The fiscal omens arising out of Vietnam are not good. Talks of bank runs, the arrests of corrupt officials and an end to an economic era marked by robust growth say it all. More so, is the prospect that Hanoi will seek outside help.
The idea that Vietnam could seek a bailout to resolve debt incurred by the county’s biggest lenders from the International Monetary Fund (IMF) was raised by a Parliamentary Committee but the idea was then almost immediately dismissed by the country’s central bank.
This prospect remains just that, but it did increase the heat on the Vietnamese government to spell out exactly what is needed to correct fiscal imbalances and put the economy back on a secure footing.
Communist governments are not known for making such declarations, which would be mandated if the government was to seek outside help, like an IMF bailout.
Additionally, Chinese finances are also looking very shaky as was detailed in a must read column by Minxin Pei who recently wrote in The Diplomat that we should be worried about the consequences stemming from years of easy credit in China.
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