The bigs new of the day was the lifting of prices for fuel in Vietnam by the government and the fears of inflation that may result. The dollar is fetching a higher price in the black market again.
Umm, I do not think they made a smart move here especially with a population that is still young to market economics. I expect my sinh to, pho, cafe sua da, etc., to be increased another 1000-2000 VND in the next couple of days.
- Vietnam lifts fuel prices, raises inflation risk
- Petrol price surges to VND19,000/litre, dollar price skyrockets
For a funny news link, the Vietnamese Coast Guard seized about 4 tons of rusty Vietnam War-era bullets from fishermen. The fishermen wants to sell the bullets as scrap metal.
What does their being young to market economics have to do with it? I’m pretty sure that they will realize that when their expenses go up the price must also go up. The sooner the government stops subsidizing and otherwise screwing with the market over there other than to maintain a level playing field and trust in the market the better off everyone will be.
Yeah, actually, subsidizing things is worse. More corruption and grief in the long run.
By the way, I’m glad you ditch the red header…it looks soooo….errr.
While I don’t carte blanche think that government gas subsidies screws with the market too much – hey, America subsidizes the snot out of lots of things, inclusive of gas – or creates a lesion for corruption to infect society’s corpus, it does do one inarguable thing: drain the government’s coffers.
Cutting back on subsidies is an austere measure that is welcomed by the international financial NGOs. It’s a ‘top-of-the-list’ recommendation of government steps to fight inflation. Lower government spending leads to lower inflation. 30% gas price increase is a big bullet to bite, but so was a nearly 50% increase in interest rates over one month this early summer.
I’m with Kevbo on this one.
VN is getting hit hard (of course, at the fault of the gov’t), but since it has been subsidizing thus far, might as well keep subsidizing until the end of this year.
Morale has been low and this is going to make it even worse.
All of my staff have been begging me to increase their allowances. Of course, I have to do whatever I can to help.
But the gov’t doing this just made businesses take the burden and it has the potential to scare off potential investors.