Rescue agriculture production or estate market?
Rescue agriculture production or estate market?
Arguments have been raised about who the government should gather strength to rescue, real estate developers or farmers, if they both are sinking.
Both are in big difficulties
The real estate market has been hibernating for a long time, which has pushed a lot of real estate developers against the wall. Meanwhile, the agriculture production is also facing big difficulties with the rice price dropping to the deepest low. Who the government should rescue now, the real estate market or agriculture production for the sake of the national long term benefits?
The prolonged debate on whether the government should spend trillions of dong to warm up the current frozen real estate market has yet come to an end.
Some experts believe that the government should not try to save all unprofitable enterprises, and that it should not interfere in the enterprises’ operation. The real estate price falls have harmed real estate developers, but would have paved the way for people to buy houses as more reasonable prices.
However, others said the death of real estate developers, if it occurs, will lead to the collapse of many other business fields in the national economy, including the building material manufacturers. Especially, commercial banks would suffer most because their loans to real estate developers would become irrecoverable, while the bad debt would make the national economy performance get stuck.
It seems that the government remains in the two minds of pumping or not pumping capital to rescue the property market, with no strong moves towards the market made so far.
Meanwhile, the government has also been urged to rescue the agriculture production which is meeting big challenges.
In order to find the answer to the question what to rescue, agriculture production or real estate market, analysts tried to find out what business field brings bigger benefits to the national economy and they leaned towards the agriculture production.
Agriculture production has always been playing a very important role in the national economy, because it makes up GDP, ensures the life of the workers in the field and ensures the fairness in the economic development of the nation.
In 2012, when Vietnam got burdened with the bad debts and the high inventories, it was the agriculture production which helped ease the burden on the state budget and strengthen the trade balance surplus.
Vietnam’s trade surplus in the first months of 2013 has been partially attributed to the high exports of farm produce and seafood. Vietnam is now the second biggest rice and coffee exporter in the world.
Which way to follow?
The limitation in the public investment in agriculture and the inability to access bank loans both have led to the low agriculture added value. Vietnam has been selling rice at the lowest price levels in the world, which obviously means that Vietnam cannot use up its natural advantage.
It’s obvious that the agriculture production has bigger influences to the national economy with 70 percent of Vietnamese population earning their living on agriculture production. Meanwhile, the real estate market only relates to a small labor force. In principle, the government needs to take care for the benefits of the majority of people.
There are four scenarios for the government’s actions. First, the government would save both. This proves to be unfeasible in the context of the limited financial resources.
Second, the government should let both of them struggle to survive. If so, both of them will die
With the third and fourth scenarios, the government would gather strength to save one of the two.
vietnamnet
