterprises to cope with the current drying-up of liquidity.