Directive No. 08/2003/CT-TTg on Enhancing Efficiency and Competitive Strength of Enterprises

DIRECTIVE

On Enhancing Efficiency and Competitiveness of Enterprises

In recent years, the Party and State have issued many policies and guidelines, creating a favorable environment for enterprises to improve their production and business efficiency and competitiveness in the market. Many enterprises have made great efforts to rise up, contributing significantly to the process of restructuring the economic structure and maintaining high growth rates over many years. However, the production and business efficiency and competitiveness of enterprises, as well as the national economy, remain limited and have not met the demands of the market and the requirements of integration with regional and global economies.

There are many reasons for this situation, but mainly they are: the economic system is not yet synchronized and consistent in many aspects; implementation organization still has many shortcomings, administrative procedures are still complex and cumbersome, and not a few state agencies and civil servants have not fulfilled their responsibilities, causing difficulties and obstacles for enterprises; many types of fees and charges are still high; many enterprises have not proactively innovated technology, improved management levels, and skill levels of workers; production costs are still high and not transparent in enterprise management, weak in joint ventures and cooperation among themselves, passive in international economic integration, and still rely on state preferences and protection. The role of business associations and industry associations is still limited.

To address these weaknesses, create a strong shift in enhancing the efficiency and competitiveness of enterprises, produce more high-quality products and services at competitive prices to meet the requirements of production and living standards, and actively integrate effectively into the international and regional economies, the Prime Minister issues the following directive:

1. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of People's Committees at all levels, according to the responsibilities assigned, shall immediately implement the following tasks:

a) Organize the implementation of Resolution No. 02/2003/NQ-CP dated January 17, 2003 of the Government on several main policies and solutions to implement the Resolution of the National Assembly on the tasks of economic and social development in 2003 and the Program of Work of the Government in 2003; at the same time, review all relevant documents and regulations concerning enterprise activities to adjust and supplement promptly necessary contents to remove difficulties and obstacles, promote production and business development, enhance product, enterprise, and overall economic competitiveness.

b) Based on selecting products with advantages, markets, and competitive potential, adjust and supplement industrial development strategies, regional and local planning, with appropriate mechanisms and policies to facilitate adjustments in investment structures and production-business structures for enterprises of various economic sectors; encourage the rapid development of distribution enterprises strong enough to link production with circulation, providing substantial support for producers to sell their products; at the same time, create conditions for the emergence of new enterprises, especially small and medium-sized enterprises.

c) Encourage and create conditions for enterprises, cooperatives, individual households engaged in production and business to continue vigorously producing products with markets, strengths in technology, skills, traditions, high quality, and low costs; innovate technology, effectively apply advanced scientific and technological achievements in production and business management, product quality management, and environmental management according to international standards. Continue to support enterprises in training, improving management and operational capabilities, upgrading worker skills, making breakthroughs in increasing product productivity, quality, production efficiency, and product competitiveness, being proactive in the reduction of tariffs and actively participating in regional and international economic integration.

d) Vigorously restructure, reform, develop, and enhance the efficiency of state-owned enterprises; approve and urgently implement comprehensive plans for restructuring and reforming state-owned enterprises; focus on directing the improvement and enhancement of the effectiveness of operations of holding companies, accelerating the implementation of shareholding reforms of state-owned enterprises that have been approved.

Resolutely implement mergers, dissolutions, and bankruptcies in accordance with the law for enterprises suffering prolonged losses; accelerate the handling of overdue debts and surplus labor to clean up and make financial conditions transparent, creating favorable conditions for the transfer of ownership of state-owned enterprises. For those enterprises that can maintain state ownership with 100% capital, focus on improving organizational management, accelerating development according to approved strategies, plans, and programs; amend and supplement mechanisms, policies, and management models to enhance autonomy, dynamism, effectiveness, and responsibility of state-owned enterprises under the market mechanism.

đ) Continue to vigorously implement the Enterprise Law. Consistently implement the policy of ensuring enterprises' freedom to operate in industries and businesses not prohibited by law; issue specific regulations on conditional industries and professions, particularly those sensitive to culture, society, and public health. Improve the Working Group for Implementing the Enterprise Law to monitor the implementation of mechanisms, policies, and laws related to enterprises; compile situations and regularly report and propose to the Prime Minister necessary amendments and supplements to mechanisms and policies.

e) Take concrete measures to create conditions for the rapid development of services such as project consulting, project evaluation, debt purchase and sale, financial leasing, corporate management, human resource training, science and technology application, information, marketing, intellectual property protection, brand building...

f) Continue to implement administrative reform towards a single point of contact and a single implementing organization for each type of work; clearly define the powers and responsibilities of organizations and individuals; strictly handle officials, civil servants, and public employees who create difficulties or harassment for businesses or violate laws while performing their duties.

g) Regularly organize meetings with businesses for direct, open dialogue to promptly resolve business grievances and complaints. Strengthen collaboration with associations and jointly organize candid dialogues on issues related to production and business operations; improve inspection and supervision activities according to current legal regulations to ensure strict state management without hindering normal business operations.

h) Organize broad consultations and seriously incorporate reasonable suggestions from businesses and associations during the process of researching and issuing regulations related to the business environment and the rights and obligations of businesses.

2. The Ministry of Finance shall have the following tasks:

a) In the third quarter of 2003, submit to the Government for issuance of a mechanism for using proceeds from land transfer rights that enterprises were previously allocated under land law regulations but now must relocate according to planning for investment construction and technological renewal as approved by project.

b) Coordinate with ministries, localities, and state-owned enterprises to accelerate the resolution of outstanding debts, financial health, and transparency; timely and properly utilize the surplus labor support fund; guide prompt resolution of issues in determining the value of state-owned enterprises and selling shares to outside investors through auctions to expedite ownership conversion.

c) Study and submit to the Prime Minister for issuance of a Regulation on the organization of mutual insurance, facilitating the private sector in establishing mutual insurance organizations to share risks and assist each other in business operations.

d) Conduct a one-year review of the implementation of the Customs Law; amend or propose amendments and supplements to customs procedures regulations replacing temporary provisions; continue improving customs processes and procedures, increasing the number of export items exempted from inspection so that by the end of 2003, the time and cost of customs procedures are reduced to match those of countries in the region.

đ) Study and submit to the Government for issuance of regulations on the relationship between the State and businesses operating in state-monopoly sectors, aiming to make business monopolies a national benefit, where the State collects a reasonable portion when allowing usage, except for cases serving security and defense.

e) Coordinate with the Ministry of Transport, the Ministry of Industry, and localities to direct the review of various fees; adjust and reduce port, airport fees, etc., in 2003 to reach regional levels by the end of 2004.

f) Lead and coordinate with the Ministry of Planning and Investment, the Development Support Fund, and relevant agencies to study and submit to the Government for narrowing the scope of entities eligible for preferential development credit; simplify loan procedures and processes. Increase post-investment interest rate support and investment credit guarantees; facilitate access to state credit for businesses in all economic sectors in encouraged investment areas.

g) Study and propose adjustments to reduce VAT and import tax rates; abolish price differential collection systems for raw materials not yet produced domestically or not meeting quantity and quality requirements; adjust corporate income tax rates to equalize domestic and foreign-invested enterprises; improve and simplify tax payment, refund, and customs inspection procedures; strengthen and regulate post-transaction tax and customs inspections; create favorable conditions for businesses to implement cost reduction plans and enhance competitiveness.

h) Lead and coordinate with the Ministry of Labor, Invalids and Social Affairs, the Ministry of Home Affairs, the Ministry of Education and Training, and other relevant agencies to study and submit to the Government for issuance of mechanisms and policies supporting the training of managers and improving workers' skills at enterprises.

i) Study and submit to the Government for issuance of mechanisms to form development funds for technology, product development, and improvements directly applied to industrial and agricultural production.

3. The Ministry of Trade shall have the following tasks:

a) Coordinate with ministries, localities, business associations, industry associations, and enterprises to proactively organize domestic and international trade promotion activities to expand market sales. Improve market information work and forecasting to enable businesses to be more proactive in production and business operations. Study the possibility of establishing trade promotion centers in major markets such as the United States, Japan, Europe, etc.; intensify market management, combat commercial fraud, fake production and sales; strictly handle speculative hoarding, price gouging, and unjust profits according to the law.

b) Lead and coordinate with relevant ministries to implement the principle of diversifying export markets. Vigorously promote exports to key markets like the United States, EU, Japan, China, ASEAN; restore traditional markets while opening new export markets (Middle East, Africa, Latin America); coordinate with ministries and associations to address non-tariff barriers, technical barriers, and resolve trade disputes involving Vietnamese exports.

c) Coordinate with the Ministry of Finance and relevant agencies to immediately implement measures to promote exports as directed by the Prime Minister in Document No. 78/CP-KTTH dated January 20, 2003 of the Government; at the same time, study and report to the Prime Minister a mechanism to support input costs instead of direct output support.

d) Take the lead and coordinate with relevant ministries and agencies to urgently research and draft for the Government's consideration and comments on the Ordinance on E-commerce.

4. The Ministry of Planning and Investment shall have the following tasks:

a) By April 2003, submit to the Prime Minister the project to strengthen the Working Group implementing the Law on Enterprises.

b) Continue to study and build and perfect the pilot project to attract foreign investors to invest in real estate, high-tech development, and high-value-added service activities such as finance, banking, air and sea transport, legal services, and trade. Study and report to the Government on the policy and measures to implement investment forms such as mergers and acquisitions (M&A).

c) Guide the conversion of some enterprises with foreign investment capital to operate under the joint-stock company form after the Government issues this Decree; guide procedures for investment licensing to reduce administrative procedures for foreign investors.

5. The State Bank of Vietnam shall instruct commercial banks to continue improving mortgage and loan procedures to facilitate access to capital for businesses of all economic sectors for production investment, technological innovation, and human resource training; especially to increase medium- and long-term loans for projects if borrowers and assets formed from loans meet current regulations.

6. The Ministry of Posts and Telecommunications shall have the following tasks:

a) Accelerate the implementation of the price reduction schedule for telecommunications services to be equal to or lower than the average rates in the region; at the same time, coordinate with the Ministry of Finance to study and report to the Prime Minister a mechanism to manage postal and telecommunications service prices that create business initiative, prevent dumping, and protect national interests.

b) Take the lead and coordinate with relevant agencies to develop programs to apply information technology and the Internet to advertise products and businesses, attract customers, and expand markets.

c) Develop specific policies and solutions to support and encourage businesses operating in the postal and telecommunications sectors, particularly new entrants. Review the issuance of business licenses according to planning to ensure healthy development of the telecommunications market. Complete the issuance of business licenses to enterprises permitted by the Prime Minister to operate in this sector by the second quarter of 2003. Re-plan the allocation of telecommunications resources based on equality, efficiency, and rationality among businesses, improve service quality, and protect consumer rights; direct the provision of connections in terms of time, capacity, and quality for new enterprises to ensure fair competition.

d) Urgently build and issue or submit to competent state authorities for issuance of guiding documents for the Universal Service Fund for Postal and Telecommunications Services. Coordinate with the Ministry of Finance to establish regulations clearly distinguishing postal and telecommunications business operations from public service functions.

7. The Ministry of Industry shall have the following tasks:

a) By the second quarter of 2003, submit to the Government the project to reduce production costs and electricity loss rates.

b) Continue to complete the draft Decree of the Government encouraging industrial production in rural areas.

c) Develop plans and policies to promote the production of raw materials, provide more complete equipment, spare parts, and components for industrial production at reasonable prices and high quality. Encourage concentrated investment primarily in three key economic zones to rapidly produce complete equipment, spare parts, and components for industrial products where we have competitive advantages.

8. The Ministry of Agriculture and Rural Development and the Ministry of Fisheries shall take the lead and coordinate with provincial and municipal people's committees to focus on directing and effectively implementing the crop and livestock breeding program to ensure sufficient high-quality seeds and breeds with stable supply at appropriate prices; urgently guide mechanisms and policies to encourage organizations and individuals to participate in seed breeding and production. At the same time, strengthen supervision, inspection, and handling of violations in the use of chemicals and antibiotics in agriculture and animal husbandry to ensure food products meet hygiene and safety standards for consumption and export; pay special attention to developing agricultural processing and preservation industries.

9. The Ministry of Health shall have the following tasks: coordinate with relevant agencies to urgently implement the strategy for developing the pharmaceutical industry, focusing on producing medicinal herbs and chemical raw materials to replace imports; at the same time, perfect the state management mechanism for the pharmaceutical industry and drug pricing.

10. The Ministry of Construction shall have the following tasks:

a) Build and submit to the Government the project to reform the organization and operation of the water supply sector; study the transition of water supply enterprises from public welfare activities to business operations to enhance the effectiveness of these enterprises.

b) Coordinate with the Ministry of Transport to guide localities in building specific urban planning and management mechanisms, and public transportation development; create favorable conditions for cooperatives and private entities to invest in the transportation sector, including port operations, in accordance with planning.

11. The Ministry of Science and Technology shall have the following tasks:

a) Implement policies to encourage the increased application and development of high technology, innovation, and improvement of technological levels in the production of export products, products with advantages in raw materials, and products carried out under the ASEAN Free Trade Area (AFTA) program. Continue to develop the application of research results from biotechnology, information technology, automation technology, and new material technology programs. Establish mechanisms to encourage collaboration and cooperation between research institutions and production facilities.

b) Promote and disseminate industrial property laws to businesses; guide and improve procedures to facilitate businesses in registering and protecting their brands for goods and services.

12. The Ministry of Home Affairs has the responsibility:

a) By the second quarter of 2003, complete the draft Decree on the organization and operation of Associations, including business associations and industry associations, in which clearly define the functions and responsibilities of the associations, the relationship between the associations and state agencies; associations operate on the principle of self-financing.

b) Study and propose to the Government to assign a unified agency to manage national affairs regarding food safety for domestic consumption and exports.

13. The Ministry of Foreign Affairs has the responsibility:

a) Direct Vietnamese representative offices abroad to effectively implement Decree No. 08/NĐ-CP dated February 10, 2003, of the Government on serving economic development tasks. Proactively provide full and timely information about markets, laws, and business customs in countries and international organizations to businesses and business associations; support businesses in establishing relationships and conducting trade promotion, investment, tourism, labor cooperation, scientific and technological cooperation, and training activities with foreign partners.

b) Coordinate with the Ministry of Planning and Investment and the Vietnam Chamber of Commerce and Industry to organize business delegations to explore markets and sign import and export contracts, investments during visits by high-level delegations of the Party and State to foreign countries.

c) Coordinate with the Ministry of Public Security, foreign embassies in Vietnam, and direct Vietnamese representative offices abroad to create the most favorable conditions for entrepreneurs from all economic sectors in obtaining visas and other procedures for overseas business trips.

14. People's Committees at all levels have the responsibility:

a) Based on approved socio-economic development plans, build and publicly announce land use plans, urban development plans, industrial zone development plans, raw material areas, etc. Pay special attention to allocating land for small industrial zones and clusters to provide production and business space for craft villages, small and medium-sized enterprises; simultaneously, serve the relocation of production facilities causing urban pollution in cities and towns or facilities designated for relocation according to approved plans. Announce publicly and widely the compensation and land clearance policies before implementing investment projects.

b) Strengthen supervision over the use of land areas allocated to organizations and individuals, including state-owned enterprises; resolutely handle and recover land areas that are wasted, unused, or used contrary to regulations to replenish the land fund for enterprises requiring leasing and effective land use.

c) Assign a local agency to be responsible for monitoring, summarizing situations, identifying, and proposing timely solutions to difficulties and obstacles faced by enterprises, creating favorable conditions for the development of enterprises from various economic sectors and the effective operation of associations.

d) Promote the activities of the credit guarantee fund for small and medium-sized enterprises, allocate part of the budget to establish this fund as directed by the Prime Minister; create favorable conditions for small and medium-sized enterprises to access credit funds.

15. Enterprises from all economic sectors, cooperatives... (referred to as enterprises) have the responsibility:

a) Focus on researching and developing the enterprise's production and business strategy; based on market assessment and competitive advantages, clearly determine product and service structures, markets, business methods, advanced science and technology applications, cost reduction, quality improvement, brand building.

b) Strictly comply with legal provisions, fulfill tax obligations to the State fully; promote business culture, build enterprise traditions and reputation; financial transparency must be maintained during business operations; effectively implement internal management, focusing on employee training and incentive policies to ensure stable and sustainable development.

c) Develop specific plans and measures to practice thrift and reduce costs related to raw materials, materials, and energy in production; adjust and supplement labor norms to ensure increased labor productivity and cost savings; reorganize production to reduce costs at each stage; innovate management, especially productivity and quality management.

d) Promote joint ventures and collaborations to address input and output issues; study technology transfer and training; contribute to capital formation, business network creation, information exchange, and effective use of business support services.

đ) Effectively implement agricultural product sales through contracts between enterprises and farmers, linking production, processing, and consumption of products, ensuring a stable supply of raw materials for production and business.

16. Business associations and industry associations need to innovate their operational methods, widely gather members, expand international cooperation; continue to enhance their role in representing businesses, serve as coordination points for actions among businesses, promote mutually beneficial joint ventures and collaborations, support businesses in transferring technological know-how and management experience, in promoting trade, and protecting the legitimate rights of members in commercial disputes and handling economic relationships between members effectively.

17. The Vietnam Chamber of Commerce and Industry and the Vietnam Union of Cooperative Enterprises shall cooperate with government agencies and business associations and industry associations in implementing trade promotion, investment promotion activities, and fostering harmonious labor relations within enterprises. They shall collaborate with business associations and industry associations in representation and protection of business interests and assistance in business development. They shall collect opinions from businesses participating in the formulation of laws and socio-economic policies of the State.

18. Mass media agencies shall strengthen publicity and dissemination of the Party's and State's policies to businesses and the public; promptly recognize and honor businesses and entrepreneurs who operate effectively and in accordance with the law; disseminate good practices of domestic and foreign businesses; promptly identify and combat negative phenomena, corruption within the state apparatus that hinder business operations and illegal acts by businesses. At the same time, mass media agencies must report accurately and selectively to protect the interests of the country and businesses.

19. The Office of the Government shall compile specific recommendations and difficulties raised by businesses and associations before and during the 2003 Prime Minister's Meeting with Businesses, categorize them by issue and agency, and forward them to relevant ministries and agencies for prompt resolution and response to businesses and associations, and report the results of such resolutions to the Prime Minister.

20. Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairmen of Management Councils, General Directors, Directors of enterprises, and heads of related units and organizations are responsible for implementing this Directive.

21. The Ministry of Planning and Investment shall take the lead, coordinate with the Steering Committee for Enterprise Reform and Development and the Vietnam Chamber of Commerce and Industry to urge, monitor, and quarterly report to the Prime Minister on the implementation results of this Directive.