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8/2/2019 Final Report (Fix)
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Ho Chi Minh City International University
Critical Thinking
VIETNAM ECONOMY IN US FINANCIAL CRISIS
Lecturer:
Group members:
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Contents
Part A: INTRODUCTION TO US FINANCIAL CRISIS
1. Background2. Causes3. Evolution4. Consequences5. Solutions
Part B: VIETNAM ECONOMY IN US FINANCIAL CRISIS
1. The influence of US financial crisis on economy of Vietnam
2. Solutions of Vietnam Government3. Preventing the influence of US financial crisis from happening
again in the future
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PART A: INTRODUCTION TO
US FINANCIAL CRISIS
1. BACKGROUND:
The financial crisis of 2007 to the present is a crisis triggered by a liquidity
shortfall in the United States banking system caused by the overvaluation of assets. It
has resulted in the collapse of large financial institutions, the bailout of banks bynational governments and downturns in stock markets around the world. In many
areas, the housing market has also suffered, resulting in numerous evictions,
foreclosures and prolonged vacancies. It is considered by many economists to be the
worst financial crisis since the Great Depression of the 1930s. It contributed to the
failure of key businesses, declines in consumer wealth estimated in the trillions of
USD, substantial financial commitments incurred by governments, and a significant
decline in economic activity. Both market-based and regulatory solutions have been
implemented or are under consideration, while significant risks remain for the world
economy over the 20102011 periods.
2. CAUSES:
a) Securitization (sub-cause):
The product securitized first appeared in the 1970s and thrive in an
environment of monetary policy was loosened in 2001.
Securitization and the released product of this process as securities
guaranteed by collateral (MBS), paper debt secured by assets (CDO) and the
like is a great invention of the financial instruments. However, due to at least
four types of economic entities related to securitized (instead of the two types
of the world economy as mortgages - borrowers and credit institutions to
borrow - as mortgagee transactions Traditional credit), because the
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appearance of insurance for securitized products such as swap contracts credit
losses (CDS). Since the birth of institutions such as special-purpose institutions (SPV) and the
structure of investment instruments (SIV) to purchase MBS, and CDO, so
existing systems risks, including risks ethics and Adverse selection. While
which model of financial supervision of the United States before the crisis is not
enough capacity to monitor the risks.
The systemic risk existed and when the incident to bubble market assets
occurs, these risks will make tremendous distrust of the parties involved. Inaddition, the practice of inter-bank lending will cause credit losses spread
throughout the banking system; a bankrupt bank would entail many other banks
out of business. Moreover, losing trust in the depositors cause withdrawal of
deposits mutations also make the situation more serious and more rapid.
Indeed, the housing market began to adjust in 2005 led to housing prices and
lower asset quality guarantee for the MBS and CDO down. Systemic risks have
made the housing credit crisis erupted in the secondary in May 2006 when
many issuers MBS and CDO as well as some financial institutions that the
asset portfolio of their many MBS and CDO collapse. Next, the financial crisis
erupted in August 2007 when both the SPV and SIV turn also collapses, and
then developed into a global financial crisis since May 9, 2008 when the entire
giant financial institutions giant like Lehman Brothers collapse.
b) Housing bubble (main cause):
After the Dot-com bubble
broke in 2001 and the
economic slowdown evident
after September 11 events,
the Federal Reserve United
States has made monetary
measures to rescue the
country's economy from
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recession, that lower interest rate for overnight interbank loans. Only a short
time from May 2001 to December 2002, the interbank interest rates drive down11 from 6.5% to 1.75%. Secondary credit interest rate reduction as well. This
stimulates the development of the real estate sector and construction industry
as a driving force for economic growth. In the easy credit environment, the
financial institutions tend to lend risky, even for illegal immigrants borrowing.
Consequently, lending and borrowing massively in order to lead to formation of
speculative housing bubble. In 2005, up to 28% of the purchase is for
speculative purposes and not just to buy 12%. In this, this housing bubble todevelop the maximum level and broken. From fourth quarter 2005 to first
quarter of 2006, the median value of home prices decreased 3.3%. At that time,
the total value of credits accumulated in the secondary up to 600 billion dollars.
After the housing bubble burst, these
individuals have difficulty in repayment.
Many organizations credit home loan
difficult because creditors cannot recover.
Housing prices plummeted causing all
kinds of paper debt secured by assets such
as: CDO or MBS by the financial issue was
a serious discount. As a result the balance of the assets of these institutions to
deteriorate and their credit ratings are the rating agencies reviews lag. The
credit crisis erupted in the secondary.
3. EVOLUTION:
August 2007, a number of credit institutions of America as New Century
Financial Corporation must apply for bankruptcy. Others have fallen into the
state shares its strong devaluation as Countrywide Financial Corporation. Many
people send money in the credit institution has to fear and withdraw money,
causing the phenomenon of sudden withdrawal of deposits made to these
organizations more difficult. The risk ratio may increase establishment.
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Financial crisis broke out officially true. From the US, this disorder spreads to
other countries all the around the world. In the UK, bank Northern Rock shakenbecause depositors queued to withdraw their deposits. Under these
circumstances, the United States Federal Reserve has been taking measures
to increase the level of liquidity of credit markets such as the implementation of
open-market purchase on the type of US government bonds, agency bonds US
government and government agency bonds guaranteed by the US housing
credit.
September 2007, the Federal Reserve cut interest rates also conducted forovernight interbank loans (Fed fund rates) from 5.25% to 4.75%. Meanwhile,
the European Central Bank has pumped 205 billion USD in the credit markets
to raise liquidity.
December 2007, the crisis aggravated stepped forward to when the reports last
year showed that the economic adjustment of the real estate market place
longer than expected and also the scale of the broader crisis plan. Bad Credit
hunger became apparent. Federal Reserve System tried to decrease the inter-
bank interest rates in December 2007 and February 2008, but not as effective
as expected.
March 2008, Federal Reserve
Bank of New York tried to rescue
Bear Sterns, but not well. The
company agreed to JP Morgan
Chase bought for 10USD a share
that is much lower with a share
price of 130.2USD at the most
expensive before the crisis
erupted. The Federal Reserve
Bank of New York famous rescue
Bear Sterns and not forced to sell
this company was made with cheap price for the concern about the capacity of
government intervention aid financial institutions meet difficult. The collapse of
Bear Stern has pushed up ladder crisis more severe.
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August 2008, in turn Lehman Brothers, a financial institution into the largest
and oldest in the US, went bankrupt. Lehman Following are some othercompanies.
September 2008, the United States Senate passed Economic Stabilization Act
of 2008 Emergency Minister of Finance for expenditure to 700 billion USD
financial rescue of the country by buying back the bad loans of banks goods,
especially securities secured by real estate.
4. CONSEQUENCES:
a) For the US:
This crisis is the main cause for the US economy fell into recession from
December 2007. The National
Bureau of Economic Research
(NBER) predicts this will be the
most severe recessions in the
United States since the World
War II. Average per month from
January to September 2008, has
84 thousands of laborers lost
their jobs the US.
Numerous financial institutions,
including the giant financial institution are bankrupt and have long pushed the
US economy into the state of a credit starvation. In turn, re-credit hunger affect
regional production making enterprises must reduce production, firing workers,
cutting contracts entered input. Unemployment increases affect consumption
pole to income and hence to consumption of households do for businesses
selling hard goods. Many businesses were bankrupt or in danger of bankruptcy,
in which all three automobile manufacturers in the US such as: General Motor,
Ford Motor and Chrysler LLC. Leaders of three carmakers have instigation of
Congress relief, but without success. On December 12, 2008, General Motor
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had announced the temporary closure of its 20 plants in North America.
Reduce consumption leads to the general price level of the economydecreased continuously; pushing the US economy may be subject to the risk of
deflation.
The crisis also made the USD to appreciate. Due to USD liquidity is most
popular in the world today, should global investors bought dollars to improve its
liquidity, the USD pushing up prices. This makes US exports of damage.
b) For the world:
The United States is an important import market of many countries, so that
when the economic downturn, exports of many countries affected, especially
those countries towards exports in East Asia. Some in this economy as Japan,
Taiwan, Singapore and Hong Kong into recession. The other economies are
slowing growth.
Europe which has close economic ties with the United States seriously affected
both the financial and economic. Many financial institutions went bankrupt here
to become the financial crises in some countries like Iceland, Russia. The
largest economic sector is Germany and Italy fell into recession, and Britain,
France, Spain with decreased growth. The official euro area fell into the first
recession since its founding.
The economy in Latin America
has close ties with the US
economy, should also be
affected negatively when the
short-term capital flows to
withdraw from the region and
as oil prices slump.
Ecuadorian forwards to the
brink of a debt crisis. The
regional economic slowdown
in the world demand for oil led to reduced production and consumption as well
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as lower oil prices. This in turn makes the oil exporting countries affected. Also,
because of fears of instability occurs has food for speculation broke out,contribute to rising food prices during late 2007 to early 2008, creating a crisis
of global food prices. Many stock markets round the world faced a serious
devaluation of securities. Investors moved their portfolios into the stronger
currency as the USD, Japanese yen; Swiss franc has made money for this
going up against many other currencies, causing difficulties for US exports,
Japan, Switzerland and the disruption of currency in some countries to force
them to apply for assistance by the International Monetary Fund (IMF). SouthKorea fell into a currency crisis when the won depreciated continuously
beginning in 2008.
5. Solutions:
Economic stimulus
The U.S. Federal Reserve has done steps to expand money supplies to avoid
the risk of a deflation. The U.S executed two stimulus packages, totaling nearly$1 trillion during 2008 and 2009.
On 13 February 2008, President Bush signed into law a $168 billion economic
stimulus package, mainly taking the form of income tax rebate directly to
taxpayers.
On 17 February 2009, U.S. President Barack Obama signed the American
Recovery and Reinvestment Act of 2009, a $787 billion stimulus package with
an encouragement of spending and tax cuts. Over $75 billion of which wasspecifically allocated to programs which help struggling homeowners.
Beside U.S, China was one of the first countries to act, with a stimulus package
of nearly $586 billion. Euro zone also decided on a mutual financial aid
package of 750 billion.
On November 1415, 2008, in Washington, D.C., United States. It achieved
general agreement amongst the G-20 on how to cooperate in key areas so as
to strengthen economic growth, deal with the financial crisis, and lays thefoundation for reform to avoid similar crises in the future.
The five key objectives the leaders agreed were:
http://en.wikipedia.org/wiki/Federal_Reservehttp://en.wikipedia.org/wiki/Deflationary_spiralhttp://en.wikipedia.org/wiki/George_W._Bushhttp://en.wikipedia.org/wiki/Income_taxhttp://en.wikipedia.org/wiki/Barack_Obamahttp://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009http://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Washington,_D.C.http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/G20_major_economieshttp://en.wikipedia.org/wiki/Global_financial_crisis_of_2008http://en.wikipedia.org/wiki/Global_financial_crisis_of_2008http://en.wikipedia.org/wiki/G20_major_economieshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Washington,_D.C.http://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009http://en.wikipedia.org/wiki/Barack_Obamahttp://en.wikipedia.org/wiki/Income_taxhttp://en.wikipedia.org/wiki/George_W._Bushhttp://en.wikipedia.org/wiki/Deflationary_spiralhttp://en.wikipedia.org/wiki/Federal_Reserve8/2/2019 Final Report (Fix)
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Reached a common understanding of the root causes of the global crisis
Reviewed actions countries had taken and would take in the future toaddress the immediate crisis and strengthen growth
Agreed on common principles for reforming their financial markets
Launched an action plan to implement those principles and asked ministers
to develop further specific recommendations that would be reviewed by
leaders at a subsequent summit
Reaffirmed their commitment to free market principles.
Leaders of the G-20 gather on April 2 in London for their second summit. As
the world combats a great recession, the leaders addressed how to help
stabilize financial markets and re-start economic growth, reform the global
financial system, and aid developing and emerging economies
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Part B: VIETNAM ECONOMY IN US FINANCIAL CRISIS
1. The influence of US financial crisis on economy of Vietnam:
How does the financial crisis in the U.S. influence to Vietnam? It depends on
the economic relationship between the two countries. Remains the most investment,
today, US is one of the largest investors in Vietnam. Other projects from the U.S. into
Vietnam in large part the early stages and focus on long-term infrastructure. In
contrast, short-term relationship, we export to the U.S. more. On trade, the U.S. is
currently the largest export market of Vietnam; its about 23-25%. However, in
relationship between the two financial and banking systems, its almost negligible.
But, in a globalized world today, this crisis has created significant impact on the macro
economy of Vietnam in many different aspects, leaving many problems for us to solve.
a) Export:
First, the financial crisis makes
export market shrinking due to
strong import demand and
liquidity in key markets is
declining. This effect directly
on production and export of
Vietnam, especially for certain
Exports $63.73 billion (2008 est.)
Exportgoods
Crude oil, marine products, rice,coffee, rubber, tea, garments,
shoes, pepper.
Main
exportpartners
US, EU, Japan, Australia, China,
Singapore ...
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sectors such as export value of textile and
garment, footwear, plastic, etc...
Second, commodity price reduction on a
global scale makes the advantage of
Vietnam's export price in 2008 is no
longer as in 2009. Exports of
agricultural, forestry, aquaculture and
mineral are difficult due to falling prices.
Third, the number of anti-dumping and anti-subsidy increase when import
countries interest more in regaining the market for domestic enterprises during
financial crisis. On the other hand, the import demand on world markets lower
the competitive pressure from other Asian countries continue to rise, especially
for agricultural products, aquatic products, textile footwear, electrical goods, ...
makes exporters more difficult to find customers, contracts.
In terms of export structure: Group of agricultural products, aquatic products is
not affected by the market because these are the essential goods daily so
reducing demand is not significant. However, the difficulty of this category is the
export price lower than in 2008. Export turnover in the first 7 months in 2009 is
estimated at $7.13 billion, down 8.2% over the same period in 2008.
Categories of processing, industry and handicrafts are predicted to be affected
much from the crisis as the demand of these commodities will decrease.
Indeed, in the early months of the year, exports of textiles and garments,
footwear, furniture is difficult due to market shrunk. However, in May and June
of 2009, there were some signs of recovery. Export turnover in first-7 years in
2009 reached $20.2 billion, down 4.7% over the same period in 2008.
Commodity group of fuel, mineral is not affected by the market share but
affected by the market prices. Export turnover of this group reached nearly $ 5
billion, down 40.1% equivalent to $3.35 billion, which decreased $4.83 billion by
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reducing price and increased $1.48 billion by increasing amount.
b) The stock market and capital flows:
Vietnam's stock market has not entered into the system world stock markets so
there is just relatively small impact. Fearing that most foreign investors will
withdraw capital when their capital shrinking. Meanwhile, a non-small amount
of dollars will go out of Vietnam. Although the capital of foreign investors on
Vietnam's stock market is not much, only about 20% of the capital, but if they
withdraw they will massively affect the stock market immediately to Vietnam.
This will affect foreign exchange reserves and prices on the stock market.
Many studies have shown that, in the process of financial market fluctuations in
one or many developed countries, the global stock markets have linked levels
much larger than the period of stability
and Vietnam is no exception to that
rule. The concern for Vietnam's stock
market is the move of selling is more
than buying of foreign investors. This
total amount withdrawn from the
market by selling stocks and bonds
from early October 2008 is 932 billion
VND and about 11,000 billion VND for
bonds since early August, contribute
significantly to the a decline in the
market.
Besides, foreign direct investment (FDI) in Vietnam is also affected because
FDI in Vietnam mostly are loans, not equity, so if the investor does not settle
the loan disbursement, the loan disbursement will be difficult to implement.
With financial crisis spreading worldwide today, we can say most US and
European companies will reduce direct investment abroad, so the attraction ofFDI in these two markets in Vietnam are significantly affected. Moreover, the
cost of mobilizing global capital can be increased because the increasing Credit
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margin leads to the limitation of investment, and reducing consumption can
lead to reducing FDI disbursement. Most countries are now facing with economic growth slow or negative. Vietnam
also cannot escape these problems and inflation is still a potential problem
affecting the economic development of Vietnam in 2009. In addition, deposits of
foreign banks and domestic banks will be reduced due to monetary easing in
many countries to avoid falling into deep recession, foreign exchange flows will
be reduced and many economic activities will be in difficulty.
c) Economic growth and the unemployment:
According to the report of the organization the International Monetary Fund
(IMF) in 2009, world GDP growth is 0.5%, while the developing countries are about
3.3%. The situation continues much more bleak, unemployment rising, the budget
deficit in 2009 of the Government is very large, leading to government debt and the
risk of high inflation, the face of the world changed dramatically and profound.
These problems have seriously affected the economy of Vietnam. According to
statistics, in 2009, the economic situation markedly reduced growth:
GDP growth in 2009 is 5.2%, above the average of area, but is the lowest since
a decade (GDP growth is 6.1% in 2008 and 8.5% in 2007)
Industry and construction increased 1.5%, exports increased 2.4% (but mostly
rice and gold, if gold exports except the turnover exports declined by 15%)
The number of jobs reduce, unemployment rate increases, approximately 5million workers in the village business out of work.
According to calculations, in 2009, about 400-500 thousand employees in
business sector lost the job, the unemployment rate of Vietnam is increasing, from
4.64% (in 2007) to 5% (in 2008) and 6.5% in 2009. Status of enterprises: about 20%
delayed production, 60% has difficulty and just 20% is doing well.
The UN has reported that the economic sector of Vietnam's most heavily
affected is construction, followed by banks and other financial institutions. Many
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companies have to cut production level, labor force and these problems threaten to
ensuring jobs for employees.
2. Solutions of Vietnam Government:
The 2008-2009 financial crisis caused a global economic recession. In response
Vietnam, along with many countries in the Asia-Pacific region, implemented an
economic stimulus package.
The Vietnamese government provided an economic stimulus package in December
2008, and announced a second stimulus package for 2010 on 31 October 2009.
The first economic stimulus package was introduced on 11 December 2008 on urgent
measures to deal with the economic recession, maintain economic growth and ensure
social security.
The economic stimulus package involved both fiscal and monetary interventions with
a planned cost of US$ 6 billion focusing on boosting production and businesses;
strengthening exports; stimulating investment and consumption; guaranteeing social
security; and endeavoring to achieve an economic growth of 6.5% in 2009.
The four main components of the first economic stimulus package were:
Subsidized loan interest rates of 4% points to increase credit for
investment for enterprises.
It is a kind of short-term loan with maximum duration of 8 months that
enterprises will get interest rate assistance of 4% per Annum. This component
focuses on investment stimulus, create new jobs and increase domestic
consumption
Public investment package for aiding infrastructure and social services.
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This promotes investment in traffic infrastructure projects, accommodation for
workers or low-income people and health and education facilities such ashighways, airports, seaports, school and hospital.
Tax reduction for firms and tax exemption for individuals.
Several of tax reductions for enterprises such as Corporate Income Tax (CIT),
Value Added Tax (VAT). For individuals, personal income tax (PIT) is deferred
for 2009.
Social security package to support poor households.
Vietnamese workers who signed contracts of at least one year with foreign
companies, government companies or individual companies will be eligible for
unemployment insurance, up to 60% of the average salary of the employee.
Moreover, the Vietnamese government provided interest-free loan to
enterprises for paying salaries, social insurances their workers. Additionally,
workers can ask the local governments to pay their remaining salaries in case
their companies go bankrupt.
We want to give an argument to support the solution above:
All Vietnamese workers who signed contracts of at least one year with foreign
companies, government companies or individual companies are able to receive
unemployment insurance, up to 60% of the average salary of the employee.
All workers who are able to receive unemployment insurance of Vietnamese
government are protected from financial crisis which can make them become the most
vulnerable.
So, all workers who signed contracts of at least one year with foreign
companies, government companies or individual companies are protected from
financial crisis.
Now, we assign that:
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Vietnamese workers who signed contracts of at least one year with companies
as A Workers who are able to receive unemployment insurance of Vietnamese
government as B
Workers who are protected from financial crisis as C
And we have the Venn Diagram:
Look at the diagram, we can conclude that our argument above is valid
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Here are some major responses to the financial crisis in Vietnam:
April 2008 Resolution
Between March and August of 2008, with inflation running at some 28% p.a., fuelled
by significant capital inflows the year before,the Government had to implement strong
stabilization policies in order to cool the overheated economy.
Measures to restrain inflation, stabilize the macro economy and ensure social
security and sustainable growth
Tight fiscal policy to reduce the budget deficit
Reduced public investment, especially in state owned enterprises
Prioritized investment in the economic sectors
November 2008 Resolution
By November 2008, these policies had to be reversed in order to support economic
growth in the face of deteriorating global conditions.
Fiscal expenditure (VND 100 trillion, US$ 6 billion, 6.8 % of GDP) aimed at boosting
production and supporting businesses, strengthening exports:
4% interest subsidy on loans to small and medium enterprises (17 trillion VND)
Reduction in corporate income tax for small and medium enterprises (28 trillion VND)
Temporary refund of VAT for exported goods
Extension of time for payment of taxes
Deferment in recollecting advanced infrastructure construction capital (3.4 trillion
VND)
Provided advances for urgent projects (37.2 trillion VND)
Transfer of planned investment capital in 2008- 2009 (30.2 trillion VND)
Issue of government bonds (20 trillion VND)
Increased credit guarantee for enterprises (17 trillion VND)
Stimulus package of US$ 1 billion to subsidize interest-rates for short-term loan
contracts
Unemployment insurance for 60% of salaries
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March 2009 ResolutionThe fiscal stimulus targets to alleviate poverty and enhance efficient infrastructure
projects, rather than piecemeal tax and interest-rate relief for small-medium
enterprises. Pushing on with state-owned enterprise reform (particularly state-owned
commercial banks reform) would also add to fiscal sustainability.
Fiscal expenditure (VND 300 trillion, US$ 17.6billion, 21% of GDP)
Stimulating investment and consumption
Exemption on personal income tax from Jan to May 2009 Investment in infrastructure for housing, schools, hospitals
Tet bonus (200,000 VND or US$ 12 per poor person, up to 1,000,000 VND or US$
56 per poor household)
Support to 61 poorest districts
Housing support for the poor (around 0.5 million rural households to receive 7.2
million VND or US$ 400 each)
Support for low income civil servants
Measures to support manufacturing and export sectors
Guaranteeing social security
Launched an unemployment insurance scheme with effect from 1 January 2009
(limited eligibility)
Interest free loans to enterprises to pay salaries, social insurance or unemployment
subsidies for their workers If companies cannot pay workers entitlements, workers can ask local governments to
pay
Projects designed to support social security and welfare
A comprehensive revision of the Labor Code that should result in market-based rules
for employment contracts; employment of women, young workers and persons with
disabilities; working time; protection of wages; and labor inspection.
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These measures proved the governments efforts to deal with increasing
unemployment, decreasing of economic growth in Vietnam due to the global crisis.The authorities showed a degree of flexibility in policy-making that needs to be
maintained, and enhanced, for Vietnam to face the near-term challenges posed by the
global recession.Moreover, Vietnams GDP growth rate in 2009 stands at 5.2%, the
highest among Southeast Asian countries. Hence, there has been a clear-cut recovery
from the financial crisis, which is greater than any developed and many developing
countries.
We want to support our argument by using diagramming:
(1)These measures proved the governments efforts to deal with increasing
unemployment, decreasing of economic growth in Vietnam due to the global crisis.
(2)The authorities showed a degree of flexibility in policy-making that needs to be
maintained, and enhanced, for Vietnam to face the near-term challenges posed by the
global recession. (3)Moreover, Vietnams GDP growth rate in 2009 stands at 5.2%,
the highest among Southeast Asian countries. (4)Hence, there has been a clear-cut
recovery from the financial crisis, which is greater than any developed and many
developing countries.
We create a flowchart that indicates relationships of our argumentative support:
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3. Preventing the influence of US financial crisis from happening again in the
future:
To prevent crisis from happening again, there are more works need to be
improved:
One of the biggest issues of Vietnams human resources is lacking of both
quality and quantity.
When economic recession occurs, there is the fact that current salaries ofuntrained workers could not cover the extremely high cost living in the country's
major cities, making many workers return home to look for job, even at lower
salaries.
Besides that, Vietnam workforce also faces with increasing of unemployment
rate. To deal with these issues, Vietnam government should improve human
resources policy, provide more opportunities for workers to develop their skill
as well as give them chances to approach career in formations.
It is not only the way to help Vietnam overcome challenges and difficulties
arising from the current economic and financial crisis but also the answers to
improve living standard of Vietnamese people.
We rewrite argument above in simpler form:
If the unemployment rate increases in financial crisis, government must
improves human resources policy.
If government improves human resources policy to deal with financial crisis,
then Vietnam can prevent successfully financial crisis from happening again
and improve Vietnams living standard.
So, if the unemployment rate does not increases, Vietnam can prevent
successfully financial crisis from happening again and improve Vietnams living
standard
We assign that:
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The unemployment rate increases in financial crisis as a
Government improves human resources policy as b
Vietnam can prevent successfully financial crisis from happening again and
improve Vietnams living standard as c
Then, we symbolize our argument
a bb c--------
~a c
a b c ~a a->b* b->c* ~a->c C
1 T T T F T T T
2 T T F F T F T
3 T F T F F T T
4 F T T T T T T
5 F F T T T T T
6 F T F T T F F
7 T F F F F T T
8 F F F T T T F
The second issue is sustainable development. When we think of the world as a
system over time, we start to realize that the decisions of our
grandparents made on the farms continue to affect agriculture today; and the
economic policies we endorse today will have an impact on urban poverty in
the future.
The field of sustainable development can be divided into three parts:
a) Environmental sustainability
b) Economical sustainability
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c) Sociopolitical sustainability
a) Environmental sustainability:
Environmental issues are always a major global issue. Vietnams development
depends on a sustainable and healthy environment, and yet we have damaged the
environment in numerous ways. Therefore, we have to change. And the best
protection of natural assets will require coordinated efforts across all sections of
government, businesses, and every Vietnamese people. The productivity of
ecosystems depends on policy choices on investment, trade, subsidy, taxation, andregulation, among others. Therefore, if we want to develop, we have to think of the
environment.
We support above argument by using truth table:
Sustainable development is the way to prevent crisis from happening again.
Sustainable development does not allow environmental destruction and we have to
change the ways we treat to environment to be a sustainable development country.
So, sustainable development is the way to prevent crisis from happening again and
we have to change the ways we treat to environment to be a sustainable
development country.
We assume that:
Sustainable development is the way to prevent crisis from happening again is
x
Sustainable development allows environmental destruction is y
We have to change the ways we treat to environment to be a sustainable
development country is z
Symbolization:
x
~y & z
-------
x & z
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24
x y z ~y x* ~y & z* x & z C
1 T T T F T F T
2 T T F F T F F
3 T F T T T T T
4 F T T F F F F
5 T F F T T F F
6 F T F F F F F
7 F F T T F T F
8 F F F T F F F
b) Economical sustainability:
One of the most important parts of social in sustainable development is
economy. Still, there are some effects on the environment because of some
economical activities. Thus, an examination of the relevant issues must take into
consideration not only the economic policy framework but also environmental policy.The Vietnamese Government has to realize that the major tasks for economical
sustainable development:
The inflation which is also the most important mission has to be reduced.
The macro-economy must be stabilized
Ensuring social security and sustainable growth
c) Sociopolitical sustainability:
Socioeconomic development which is a process of improving living conditions
for human by goods production, social relationship innovation, and cultural quality
improvement also needs to be concerned by Vietnam.
While the global economic downturn is having an effect on trade and
investment, it also highlights the importance of triangle of sustainability: society,
environment and economy. Global economic crisis provides opportunities for
sustainable development, and sustainable development provides the way to prevent
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crisis from happening again. Last but not least, sustainable development and
improving human resources are extremely long-term tasks that require the efforts ofevery Vietnamese people.