GOVERNMENT’S REPORT
ON SOCIO-ECONOMIC PERFORMANCE IN 2008
AND TASKS FOR 2009
(presented by PM Nguyễn Tấn Dũng at the 4 th session of the 12 th National Assembly,
October 16, 2008)
_______
Leaders of the Party, State and Việt Nam Fatherland Front,
National Assembly deputies,
Revolutionary veterans and distinguished guests,
Compatriots, comrades and friends,
Prior to this NA sitting session, the Government sent to all deputies the Report on socio-economic situation in 2008 and socio-economic development plan for 2009; the Report reviewing the State budget implementation in 2008 and the budget estimate for 2009; together with 16 other topical reports.
Today, acting on behalf of the Government, I would like to brief the National Assembly and compatriots nationwide the main socio-economic issues in 2008 as well as major goals, tasks and solutions of the socio-economic development plan for 2009.
Part I
Socio-economic evaluation in 2008
The socio-economic development plan in 2008, the hinge year of the five-year plan 2006-10, was designed in the context of huge opportunities and advantages, following great achievements after over 20 years of innovation, especially in 2006 and 2007. As a result, the plan is supposed to fulfill numerous major targets of the five-year plan within 2008, paying the way for the early conclusion of the five-year plan 2006-10.
Since late 2007, negative changes in the international economy, domestic difficulties, and poor management resulted in economic problems in the first quarter of 2008, severely affecting production, people’s livelihood and the macro-economic stability.
We seriously analyzed and took into consideration those problems, and decided to change major tasks to inflation curbing, macro-economic stability, social security, and reasonable and sustainable growth, of which inflation curbing was the top priority. We already readjusted growth norms and have made all efforts to realize eight key solutions [1] .
In the following months, the world economy continued to experience recessions and complicated changes, including soaring prices and global-scale inflation. Meanwhile, natural disasters and epidemics caused severe damages nationwide. Consequently, the task of inflation curbing became more difficult. The Government has proactively followed the realities, assessed the circumstances, collected sound opinions, highlighted its responsibility, and drastically directed the implementation of the set targets and tasks.
Under the leadership of the Political Bureau and the Party Central Committee (CPV), the support and supervision of the National Assembly, unanimity and joint efforts of the entire political system, people and business community, the socio-economic situation has so far changed in a positive way, despite various difficulties. On the basis of achievements gained during the past nine months, and the predictable performance in the rest of the year, the Government would like to evaluate the implementation of the socio-economic plan in 2008 as follows:
I. MAJOR PERFORMANCE
1. Initial considerable results in curbing inflation and stabilizing macro-economy
A group of eight solutions was promptly and drastically carried out, focusing on monetary and fiscal tightening; strict control over import while promoting export; enhancement of price management; speculation prevention and market stabilization.
Accordingly, we have applied such instruments as interest rates, compulsory reserves and compulsory treasury bills in a cautious and flexible way; readjusted credit structure and strictly supervised loans in real estate business, securities, consumption so as to pour capital in production and export, ensure liquidity of banks and the economy as a whole, and curtail the total means of payment and total credit debts around 10% and 30% respectively [2] ; tightened the management over commercial banks and assisted weak ones; introduced sound regulations to improve effectiveness and safety as well as lay the foundation for licensing new banks. State-owned commercial banks have made significant contributions to conducting monetary policies. Interest rates have come more stable, tending to go down.
As complicate fluctuations in exchange rates resulted in psychological instability in the society, the Government affirmed not to devaluate the Vietnamese dong, made public foreign currency reserves, applied flexible exchange rates with reasonable ranges, properly carried out strong enough interference into supply-demand relations, tightened control over foreign currency business and sharply narrow the excess of imports over exports. Thus, the exchange rates between VND and US$ and other foreign currencies were stabilized.
In spite of soaring prices, the Government did not raise total investment, frozen and extended the schedule of over 3,100 projects worth around VND 37,000 billion of State budget and state-owned enterprises (SOEs) [3] ; cut approximately VND 9,000 billion from the governmental bond and saved VND 2,700 billion of regular spending in State budget beneficiaries.
State budget collection in 2008 surpassed the estimate [4] , well serving the expenditure plan, enriching the sources to ensure social security, compensate for losses due to higher oil prices, and reduce overspending of the state budget [5] .
In the early months of 2008, the trade deficit dramatically surged, standing at US $8.3 billion in the first quarter, equivalent to 62.4% of export turnover, threatening the macro-economic stability, particularly the supply-demand balance of foreign currencies and exchange rate. So, the Government instructed to boost up export and strictly monitored import with a view to curbing the excess of import over export [6] . At the end of the third quarter, the trade gap was US $15.8 billion, equal to 32.5% of export turnover. The overall excess of import over export this year is estimated to reach around US $19 billion, comprising 32.5% of export turnover (similar to the 2007 figure).
The Government also tightened its management of prices and markets, enhanced anti-speculation and smuggling, soundly readjusted oil and gas prices in September in line with the market rules, without any compensation for losses.
International balance of payment was ensured. Trade surplus is forecasted to reach around US $2.7 billion in 2008. Foreign currency reserves were multiplied, helping to stabilize the macro-economy. Since June 2008, CPI has been on gradual decline [7] , standing around 0.18% in September, averaging 21.8% in the nine months and is supposed to reach around 24% in 2008.
2. Fairly high economic growth rate maintained in the context of high inflation
The GDP growth is estimated to be about 6.5-7% in 2008 [8] , in which agriculture, industry-construction, and services will grow by 3.5-3.9%; 7.3-7.5% and 7.2-7.8% respectively. The GDP per capita will reach over US $1,000 [9] . Despite numerous difficulties caused by natural disasters, epidemics, and higher input costs, outstanding results have been gained in agriculture sector: production value was estimated to surge 5.1% (only 4.6% in 2007); rice yield reach around 2.6 million tons, the ever highest increase [10] ; and fishery up approximately 9.0%. Industrial production value has grown 16.2% (last year, 17.1%). Many services have developed well. The total retail sales of commodities and services have gone up 31% (22.7% in 2007).
Sharp growth rate will be seen in export this year. The export turnover stood at US $48.6 billion in the first three quarters, up 39% against the same period of 2007 (19.4%). The figure is expected to be US $65 billion, an increase of 33.9%, the highest leap over the last ten years (only 21.9% in 2007). Export surge was resulted from rising prices, bigger quantity of commodities (around 30%) and market expansion. It was a basic factor serving to narrow the trade gap and consolidate economic growth, showing internal strength of all production sectors and dynamic capacity of the Vietnamese business community when the country is integrating into the world economy.
Most State-owned enterprises (SOEs), particularly economic groups and corporations, have performed beyond their set plans, significantly contributing to economic growth, inflation curbing, supply-demand balance of essential commodities and market stability. The people-run sector, mainly small and medium enterprises (SMEs), have achieved positive outcomes with a 22% expansion of industrial production; larger quantity of new businesses [11] . The total investment capital in this sector is estimated to be around VND 180 trillion this year, up 7% against that of 2007. With the registered capital of over US $60 billion and the disbursed sum of US $10-11 billion [12] in 2008, FDI is expected to increase three times higher than 2007. Việt Nam has also got larger ODA commitments [13] ; by the end of September, donors signed agreements to provide over US $1.8 billion and over US $1.4 billion was disbursed, meeting 74.5% of the year plan. These have been resulted from improved investment climate, reflecting investors’ and donors’ stronger confidence in the promising prospect of Việt Nam’s development, proving the sound guidelines of the Party and State to curb inflation while maintain proper growth and creating preconditions for high and sustainable development in the following years.
3. Social security drew attention and was fruitfully realized
Since early 2008, apart from directing the implementation of fundamental and long-term programs and projects on social security under the five-year plan (2006-10), we have also attached importance to addressing urgent issues of social security in three directions: (i) raising the base-line of assistance, (ii) expanding welfare beneficiaries, and (iii) introducing new policies [14] .
In 2008, around VND 19,800 billion is directly allocated from the State budget to assist beneficiaries of social security policies, VND 14,700 billion bigger than the amount spent last year. Furthermore, as of September 2008, 40,000 tons of rice were delivered without fee to the areas hit by natural disasters; about VND 1,200 billion were saved through exempting or reducing irrigation fees, other charges and abrogating some collections mobilized among people. Through 12 programs on preferential credits [15] , aid was given to poor households, ethnic minority people, and others in order to promote production, generate more jobs, boost up labor export, build houses, provide clean water, maintain environment hygiene, and sponsor poor students. The total preferential loans were VND 20,000 billion and VND 28,000 billion in September and 2008 respectively.
This year, around VND 28,900 billion from the State budget has been spent to raise the minimum salary, retirement pension, and allowances given to low-income people and other social welfare beneficiaries.
In the wake of natural calamities, diseases and high inflation, those assistances have helped lessen difficulties in production and people’s life.
4. Great attention given to education and training, healthcare, culture, information work, and environment protection
Education and training saw positive signs in both quality and scope. Forty-six provinces have been recognized as meeting standards of lower secondary education universalization, with seven new ones compared to 2007. The fight against negative acts in exams has been carried out successfully. The percentage of high-school graduates this year was higher than last year. On-demand training at universities and colleges has been boosted up. So far, world-class teaching programs have been applied for 23 specialties in sciences, technology and economics at universities. The construction of high-quality universities is being conducted. Credit policies backing poor pupils and students are highly appreciated by the public opinion.
Mechanisms to manage science and technology have been reformed. The fulfillment of some scientific and technological tasks has positively contributed to making policies on socio- economic development. Measures on intellectual property protection have been effectively taken.
The healthcare system has been reinforced, particularly at district level, helping decompress higher-level hospitals. Healthcare in hamlets and communes has been promoted [16] . Medical examination and treatment have been improved. Epidemic prevention, especially HIV/AIDS and emerging diseases, has drawn much attention.
Information work and culture have also reaped new successes, better meeting the demand for information, enriching people’s cultural and spiritual life, and effectively serving the fulfillment of political and socio-economical tasks in line with the guidelines of the Party and State.
Practical measures, especially inspection, have been taken to facilitate the protection of natural resources and the environment.
5. Administrative reform, anti-corruption, thrift practice, and anti-prodigality changing positively
The action program realizing the Resolution of the 5 th Plenum of the 10 th Party Central Committee on boosting administrative reforms, upgrading effectiveness of State apparatus, has been drastically conducted. The organizational structure of ministries and local government has been perfected. Administrative expansion of Hà Nội has been strictly supervised in order to ensure the stable and uninterrupted operations of the Capital.
Fourteen types of troublesome administrative procedures are reviewed. Business registration, tax enumeration, vehicle registration, and exit-entry procedures have been simplified in an open and transparent direction. The lessening of thirty-three procedures on construction investment is considered. Numerous ministries and localities have succeeded in applying ‘one-stop shop’ mechanism or working on Saturday to meet people’s legitimate requirements. Some public services have been socialized with positive results.
Ministries and localities have implemented plans and programs on anti-corruption, paying attention to the preventive work and imposing strict punishments on violations. The central and local steering broads for anti-corruption have been strengthened in terms of organization and operation. Institutional improvement, propagation and dissemination of laws on anti-corruption have been enhanced. Corruption cases have been investigated and addressed in line with the law.
All sectors, enterprises and people have warmly supported thrift practice and anti-prodigality. Numerous enterprises have managed to save production costs and reduce products’ price. The 10% saving sum in the regular spending over the last eight months (equal to 25% of the standby State budget in 2008) has been used to carry out policies on social security, prevention of natural disasters and epidemics and their consequences.
6. Diplomatic activities and international economic cooperation with significant scores
The diplomatic orientations endorsed by the Party and State have been fruitfully put into reality, serving to reinforce and raise Việt Nam’s status on international arena, contributing to the country’s socio-economic development.
Many bilateral diplomatic activities have been promptly done, especially through official visits made by senior leaders of the Party and State with significant outcomes. Accordingly, Việt Nam’s ties with its neighbors, big powers, and traditional friends have been deepened and stabilized. Land demarcation and landmark planting have been carried out properly.
Multilateral activities have been boosted up. As a non-permanent member of the United Nations Security Council for the first time, Việt Nam has made considerable contributions and successfully chaired the Council. In addition, it has taken a responsible part in reinforcing and enhancing cooperation among ASEAN member states and between ASEAN with partners.
The mobilization of official development aid (ODA), foreign direct and indirect investment (FDI and FII) has been carried out effectively. Việt Nam took initiative in negotiating for and signing agreements on free trade areas as well as in assisting enterprises to expand their markets.
Culture-based diplomacy and externally-orientated propagation has been fostered to advertising and embellishing the images of Vietnamese country and people in the world.
The work on overseas Vietnamese has been highlighted. Citizen protecting funds were founded, visa exemption applied for overseas Vietnamese, and Vietnamese teaching sped up. We are considering the permission of more entities to purchase houses in Việt Nam and the revision of the Law on Nationality in order to bring the overseas Vietnamese community closer to the fatherland.
7. Socio-political stability, national defense and security, social order and safety guaranteed
People’s armed forces have overcome various difficulties to conclude their mission of protecting independence, sovereignty, and territorial integrity, and maintaining political security, social order and safety. Prevention of crimes and social evils has been pushed up. The number of traffic accidents, deaths and injuries has sharply decreased compared to last year [17] . People’s complaints have been addressed seriously and properly.
The policies on ethnic and religious affairs of the Party and State have been better realized, ensuring the right of people’s belief and religious freedom. All actions undermining social order and safety have been strictly punished by laws.
The Việt Nam Fatherland Front, mass organizations and authorities at all echelons have effectively worked together in mobilizing citizens to join efforts to curb inflation, overcome difficulties, develop production, build up cultural life, and unite all ethnic groups and religions to serve the cause of national construction and protection.
Facing challenges and difficulties, those significant achievements have been resulted from the great efforts of the entire Party, people, army and the political system as a whole.
II. WEAKNESS AND SHORTCOMINGS
Besides the above positive significant achievements, we are also aware of predominant weakness and shortcomings, including:
1. High inflation, big trade deficit, unstable macro-economic balance
Although it has been controlled and is slowing down gradually, consumer price index (CPI) is still two times higher than the figure of 2007, standing as the highest during the past ten years. Trade deficit has dramatically been reduced but remaining at a high level. The macro-economic balance has been stabilized but not really sustainable.
The country's high inflation rate is attributed to the world's high prices. However, it mainly came from our improper economic and investment structures as well as ineffective monetary and fiscal policies; from low quality and sustainability of the economy; and from inadequate macro-economic guidelines and management.
2. Effectiveness and competition of the economy are low, production and business face difficulties, economic growth norms are difficult-to-reach
Many development projects are not based on full exploitation of comparative advantages; investment efficiency is low, especially public investment’ the co-efficient ICOR has not been improved [18] ; economic structure is slowly shifted. Infrastructure and human resource quality have not met development requirements.
Inadequacies in investment and disbursement mechanisms are slowly repaired, delaying the construciton, raising costs and reducing effectiveness. SOEs show ineffeciency and many weaknesses in their performance, especially their management and use of resources; their equitization is slow and far behind the schedule.
Sky-rocketing prices and interest rates cause a lot of difficulties to investment and business activities; businesses, especially small and medium enterprises (SMEs), have few opportunities to access to credit capital. Production, purchase, preservation, processing and circulation of agro-products are inefficient. So, economic development has slowed down and it is difficult to gain the economic growth of 7%.
3. People's life, especially the low-income, the poor, and those in remote and disaster-hit areas, is difficult
High inflation, natural disasters, epidemics pulled down people's net income, especially poor households. The rate of re-impoverishment increased; there remain a lot of districts with high rate of poor households. The norm for poverty reduction was lower than the set target (13.1%/11-12%).
The population growth rate was 1.19%, higher than the target of 1.14%; in the low living standard areas, the figure is more higher, causing more difficulties for poverty reduction. Fertility reduction rate just reached 0.1‰, lower than the plan (0.3‰).
4. Some burning social issues were slowly addressed, with insignificant results. In 2008, new job creation is estimated to be under the set target (1.615/1.7 million people), pressure of employment becomes more and more acute. Accidents at work and occupational diseases tend to increase. Work disputes and strikes occur more often but an effective mechanism to completely solve these issues has not been adopted.
Claims and complaints on land withdrawal, compensation, and resettlement, are not timely dealt with, leading to prolonged lawsuits.
Traffic accidents, although going down, continue to cause great number of deaths and injuries. Traffic jams in big cities tend to go up. Prostitution and drug abuse in some localities are still complicated.
5. Administrative reforms have not created breakthroughs; anti-corruption, thrift practice and anti-prodigality have brought about poor results. Institutional building is slow, with poor quality. The personnel streamlining is not done well. Administrative procedures are still troublesome and applied in an arbitrary and unclear way in some cases. Many civil servants harass and trouble civilians. In some localities, leaders ignore administrative procedures reform, anti-corruption, thrift practices and anti-prodigality. Investigation, prosecution and execution of some corruption cases are slowly carried out.
6. Political security and social order in some localities are still complicated
Hostile forces and subversive elements continue to make corrupt use of democracy, human rights, religion and ethnic issues to excite complaining crowds, demonstrations, and illegal requirements, causing social disorder and undermining the whole-people solidarity.
Criminality has not been dramatically reduced and is very acute in some localities. Law breaking among adolescents becomes more and more alarming.
7. State management and implementation still not meet the requirements
State management of the market economy contains many inadequacies. Business and investment environment have many barriers. Speculation, smuggling, counterfeit and unsanitary product trading are burning issues. The habitat degrades seriously in some places. Many infringements of environmental laws are late discovered and addressed. Leadership and management are not really drastic. Social disciplines and rules are not strong enough.
*
* *
The late 2007 and 2008 were a special period. Following great achievements and vast opportunities brought back by Việt Nam’s admission to the World Trade Organization (WTO), we are facing numerous severe difficulties and worries about the country’s prospect and people’s livelihood. From enjoying high growth rate and low inflation continuing for years, we have been challenged by high inflation and stagnant growth. Although our inflation rate is not galloping like in the 80s of the previous century, it is difficult to solve this problem when our economy has deeply integrated into the world's economy which is also being hurt by high inflation and recession. Through actual operations, some initial lessons can be drawn:
Firstly, it is necessary to mobilize the general strength of the whole political system and of the entire people to curb inflation, stabilize macro-economy and maintain proper and sustainable growth. High inflation has badly damaged production and people’s life, threatening macro-economic stability. Curbing inflation is actually the country's top task, requiring the utmost unanimity of the whole political system in considering the situations, analyzing causes, setting targets, tasks and solutions, creating a high consensus in consciousness and action of the whole Party and people to strive for the country's interests under the Party’s leadership and State’s management. Democracy must be brought into play; social principles and rules ensured; information work and propagation well carried out to disseminate the Party and State's guidelines and policies to every citizen. At the same time, we must attentively listen to and accept all sound ideas to perfect policies and solutions. This is considered the decisive factor and a significant lesson of pursuing democracy and developing the nation’s general strength to attain the above-mentioned great achievements.
Secondly, special attention must be given to the quality of growth, competitiveness and sustainability of the economy. Developing from a low starting point, Việt Nam always faces the risk of lagging behind economically. The requirement for high growth is very urgent, however, it must be realized through gradually improving such factors as technique, technology, quality of human resources, productivity, advanced management and the macro balance to raise effectiveness and sustainability of development. We were quite slow in transforming the economy in this direction. Despite our high growth rate for years, it is almost the extensive growth thanks to the soaring investment flow, especially public investment and SOEs’ investment. So we have had to loosen monetary and fiscal policies for a long time, making investment efficiency low, the co-efficient ICOR high, the economic restructuring slow, and economic competitiveness weak. These are the deep causes of high inflation and large trade gap, threatening macro-economic stability.
Thirdly, we must be consistent with the pursuance of the market economy, at the same time attaching importance to the role of the State management. For a long time, we maintained subsidies for petroleum, electricity, coal and some other key products and services; slowly adjusted prices in line with market rules; not took into proper consideration the establishment of an equal competitive environment for all enterprises in all economic sectors; delayed the synchronous formation of market economic elements. Thus, resources were allocated and used improperly, leading to waste, requiring great compensation from the State budget, and making the performance of enterprises and the economy as a whole low. These realities require us to drastically apply market mechanism, abrogate price subsidies, flexibly regulate prices in line with supply-demand principles and quickly found a transparent and equal business environment. However, on the other hand, to mitigate negative effects of the market economy, especially in such a transitional one like Việt Nam, State management must be enhanced in order to control prices, prevent speculation and other illegal business activities, use the State’s economic strength to intervene into the market when necessary, ensure social security and assist the most vulnerable groups. It is necessary to improve the country’s economic; resolutely renovate and raise the performance of SOEs, making them become a strong and effective tool to regulate the market and better serve the requirements of sustainable development. By carrying out this process, we can draw experience to perfect the socialist-oriented market economy.
Fourth, great attention must be given to economic prediction and analysis. Although we have various bodies and agencies in charge of economic prediction and analysis, this work has not been highlighted and not conducted effectively tightly. There is no sound mechanism to consult independent experts. Consequently, in the previous years we were not fully aware of implicit internal factors which could lead to inflation and threaten macro-economic stability. We also failed in timely predicting great impacts caused by global economic fluctuations on our economy to adopt proper solutions. So, we proved confused in early stage in dealing with high inflation and the excess of import over export. Upon thoroughly analyzing the situations, we timely identified major tasks and put forth proper packages of solutions.
Fifth, we must base on the country’s real situations to work out tasks, solutions and to take actions with highest responsibility. The high inflation rate in Việt Nam was partly resulted from external reasons but it mainly stemmed from internal ones. To cope with inflation, it needs to look up the world’s experience, attentively listen to experts’ ideas, and take into consideration the country’s actual situations in order to work out appropriate targets, duties and measures. At the same time, we must uphold responsibilities of each organization and its leaders in doing their assignments through practical action plans. On the other hand, we must make timely revisions and adjustments to adapt our policies and solutions to real situations.
By bringing into play the initial achievements, smoothly making use of the above lessons, and implementing the adopted solutions in a consistent and proper way, we are surely to fulfill the set targets.
Part II
TARGETS, TASKS AND SOLUTIONS FOR SOCIO-ECONOMIC DEVELOPMENT IN 2009
The global financial crisis is considered the most severe one since the Great Depression in 1929-1933, with larger scope, more complicated changes and more terrible consequences than the forecast. The world’s economy is facing the danger of recession. This situation has caused negative impacts on our economy, setting up more difficult tasks to stabilize macro-economy and maintain growth in the time to come.
At home, after three years of implementation, some norms of the five-year plan 2006-2010 have been fulfilled, even in excess of the plan. However, the remaining tasks in 2009-2010 are burdensome, and many norms are difficult to attain. Administrative reforms, human resources and infrastructure have not afforded development requirements and are the “bottle-necks” for growth. Although being put under control and slowing down, inflation still remains high. Macro-economy balance is unstable, the economy contains many defects and shortcomings while the global competition is soaring. Climate change, natural disasters and epidemics are likely to occur at any time.
However, we have fundamental advantages, namely socio-political stability; great internal strength and growth potentialities; expanding export markets; Việt Nam’s raised position and prestige on international arena; improved investment environment. So, foreign investors still show their strong belief in our economic prospect.
I. TARGETS, TASKS AND MAIN NORMS
The overall objective of socio-economic development for 2009 should be: to continue prioritizing inflation curbing, proactively minimize negative impacts of the global financial crisis and recession, ensure macro-economic stability, better implement social security policies; maintain proper and sustainable growth rate, ensure political stability, national security and social order, laying the foundation to successfully realize the socio-economic development plan 2006-2010.
To complete that overall objective, we must make great efforts to fulfill the following main tasks:
First, fruitfully implement monetary, fiscal, investment and import-export policies; foster the safety of financial and banking system; keep the inflation rate of 2009 under 15% and down to one digit by the year 2010.
Second, realize current policies and issue new ones to ensure better social security and poverty reduction; promote sustainable social, cultural and environmental development.
Third, bring into play all the country’s strengths, enhance international economic cooperation and integration, strive for growth rate at around 7% through facilitating the rapid development of people-run sector, improving the performance of SOEs, attracting and raising the quality of foreign investment.
Forth, pay special attention to growth stability and quality through improving planning work, investment plans and efficiency, applying technological and technical advances, saving input materials and energies in production and business activities, and raising competitiveness of commodities, enterprises and the economy.
Fifth, give more priorities to agricultural and rural development; speed up economic restructuring in agriculture and rural areas; improve material and spiritual life of rural people in line with the Resolution adopted at the 7 th Plenum of the 10 th CPV Central Committee.
Sixth, concentrate on lifting “bottle-necks” for growth, facilitate production and investment attraction. Qualifying human resource must be highlighted because it is considered the most fundamental competitiveness and a constant requirement in the world of globalization and continuous changes.
Paraphrasing the above overall objective and tasks, the Government submitted to the NA the compulsory norms, including:
(1) Economy
GDP growth: around 7% compared to 2008; GDP in real price: VND 1,820 trillion, equivalent to US $106 billion, and GDP per capita US $1,200.
The added value of agro-forestry and fishery sector grows 3%, industry and construction sector 8%, and services 7.8%.
Total export turnover: around US $76.7 billion, up 18% against the figure of 2008.
The society’s total investment capital for development: around VND 725 trillion, equal to 40% of GDP.
Total budget collection: VND 418 trillion, an increase of 4.76% in comparison with the figure of 2008; total budget expenditure: around VND 509.4 trillion, 7.4% higher than 2008.
Budget overspending: VND 87.3 trillion, equal to 4.8% of GDP.
CPI: lower than 15%.
(2) Social norms
Number of provinces meeting standards of compulsory junior secondary education: 55
University and college recruitment: up 11.4%, specialize high schools: 15.6%, vocational colleges and high schools: 18%.
Birth rate reduction: 0.2‰
New jobs: 1.7 million, including 90,000 guest workers sent abroad.
Poor households reduced to 12%.
Malnutrition among under-five-year children: below 19%.
Number of patient beds per 10,000 people: 26.85
Urban housing area per head: 12.2 square meters.
(3) Environmental norms
The population supplied with clean water: 79% in rural and 85% in urban areas.
Environmental polluters to be punished: 65%; solid waste collected: 82%; dangerous waste treated: 65%; medical solid waste treated: 75%; industrial parks and export processing zones with standard concentrated sewage treating system: 65%.
Forest coverage: 40.5%.
II. MAJOR SOLUTIONS
1. Continue to curb inflation and stabilize macro-economy
To keep CPI in 2009 under 15%, put inflation rate down to one digit in 2010 and maintain macro-economy stability, it is necessary to tighten monetary policies in a flexible way to ensure adequate capital for proper growth and prevent economic recession. To regulate interest rates in line with the market mechanism, apply flexible exchange rates to rein in curb inflation, encourage production and exports, and reduce trade gap. To consolidate macro management, further investigate and supervise financial and banking operations to guarantee the safety of the whole system. To efffectively monitor loans for real property and securities trading and money flows.
To seriously execute fiscal policy, raise the effectiveness of budget spending, fruitfully reduce overspending; to strictly save regular expenditure; to cancel or delay unnecessary and ineffective projects; to control SOEs’ ivestments.
To consistently pursue market-based price policies, adjusting coal and electricity prices in a sound roadmap while assisting the most vulnerable groups.
To bring into full play the current productivity, regulate import and export, well organize domestic markets, ensure supply-demand balance of essential commodities, prevent the shortage of goods. To enhance market inspection and control, fight against speculation, smuggling, counterfeit and low-quality product trading; to seriously implement regualtions on publicizing prices and selling goods at the publicized prices; to timely punish all violations; protect consumers’ legitimate rights. To heighten responsibilities of SOEs in ensuring the supplies of key commodities for production and consumption as well as in stabilizing the market and prices.
2. Removing difficulties, mobilizing all resources to maintain growth and raise effectiveness of production and business activities
To speed up agro-forestry, fishery and salt making as planned. To maintain rice-growing areas with a proper structure of varieties so as to ensure food security and facilitate rice export. To develop some industrial crops and others of high competitiveness to meet domestic and export demands. To boost up afforestation and forest protection, in combination with realizing appropriate mechanisms and policies to reduce poverty and improve living standard of foresters. To quickly recover and develop husbandry and effectively prevent epidemics. To exploit marine products in a sustainble way, speed up high-yield aquaculture. To grow some agro and aquatic products which can be used as food for domestic animals. To extensively instruct the alignment of agriculture production and the purchase, processing and consumption of agro-products.
To strengthen industrial capacity, especially the products of high demand; to develop manufacture and processing industries, focusing on mechanics and minerals processing. To promote investment in hi-tech and environmentally friendly industries of high added value; to quickly develop some auxiliary industries of competitive advantages.
To develop services to increase their density in the economic structure; to combine transport with logistic services to reduce circulation costs of commodities; to develop consultancy, telecommunications and financial services; to quickly develop trade service systems; to enhance inter-regional and inter-disciplinary linkages to raise the overall effectiveness of tourist service.
Enterprises, especially SOEs, should actively renovate their technologies, perfect management skills, absolutely save input materials and energy in order to lower production and circulation costs, improve the added value and competiveness of their products. To issue proper policies to encourage enterprises to follow this requirement. Ministries and localities must review and abrogate improper fees, especially in the fields of land, customs, tax payment, investment license, business registration, and transport charges, so as to reduce enterprises’ intermediate costs.
To speed up SOEs’ reform, focusing on equitization. The equitization of SOEs is carried out according to the set plan; to keep on selling stock of the equitized SOEs where the State does not need predominance. To bring into full play the role of the State Capital Investment Corporation (SCIC) in managing and enriching the State’s capital to serve the country’s development. To differentiate responsibilities of Ministries, local People’s Committees and SCIC over the equitized SOEs.
To take measures to ensure electricity for production and people’s daily life. In 2009, the capacity of the national electricity grid can be upgrade to 3,400 MW. Meanwhile, to seriously do thrift practice in consuming electric power, striving to reduce electricity consumption in relation with GDP growth. To issue mechanisms to encourage electricity generation; to popularize the use of recycled and bio-energies; to minimize and try to stop electricity cut; to build a competitive power market, separate production from distribution.
To ensure enough capital for production and trade of essential goods and exports and for accelerating the completion of important works to increase productivity and circulation. To issue lists of investment projects and specific policies to facilitate investments in infrastructure. To outline appropriate assisting policies to promote the performance of small and medium enterprises.
To review FDI attraction; to draw an investment portfolio suitable to economic development and restructuring strategies; to focus on hi-tech environmentally-friendly projects with high effectiveness; to speed up site clearance and remove obstacles to increase disbursement rate. To give favorable conditons to Vietnamese enterprises to do investment abroad.
3. Speeding up exports and tighten imports to reduce trade deficit
To reach the set export turnover (around US $76.6 billion), the export structure must be readjusted towards increasing the volume of manufactured and processed products, improving the added value and competitiveness of the exports, developing new exports, and reducing the export of raw materials. To boost up trade promotion at three levels - enterprises, associations and the Government - in order to open new markets. To uphold responsibilities of trade promotion organizations, overseas representative agencies, and asscociations in assisting and coordinating with domestic exporters.
To continue implementing solutions to control imports in line with the World Trade Organization’s regualtions, so as to reduce the import of unnecessary products and keep the excess of import over export at US $20.7 billion, equivalent to 27% of the export turnover. To take consistent measures to settle illegal import and trade frauds.
4. Effectively realizing the CPV’s 7th Resolution on agriculture, peasantry and countryside
Based on the Resolution of the Party Central Committee and the Government’s action program, ministries and localities must promptly design their own action plans, mobilize resources and attentively instruct the fulfillment of objectives and tasks set in the Resolution, taking care of the following missions:
To effectively conduct planning work relating to land, infrastructure, production development, rural construction and urban development.
To enhance scientific research, develop human resources, do well agriculure, forestry and fishery expansion in order to speed up the transfer and application of scientific and technological advances in production, especially in terms of plant varieties, breeding animals, cultivation techniques, disease prevention, post-harvest preservation and processing.
The State will increase investment and encourage all economic sectors to join hands in developing infrastructure, processing industries, and services to accelerate economic and labor restructuring in agriculture and rural areas; and improve material and spiritual life of residents in the countryside.
To research and build up proper production models im combination with land accumulation to form large-scale merchandise areas, facilitating the industrial applications in agriculture. To better organize the consumption of agro-products, promote consumption through contracts, especially for products with large quantity and seasonal characteristics which are not easy to harvest and preserve.
To quickly prepare and submit to the NA for the approval of the amendment of the Land Law and the Cooperative Law.
5. Fruitfully implementing social security and poverty reduction policies
To continue to fruitfully implement issued programs, projects and policies to support production, stabilize livelihood of the poor and residents in remote, ethnic minority, epidemic-damaged and disaster-hit areas. Ministries and localities must allocate enough capital and increase reserves so as to cope with any circumstances; perfect the execution mechanism and strictly instruct and supervise the realization so that the State’s aid can timely go to those in need, without losses and waste. To expand categories of beneficiaries and increase their pension benchmarks defined under current social security policies.
To perfect mechanisms and policies in order to provide fundermental and long-term supports in terms of social security, focusing on some following key missions:
To early issue new poverty line appropriate to the inflation period and the country’s real situations; to early ratify and implement the Project to assist the poorest districts nationwide through making full use of the current policies, programs and projects, at the same time, issuing specific policies to enhance poverty reduction in these districts in a rapid and sustainable way.
To continue the implementation of the Project on salary, social insurance, and preferential pension reform in the period of 2008-2010. To fruitfully adjust the minimum salary among businesses in different regions. To prepare necessary conditions to adjust the general minimum salary in 2009; to apply assignment allowances (10%) for civil servants and army forces; to apply unemployment insurance since January 1, 2009; and to design more forms of social and health insurances.
To implement the National Program on housing and building houses for low-income urban dwellers; to quickly finalize procedures to realize the Supportive Project on housing for poor households and the Project on building public housing for teachers; to quickly approve and implement the Project on safely living in flood-hit areas in Central provinces.
To increase capacity of the Bank for Social Policies to fruitfully implement credit programs on social security and provide capital to the poor and beneficiaries of social policies, so that they can afford education, production development and living standard improvement.
To pilot sectoral labor contracts and implement comprehensive solutions to build up healthy and sustainable working relations; to encourage enterprises to provide material and spiritual assistance to their employees, especially those living in concentrated industrial parks. To proactively and appropriately solve strike cases and put them in order.
To do well with compensation, assistance and resettlement activities to harmonize the interests of the State, land users and investors. All local People’s Committees must pay great attention to solving citizens’ complaints, especially those relating to land, in coformity with laws and real situations.
Ministries and localities should actively prepare specific plans to cope with natural disasters and minimize their negative impacts. To promptly implement the National Goal Program on coping with impacts caused by climate change, especially the danger of sea water rising, to ensure the country’s sustainable development.
6. Increasing the State budget-using investments and engaging the society in raising the quality of education, healthcare, culture and envinronmental protection
To increase the proportion of State budget expenditure for people, speed up the mobilization of social resources for this key issue. To continue to synchronously implement the National Goal Programs on social affairs set out in the five-year plan 2006-2010.
To improve the quality and enlarge the scope of education and training, we should focus on the following activities: The State will vigorously invest in compulsory education, public schools, support talented, excellent, poor pupils and those from social policy-benefiting families; at the same time, to push up the educational socialization with a view to encouraging economic sectors to invest in education; to expand the mode of training under contracts and on demand; to upgrade the contents, curricula and teaching methods suitable to Việt Nam’s realities; to qualify teachers to be able to train a contingent of high-skilled laborers; to renovate educational management, empower schools, especially professional and vocational ones; to intensify international cooepration, to make our education deeply integrate in the world’s developed education, and lauch international cooperation projects, especially on training teachers.
To raise the country’s scientific and technological capacity, adopt and apply the world’s scientific and technological advances. To boost up consultancy, brokerage, and technological transfer and organizing technology, open technology and equipment fairs. To renew operating machenisms and connect scientific and technological organization to production facilities. To develop national products made with advanced technologies. To issue policies to encourage businesses to renovate technologies, raising the rate of technological renewal to a higher level. To use effectively key labs and speed up the constrution of two hi-tech parks.
To take drastic and consistent measures to reduce pollution, protect and improve envinronment, especially in urban areas, industrial parks and handicraft villages. To tighten the management and treatment of waste matters. To promote the development of envinronmentally-friendly industries; to encourage and then enforce the compulsory use of non-polluting packing; to further inspect and deal with violations. To improve the capacity of observation system to obtain accurate and timely information about envinronment.
To allocate from the general State budget a larger proportion for healthcare. To vigorously invest in district hospitals and upgrade communal clinics and standby medical centers; to further invest in leading hospitals, regional and provincial ones, and specialized medical centers. To purchase more devices for food safety and hygiene, focus on epidemic prevention. To develop pharmaceutical industry, produce vaccines and medical bio-products, increase the market share of domestically-made drugs, well organize and manage the distribution of medicine, especially at hospitals, to stabilize the drug market. To perfect the organization and improve the quality of population, reproduction health care and family planning services. To try best to reduce the birth rate in a sustainable way.
To raise cultural characteristics in every socio-economic and daily activities. To consolidate the management of publication activities and improve the quality of publications so as to lead people, especially young generations, to a healthy personality and life style. To put the organization of festivals in order, reducing the wastage. To acitively prepare for the great 1,000th anniversary of Thăng Long-Hà Nội.
To fruitfully implement the Party and State’s policies on religious and ethnic affairs, consolidating the great national solidarity bloc. To put into practice gender equality, uplifting the social role and status of women. To implement the 7 th Resolution of the 10 th CPV Central Committee on youth and intelligentsia.
7. Accelerating adminsitrative reforms and anti-corruption
To continue to the integrated implementation of administrative reforms, especially administrative procedures reform, to make a breakthrough in this work. To abolish unnessesary permits; to make public administrative procedures; to introduce the one-stop shop mechanism. Based on the best performance of branches and localities, a standard model of addressing administrative procedures should be built and popularized throughout the country. To pilot the disollution of People’s Councils at district and ward levels and the people’s election of Chairpersons of communal People’s Commitees.
To launch the e-government program, speed up the IT application in State management activities, renew and gradually modernize the administration system. To cut down meetings, consolidate disciplines and rules, raised the efficient cooperation among State administrative agencies.
To continue accelerating anti-corruption, thrift practice and anti-prodigality in combination with the implementation of the movement ”Follow President Hồ Chí Minh’s moral example”. To reenforce the leadership of the Party committees at all echelons and uphold responsibilities of leaders in the fight against corruption and prodigality. To improve the efficient operation of the Steering Committees for Anti-corruption at all levels. To accelerate the trial of violations. To make public development mechanisms, policies and planning schemes, considering this work an important precondition for the prevention of corruption and prodigality. To highlight people’s monitoring role in this work.
8. Boosting up external affairs, national defence and security, ensuring social order and safety
To persistently implement the Party and State’s diplomatic guidelines and policies to create a favorable envinronment and conditions for national development; to deepen and stablize the retations with neighboring countries, powers and traditional friends; to develop friendship and cooperation with all countries and nations on the basis of equality and mutual benefits.
To successfully undertake the responsibility of a non-permanent member of the UN Security Council. To take an active part in regional cooperation mechanisms, especially within the framework of ASEAN and sub-regional cooperation programs.
To improve the efficiency of economic, trade and investment cooperation with other countries. To initiate the economic cooperation frameworks with potential partners, speed up the negotiations for bilateral economic and investment agreements. To continue campaigning for the recognition of Việt Nam’s market economy.
To effectively implement the Politburo’s resolution on overseas Vietnamese affairs, intensify cultural diplomacy and externally-orientated propagation to heighten Việt Nam’s profile on the international arena.
To enhance preventive solutions to reduce criminality, especially organized crimes; to ensure traffic safety and order, and strive to reduce traffic jams and accidents.
To consolidate the country’s military and security strengths; to build up powerful army and police forces; to fortify the whole-people defense and security arrangement; to safeguard the nation’s sovereignty, territorial integrity, political security and social order.
National Assembly deputies,
Heavy tasks for 2009 lie ahead. We need to achieve basic results in curbing inflation, stabilizing macro-economy, bettering social security, minimizing adverse impacts of the global financial crisis and economic recession on our country, and striving to keep a reasonable growth rate with higher quality. The world’s economic scenario is unstable, complicated and unpredictable. The Government proposes that the National Assembly considers and decides the socio-economic and environmental norms. The Government will do its utmost and act drastically, together with the entire Party, people and army, to achieve the highest results in 2009, paving the way for the successful implementation of the five-year plan 2006-2010.
We firmly believe that, under the leadership of the Party and management of the State, and by effectively conducting information and propagation work in order to create the unanimity within the whole political system and the strength of the entire nation, we will definitely overcome difficulties and challenges and make full use of opportunities to develop the country in a sustainable way.
Thank you, National Assembly deputies, comrades, compatriots and friends.
------------
[1] Eight major packages of solutions: (1) Implement monetary tightening and ensure liquidity of the banking system and the economy; (2) Closely control, cut down investment and improve the efficiency of public investment; (3) Focus on the development of production and services, ensure the supply-demand balance of goods; (4) Boost up export, monitor import and narrow the trade gap; (5) Strictly do thrift practice in production and daily life; (6) Strengthen market management and fight against speculation, smuggling and trade frauds; (7) Increase assistance to stabilize people’s life and production, implement social welfare policies; and (8) Promote and improve the efficiency of information and propagation work.
[2] Respective figures in previous years: 2003: 23.9% and 28.8%; 2004: 20.6% and 27.2%; 2005: 24.4% and 20.6%; 2006: 29.7% and 24.8%; 2007: 43.7% and 53.9%.
[3] Comprising of 1,968 projects, valuing nearly VND 6,000 billion from the State budget, and 1,145 ones of more than VND 31,000 billion invested by 55 SOEs.
[4] Expected to surpass 23.5% of the estimate, up 26.3% than implemented in 2007.
[5] Estimated State budget overspending in 2008 is 4.95% of GDP (the plan: 5%).
[6] Excess of import over export in April: US $3.2 billion, May: US $1.9 billion; June: US $728 million; July: US $753 million; August: US $258 million; September: US $500 million.
[7] CPI increase in January: 2.38%; February: 3.56%; March: 2.99%; April: 2.2%; May: 3.91%; June: 2.14%; July: 1.13%; August: 1.56%; and September: 0.18%.
[8] Economic growth rate in the first quarter: 7.38%; second quarter 5.85%; third quarter 6.55% and nine months: 6.52%.
[9] Approximately reaching the target set in the five-year plan 2006–2010: US $1,050–1,100/head
[10] Years with high yields: 1989 after the issuance of Contract 10, rice output increased by 1.996 million tons compared to 1988; the years 1999 and 2002 saw an increase of 2.3 million tones.
[11] In the first nine months of 2008, more than 49,300 enterprises were established with a total registered capital of about VND 377,100 billion, up 27.4% in number and 28% in registered capital against the same period last year.
[12] For the first nine months of 2008, the total registered capital was over US $57 billion, five folds higher than the same period last year, the disbursed capital reached more than US $8 billion, 37% higher than the same period.
[13] The ODA commitment for 2006 was US $3.75 billion; 2007: US $4.45 billion; and 2008: US $5.426 billion.
[14] Including assistance in land for housing and production, water supplies for daily use, key infrastructure development, loans, health care, education, employment, legal assistance, population resettlement, allocation of forest and food supply, allowances for lighting oil to ethic minority households, social policy beneficiaries and poor families who do not have access to electricity, assistances for fishing, relief for overcoming natural disasters’ aftermaths, epidemic prevention and control, salary adjustments, allowances for low-income people, reduction or exemption of irrigation fees and other charges, policies to support socio-economic development in northern central region, central coast, Central Highlands, Mekong Delta, northern midlands and mountainous regions, the second stage of the program on building houses in regularly-flooded areas in the Mekong Delta.
[15] Including two trust loan programs of international financial and credit organizations.
[16] By the end of 2008, 100% of communes and wards, 84.5% of villages and hamlets will have had medical staff; 98.2% of communes have clinics, 70% of communes have doctors; more than 46% of communes meet the national health care standards; over 70% of communes provide preliminary medical examination and treatment to holders of health insurance cards.
[17] Compared to the same period in 2007, for the first nine months in 2008, there were 9,463 traffic accidents, down 1,548 cases (14%). The number of fatalities was 8,598, down 1,307 deaths (13.2%). The number of injuries was 6,165, down 2,224 persons (26.5%).
[18] In recent years, Việt Nam’s ICOR was between 4.5 and 5.3; in 2008 the figure is predicted to be higher.
