On July 8, 2020, under Saudi G20 Presidency and the Paris Club, a Ministerial virtual conference was held to discuss plans to tackle global debt and promote sustainable financing for developing countries in the wake of the coronavirus disease (COVID-19) pandemic. Vietnam attended the Conference as President of ASEAN. Deputy Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) headed the Vietnamese delegation and delivered a speech at the Conference.
The Conference was co-chaired by Mr. Mohammed Aljadaan, Minister of Finance of the Kingdom of Saudi Arabia, Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), and Mr. David Malpass, President of the World Bank Group (WBG). The conference brought together Finance Ministers and Central Bank Governors of the G20 member states, heads of the international organizations such as IMF, WB, OECD, as well as prominent experts and scholars.
The Conference was organized within the framework of the G20 Financial Track, with discussions centered on policy coordination between the international financial institutions and different countries and regions in order to support those countries to enhance their financial capabilities to cope with the impacts of the pandemic.
The Conference discussed challenges around international capital flows volatility - as exacerbated in emerging market economies by the unprecedented COVID-19 crisis - and possible policy responses to help restoring sustainable flows of capital and mobilizing robust financing for development, which is included in the G20 action programs such as the G20 Debt relief/deferral initiative for developing and emerging economies, the African Investment Program, etc.
SBV Deputy Governor Nguyen Thi Hong speaks at the Conference
Speaking at the discussion panel on policy solutions to support the recovery of capital flows into emerging markets, SBV Deputy Governor Nguyen Thi Hong said: “Unsimilar from the past crises, such as the 1997-1998 Asian Crisis or the 2008-2009 Global Financial Crisis, when capital could still flows from the areas affected by the crisis to the unaffected areas, this Covid-19 crisis is affecting each and every country throughout the world. In the recently released World Economic Outlook (WEO), the IMF forecast negative growths in all regions under the impacts of the pandemic. Therefore, besides the conventional factors, the global capital flows are also influenced by other factors such as disease prevention capacity, pre-Covid-19 economic foundation, and the structure of the capital flows.
In case of Vietnam, the SBV Deputy Governor shared that GDP growth in the first 6 months of 2020 increased by 1.81% compared to the same period of 2019, of which, the second quarter’s growth was only at 0.36% - the lowest level in the last 10 years, but still maintained at a positive level while other economies and regions were experiencing negative growths. In terms of the capital structure, FDI accounts for the biggest proportion, while indirect investment only takes up a small amount. Therefore, the impacts on the capital flows have been quite inconsiderable. In fact, the Vietnamese market saw a recovery of the capital inflows in the second Quarter, thanks to the success of the Government and the relevant agencies in containing the disease, maintaining the macroeconomic stability, helping to boost the investors’ confidence.
Toward the end of her speech, the SBV Deputy Governor called on the G20 countries and international organizations to share information, cooperate in research and support developing countries in the plans for recovering the economic growth in order to further spread the efforts and cooperation of the G20 with the goal of bringing the global economy back to a path of strong, sustainable, balanced and inclusive growth.
VA