Final Report (Fix)

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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Vietnam economy in US financial crisis Critical thinking

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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_Reserve


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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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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.

Documents

Final Report (Fix)