Resolution No. 10/2008/NQ-CP On measures to curb inflation, stabilize macroeconomic conditions, ensure social welfare, and achieve sustainable growth

RESOLUTION

On measures to curb inflation, stabilize macroeconomic conditions,

ensure social welfare and sustainable growthg

The global economic situation is experiencing many complex and unpredictable changes. Oil prices and most basic raw materials and foodstuffs on the world market have risen sharply. The decline in the U.S. economy has had a strong impact and pulled down many other economies. Domestically, the severe cold spell in the North and North Central regions has caused significant material losses and adversely affected agricultural production and people's livelihoods. Under the condition that our country's economy has low competitiveness and is just beginning to operate under a market mechanism while deeply integrating into the global economy, the serious consequences of natural disasters, epidemics, and adverse global economic fluctuations have negatively impacted growth and domestic price levels.

In light of this situation, the Government has unanimously determined the current main task of the country to be: curbing inflation, maintaining macroeconomic stability, ensuring social welfare, and achieving sustainable growth, with curbing inflation being the top priority goal. To achieve these tasks and goals, on one hand, it is necessary to continue vigorously implementing Resolution No. 02/2008/NQ-CP dated January 9, 2008, of the Government on economic and social management in 2008, and on the other hand, it is essential to focus on directing the strict and synchronized implementation of the following key measures:

I. STRICT IMPLEMENTATION OF MONETARY POLICY

1. The State Bank of Vietnam must proactively and flexibly utilize monetary policy tools according to market principles, strictly controlling the total means of payment and total credit debt but ensuring the liquidity of the economy and the operations of banks and credit organizations.

Flexibly using monetary policy tools to gradually reduce deposit interest rates towards implementing a positive real interest rate policy. Strengthening supervision and closely monitoring the activities of commercial banks to ensure compliance with regulations on deposits, loans, and credit quality. Timely detecting and handling violations according to the provisions of the law to minimize risks in banking operations.

2. The National Financial Supervisory Commission should promptly stabilize its organization and coordinate in a timely manner with the State Bank of Vietnam, the Ministry of Finance, and related agencies to strengthen supervisory tools according to market mechanisms and international practices to proactively warn and better handle financial and monetary market fluctuations.

II. STRICT CONTROL AND IMPROVEMENT OF THE EFFECTIVENESS OF PUBLIC EXPENDITURE

1. Managing fiscal policy in a direction of thrift in regular spending, enhancing the effectiveness of investment capital from the state budget; strictly controlling state-owned enterprise investments, especially those not within their core business areas; striving to reduce the budget deficit ratio.

2. Implementing the reduction and reorganization of construction investment plans for 2008 from state budget sources, government bonds, state investment credit, and state-owned enterprise investments, primarily inefficient projects and those not truly necessary. The Ministry of Planning and Investment will take the lead in coordinating with the Ministry of Finance to implement this content immediately in reviewing and balancing state budget funds. Ministers, Chairmen of provincial People's Committees, Chairmen of Management Boards, General Directors of state economic groups and corporations shall, according to their assigned functions and tasks, rigorously review investment items to eliminate inefficient projects, focusing capital on nearly completed projects and those investing in goods production across all economic sectors to accelerate progress and put them into operation as soon as possible.

3. Relevant ministries, particularly the Ministry of Planning and Investment, the Ministry of Construction, and the Ministry of Finance, should urgently complete investment construction documents and promptly issue guidelines to address emerging issues to expedite disbursement and put projects into operation to maximize benefits.

4. The Ministry of Planning and Investment will take the lead in studying the transfer of some investment projects from state budget funding to BOT models from domestic and foreign sources or selling and transferring projects capable of generating returns to businesses or individuals for further investment to enhance investment efficiency.

5. The Ministry of Finance will take the lead in reviewing and proposing measures to regulate state-owned enterprise investment activities, large economic groups, and corporations. Summarizing the model of economic groups in accordance with the spirit of the Ninth Plenum Resolution No. 3. The Ministry of Planning and Investment will cooperate with the Ministry of Finance to prepare for implementation in the fourth quarter of 2008.

6. Implementing a comprehensive, strict, and stringent thrift policy at all levels, in all sectors, throughout the entire political system. Incorporating the content of thrift in budget spending, production, and daily life into the campaign "Learning and Practicing Ho Chi Minh's Moral Example" in 2008 and subsequent years. In 2008, in addition to saving an average of 10% of administrative costs (excluding salaries, salary allowances, and personnel expenses according to prescribed regulations) of budget-funded agencies, unnecessary procurement expenses should be cut, travel costs (especially air travel) minimized; reducing hospitality expenses and overseas delegations funded by the budget or having budget origins that are not truly necessary; saving energy and vehicles more thoroughly. Reducing costs for festival, commemoration, award reception, and other wasteful activities. The Ministry of Finance will take the lead in setting targets and guiding the implementation of units.

7. Strive to exceed the budget revenue target allocated for 2008, increase reserves for expenditures on disaster relief, social welfare, and reduce the budget deficit ratio compared to the target set by the National Assembly for 2008.

III. CONCENTRATE ON DEVELOPING INDUSTRIAL, AGRICULTURAL AND SERVICE PRODUCTION TO ENSURE BALANCE IN THE SUPPLY OF GOODS

1. The Ministry of Agriculture and Rural Development shall take the lead:

a. Coordinate with localities to quickly address the aftermath of natural disasters and epidemics to boost agricultural production, focusing on directing the development of vegetable cultivation, animal husbandry, increasing food supply to stabilize grain and food prices early, prepare sufficient seeds for the upcoming crop season, and summer-autumn planting;

b. Coordinate with relevant agencies and authorities at all levels to detect early, proactively implement, and promptly guide measures to prevent, control, and effectively eliminate avian influenza, blue ear disease, foot-and-mouth disease in cattle and buffaloes, and H5N1 influenza in humans;

c. Direct the repair of reservoirs, dykes, and irrigation works to proactively respond to natural disasters during the upcoming typhoon and flood season to ensure safe labor for production and daily life.

2. Ministers of the Ministries of Planning and Investment, Industry and Trade, Natural Resources and Environment, Agriculture and Rural Development, and the Governor of the State Bank of Vietnam, Chairpersons of Provincial People's Committees shall strictly and promptly resolve difficulties and obstacles related to administrative procedures to facilitate quick access to capital, land, and market expansion to promote production development. At the same time, proactively implement appropriate measures to address difficulties caused by price fluctuations affecting business operations, particularly the budget estimates of ongoing projects funded by state budget, to complete them and put them into operation as soon as possible.

3. The Ministry of Planning and Investment shall take the lead in continuing to review and abolish regulations that hinder investment and business activities, creating favorable conditions for economic sectors to develop.

4. The Ministry of Industry and Trade shall coordinate with relevant ministries, industry associations, and businesses regarding ensuring adequate supplies; simultaneously, it has the responsibility to work with the Government to control prices of essential goods such as grains, medicines, oil, steel, cement, fertilizers, etc. Proactively propose and apply solutions to address power shortages and ensure power supply for production.

IV. STRENGTHEN EXPORTS, STRICTLY CONTROL IMPORTS, REDUCE THE TRADE DEFICIT

1. The Ministry of Industry and Trade shall take the lead:

a. Propose solutions to reform administrative procedures related to export activities to reduce costs for businesses, enhancing the competitiveness of Vietnamese exports while applying technical barriers and other import measures consistent with international commitments to reduce the trade deficit, including increasing import tariffs on non-essential goods.

b. Support trade promotion activities for exports; intensify promotional activities in traditional markets and expand new markets to increase exports;

c. Strengthen measures to encourage domestic production to replace imports, and promote service and tourism activities;

d. Coordinate with the Ministry of Agriculture and Rural Development to propose mechanisms and policies to ensure adequate domestic supply of grains and food, guarantee food security, and control excessive price increases in this group of goods. Manage and control to export rice in 2008 at a level of 3.5 to 4 million tons.

2. The State Bank of Vietnam shall lead monetary policy and exchange rate management in line with the policy of promoting exports. Establish mechanisms and direct commercial banks to purchase all foreign currency from exporting enterprises, promptly address credit bottlenecks, and meet reasonable borrowing needs for exports.

3. The Ministry of Finance shall actively and flexibly use tax tools to reasonably increase export taxes on coal and crude oil. Adjust import taxes and special consumption taxes on certain non-essential consumer goods such as whole vehicles under 12 seats, some electronic and refrigeration products, two-wheeled motorbike parts, alcohol, and beer to achieve the goal of reducing the trade deficit but still comply with international integration commitments; recommend adjustments to tax mechanisms and policies, apply technical barriers and other necessary measures consistent with international commitments to limit non-favored imports.

V. STRONGLY PRACTICE ECONOMY IN PRODUCTION AND CONSUMPTION

Wasteful practices in production and consumption still occur quite widely among agencies, units, and residents, with significant potential for savings in both areas. First, the Government shall direct the thorough implementation of economy and waste reduction in the use of state budget. Units must proactively use the allocated budget to fulfill their tasks, even in cases of rising prices. No additional budget spending outside the approved budget.

Enterprises must review all expenses to lower production costs and circulation fees. Strengthen financial oversight over state-owned enterprises, especially economic groups and corporations 90, 91 to immediately correct ineffective investments, investments outside the main production sector, and unreasonable investment structures in recent times.

The Government calls on everyone to thoroughly practice economy in consumption, especially fuel and energy.

VI. STRENGTHEN MARKET MANAGEMENT WORK TO COMBAT SPECULATION, SMUGGLING, AND COMMERCIAL FRAUD, AND ENFORCE STATE LAWS ON PRICES

1. The Ministry of Industry and Trade shall take the lead in implementing measures to ensure balance between supply and demand for goods; at the same time, strengthen guidance on market management, absolutely preventing situations where fluctuations in sources of goods and prices in the market are exploited for speculation and price hikes, especially for important materials such as gasoline, diesel, electricity, cement, iron, steel, fertilizers, pesticides, and essential consumer goods like foodstuffs and medicines. Coordinate with local authorities to direct relevant agencies to enhance measures to prevent fraudulent trade practices, tax evasion, and cross-border smuggling, particularly smuggling of gasoline, diesel, minerals, and foodstuffs.

2. The Ministry of Finance shall strengthen supervision over compliance with state laws on pricing and strictly handle violations.

3. All enterprises under all economic sectors must thoroughly comply with regulations on price management and regularly check selling prices at their retail networks.

4. State-owned corporations must set an example in implementing this requirement and be accountable to the Government for the operations of their retail systems and retail agents.

The Government requests industry associations to actively participate and support policies and measures to stabilize the market and prices.

VII. STRENGTHENING MEASURES TO SUPPORT STABLE LIVING AND PRODUCTION OF THE POPULATION AND EXPANDING SOCIAL SECURITY POLICIES

Based on their assigned functions and tasks, ministries, localities, and related agencies shall strengthen measures to support social security and stabilize people's living conditions through efforts to eradicate poverty, create employment, and support the livelihoods of people, especially those in poor areas, impoverished households, disaster-stricken regions, and low-income workers.

1. The Ministry of Finance shall take the lead:

a) Coordinating with relevant agencies to inspect the implementation of policies adjusting the minimum wage issued by the Government which took effect from January 1, 2006; inspecting the distribution of national rice reserves without charge to households affected by natural disasters and suffering from shortages;

b) Organizing the full and effective implementation of policies supporting ethnic minority groups, policy-targeted households, poor households, near-poor households, and fishermen pursuant to Decision No. 289/QĐ-TTg dated March 18, 2008;

c) Leading together with the Ministry of Industry and Trade to monitor the implementation until June 2008, refraining from increasing electricity, coal, gasoline, and diesel prices; maintaining stable prices for cement, fertilizers, clean water, medicines, air tickets, train tickets, bus tickets; maintaining stable levels of school fees and medical fees. At the same time, closely monitoring inflation trends and proposing appropriate follow-up measures to the Government.

2. Ministries of Finance, Planning and Investment, and the State Bank of Vietnam, along with People's Committees at all levels, shall strengthen low-cost capital sources for the Social Policy Bank to continue implementing preferential credit programs for poor households and policy-targeted groups.

3. Relevant ministries and People's Committees of localities shall continue to intensify the implementation of national target programs and other support measures for difficult regions and disaster-stricken areas. Simultaneously, they shall monitor price trends and people's living conditions within their jurisdictions, promptly addressing social issues causing public concern; enhancing inspections, supervision, and the correct and full implementation of state social policies for beneficiaries, ensuring that state support reaches the intended recipients without loss or corruption.

VIII. ENHANCING INFORMATION AND PROPAGANDA WORK

1. The Ministry of Information and Communications shall organize and direct information and propaganda work to create high consensus among all levels, sectors, localities, enterprises, and the general public to implement the set goals and measures aimed at overcoming difficulties and achieving stable economic development.

The tasks ahead are heavy and challenging, but the opportunities, favorable conditions, and potential for growth of the national economy remain large and fundamental. The Government requests ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, chairpersons of provincial and municipal people's committees directly under the central government to base their actions on their assigned functions and tasks and the set objectives and measures, and immediately plan and implement them in April 2008.

2. Mass media outlets shall provide accurate information and support state policies in sensitive areas, avoiding false and inflammatory information that could cause societal anxiety.