On May 28, at a working session with the Central Policy and Strategy Committee, General Secretary To Lam requested to eliminate the monopoly of gold bars on the principle that the State still manages but can grant licenses to many qualified enterprises to participate in production. The General Secretary emphasized that the mechanisms and policies for managing the gold market in recent years have been actively adjusted and improved, but are still slow to innovate and have not kept up with the development of the market and reality. Therefore, it is necessary to soon innovate and improve these mechanisms and policies.
Monopolies create gold price differences and distort the market
Sharing with Cong Thuong Newspaper on the sidelines of the National Assembly, delegate Hoang Van Cuong (Hanoi Delegation), Economic and Financial Committee of the National Assembly said that the monopoly on gold bars was formed from Decree 24/2012, aiming to combat the goldification of the economy, when many people used gold bars as a unit of payment for buying and selling vehicles, assets or borrowing.
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| Delegate Hoang Van Cuong ( Hanoi Delegation) |
Delegate Hoang Van Cuong emphasized that this situation led to a situation where people rushed to buy and hold gold, making money meaningless. Decree 24 was issued, implementing a monopoly on gold production, trading, and import and export to avoid the phenomenon of free gold trading. The State has a monopoly on the production of gold bars with national brands to supply the market.
According to delegate Hoang Van Cuong, Decree 24 has been very effective, helping to eliminate the use of gold as a unit of payment. And up to now, people have used Vietnamese Dong for all trading activities. " However, the monopoly on gold bars and the monopoly on gold imports have also led to a difference in gold bar prices in the current period, because the quota on importing raw gold has limited the supply of gold to the market. Especially when the VND exchange rate fluctuates in the direction of strong depreciation compared to the USD, forcing the State Bank to limit gold imports so as not to put pressure on the VND," said Mr. Cuong.
On the other hand, the monopoly also leads to SJC gold having a high brand name, causing a price difference, higher than other brands by several million VND. That is unusual, because gold has the same value.
Delegate Hoang Van Cuong acknowledged that due to monopoly, the amount of gold supplied to the market is limited; when supply is low and demand is high, of course, the price of gold increases to balance supply and demand. Monopoly also leads to a very high price difference between the domestic market and the world market due to lack of connectivity.
"That is the consequence of the monopoly on gold bars and the monopoly on gold import and export according to Decree 24," said delegate Hoang Van Cuong.
Delegate Hoang Van Cuong said that, at this point, the economy is no longer at risk of gold-ization. Therefore, it is not necessary to monopolize the business, import and export of gold bars, but rather to allow large, truly capable and reputable companies and enterprises to participate in the business, production, import and export of gold bars.
" When there is competition, the monopoly on gold prices will be broken and there will be price competition, against the situation where Vietnam's gold market is one market, one price, limiting the difference between different types of gold and the difference between domestic gold prices and world gold prices, " said delegate Hoang Van Cuong.
In the context of complicated gold price developments, with price differences between domestic gold brands and between domestic and world gold prices, General Secretary To Lam's request to eliminate the State monopoly on gold bars, allow more businesses to produce gold bars, expand controlled imports and study the application of taxes on gold trading transactions is extremely necessary.
According to delegate Hoang Van Cuong, the mechanisms and policies for managing the gold market in Vietnam have been adjusted and improved positively in recent years. However, it is also necessary to frankly acknowledge that the mechanisms and policies for managing and regulating the gold market are still slow to innovate, failing to keep up with the development of the market and the demands of reality.
This has led to the gold market being poorly managed, not in line with the general supply and demand developments in the world market, causing consequences for the economy, especially gold smuggling and foreign currency outflows.
Delegate Hoang Van Cuong assessed that the existence of monopoly in the market does not stimulate competition and promote healthy gold trading activities. Management mechanisms and policies have not created motivation to mobilize idle resources among the people for socio-economic development, people invest a lot in gold; management methods are still mainly traditional, slow to innovate, lacking modern business forms, keeping up with world trends.
Mr. Cuong said that, following the direction of the General Secretary, the authorities need to seriously implement the elimination of the gold monopoly. At the same time, use tax policies to regulate gold import and export, manage gold, open up new business methods for trading through the floor and have many channels to mobilize gold. This will ensure stability of the gold market and return the gold market to its true meaning.
Need to expand gold production and import according to market principles
Delegate Tran Anh Tuan (Ho Chi Minh City Delegation), Economic and Financial Committee of the National Assembly, said that General Secretary To Lam's direction on eliminating the monopoly on gold bars is very appropriate.
Delegate Tran Anh Tuan said that currently, gold bar production, distribution, consumption and import activities are all under control, which is not in accordance with market principles, causing difficulties in handling and resolving the difference between domestic and world gold prices as well as gold bar smuggling.
According to delegate Tran Anh Tuan, if handled according to market principles, creating conditions for businesses to be able to produce and trade gold like other goods, the difference in domestic and international gold bar prices will decrease.
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| Delegate Tran Anh Tuan (Ho Chi Minh City Delegation) |
Delegate Tran Anh Tuan said that we have now implemented control of gold bars right from the time of import, according to inter-sectoral coordination and application of information technology. Now we must create conditions for many licensed entities to participate in import according to their capacity, thus creating a more abundant supply, creating a more balanced price level with the world. The General Secretary's direction will create better conditions for stabilizing gold prices, controlling and limiting gold bar smuggling across the border.
Delegate Tran Anh Tuan emphasized that it is necessary to expand and allow qualified enterprises to produce gold bars, not restrict them. The expansion is based on the principle that the State still maintains general control, applying technology to control from input to market. At the same time, gradually removing barriers so that the gold bar market can circulate smoothly like other goods, will create an abundant supply, overcoming current obstacles in the gold market.
At the working session with the Central Policy and Strategy Committee on mechanisms and policies for effective management of the gold market, General Secretary To Lam requested to complete the legal framework, promptly amend Decree 24/2012/ND-CP in the direction of marketization with a roadmap and strict control; create a more effective connection between the domestic gold market and the international market. Eliminate the State monopoly on gold bar brands in a controlled manner on the principle that the State still manages the production of gold bars, but can license many qualified enterprises to participate in the production of gold bars to create an equal competitive environment, thereby helping to diversify supply sources and stabilize prices. |
Source: https://congthuong.vn/xoa-doc-quyen-vang-mieng-mo-cua-thi-truong-chan-mot-minh-mot-gia-389856.html
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