Directive No. 18/2004/CT-TTg on the development plan for the socio-economic sector and state budget estimate for 2005

DIRECTIVE

Regarding the development of plans for economic and social development

and the state budget estimate for 2005

_________________

The year 2005 is the final year of the five-year plan from 2001 to 2005, which holds significant importance for further enhancing the ability to achieve the economic and social development goals set forth in Resolution No. 55/2001/QH10 of the National Assembly, serving as a foundation for development in the early years of the subsequent five-year plan.

The Prime Minister requests that all Ministries, sectors, and localities thoroughly implement the policy of continued renewal as stated in the Ninth Plenum Resolution, creating every favorable condition to fully exploit potential and advantages, vigorously promote economic development, and specifically incorporate the main tasks below into their respective 2005 plans:

A. OBJECTIVES AND MAIN TASKS OF THE 2005 PLAN

I. OBJECTIVES

1. Rapid, efficient, and sustainable economic development. Mobilize and utilize resources effectively to develop the country, achieving clear qualitative improvements in product quality, efficiency, and competitiveness, as well as in the overall economy. Vigorously transform the economic structure and reduce production costs to enhance growth quality.

2. Continue to effectively implement commitments and the integration roadmap into the international economy; strongly implement measures to boost exports while effectively tapping into domestic markets.

3. Further renew education, training, healthcare, and culture towards greater socialization, improving quality. Strengthen scientific research and technological development to enhance human resource quality, effectively implement poverty reduction policies, improve living standards, particularly in remote, mountainous, and ethnic minority areas., 4. Continue organizational reform and enhance the effectiveness of state agency operations. Vigorously advance administrative reform, promote grassroots democracy, and strengthen dialogue between local governments and community residents.

II. MAIN TASKS OF THE 2005 PLAN

1. Strive to achieve an economic growth rate (GDP) of 8.0% to 8.5%. Continuously create necessary conditions for stable, sustainable, and high economic growth in the following years.

2. Develop agriculture towards accelerating structural transformation, linking agricultural production with industrial processing and markets, especially export markets. Apply new scientific and technological results, primarily biotechnology, to produce new crop and livestock varieties to increase productivity, quality, and agricultural product competitiveness; create conditions and launch campaigns to encourage farmers and rural areas to strive for increased production value and product competitiveness. Strengthen land planning and management. Actively prepare measures to prevent natural disasters (floods, droughts, forest fires...), proactively respond promptly to all situations. Strive to achieve an increase in the added value of agriculture, forestry, and fisheries by 3.5% to 4.0% (production value increases by 4.5% to 5.0%).

3. Maintain a high growth rate in industry, innovate technology, improve industrial production efficiency, and strive to reduce production costs to enhance competitiveness, stand firm, and develop during the process of international economic integration. Develop processing industries, especially agricultural product processing, and export-oriented manufacturing industries. Strive for an increase in the added value of the industrial sector by 10.5% to 11% (production value increases by 15.5% to 16.5%).

4. Diversify and improve the quality of service activities: postal and telecommunications, transportation, tourism, finance, banking, auditing, legal consultation, labor export... Rectify and reorganize the real estate market, increase revenue for the state through this type of service. Vigorously develop the domestic market, especially rural, mountainous, and remote areas. Strive for an increase in the added value of the service sector by 7.9% to 8.2%.

5. Accelerate the restructuring of state-owned enterprises; expand the shareholding of large State-owned Enterprises and Corporations; implement bond issuance for some large Corporations.

6. Actively and proactively prepare and ensure conditions for international economic integration. Fully implement all international commitments signed. Prepare well for adaptation to World Trade Organization (WTO) membership; create a fair, transparent, stable, open, and competitive investment and business environment in the region. Attract and enhance the effectiveness of foreign direct investment. Focus on resolving difficulties to accelerate disbursement of ODA funds. Strive for an increase in export turnover by 12% to 14%.

7. Enhance the financial capacity of the country; strive to raise the domestic savings rate, mobilizing over 37% of GDP for development investment; total state budget revenue reaching 21% to 22% of GDP.

Continue to stabilize monetary conditions, reduce bad debts and overdue debts, and improve the quality of banking services.

8. Vigorously promote socialization in social fields, particularly in education, healthcare, and culture, to mobilize additional social resources for investment in these areas; at the same time, improve state management in these fields to enhance operational efficiency and better meet people's needs.

Effectively address pressing social issues. Review the implementation of national target programs, Program 135, and the project to plant five million hectares of new forests to timely adjust policies and mechanisms for implementation, enhancing program effectiveness. Increase investment in economic and social development in particularly difficult provinces in the Northern Mountains, Central Highlands, and Southwestern regions. Vigorously promote labor export activities, establish management mechanisms and policies, and strengthen training for export labor. Gradually eliminate social evils. Implement measures to reduce traffic accidents.

9. Accelerate the administrative reform process, continue to perfect the administrative system. Improve the ethics and capabilities of the cadre and civil servant corps. Enhance the effectiveness and transparency of state policies.

9. Accelerate the administrative reform process, continue to improve the administrative system. Enhance the morality and capacity of the cadre and civil servant corps. Strengthen the effectiveness and transparency of state policies.

10. Continue to strengthen national defense and security, combining national defense and security with economic and social development; continue to intensify suppression of organized criminal activities; enhance discipline in social management.

III. TASKS OF BUILDING THE STATE BUDGET ESTIMATE FOR 2005

1. The state budget revenue estimate must be accurately calculated according to the provisions of the law, based on analyzing and forecasting factors such as economic growth, market fluctuations, prices, etc.; implement measures to encourage production and business, expand markets, increase exports; implement commitments in the process of international economic integration; intensify measures to strengthen revenue management, value-added tax refund management, prevent revenue loss, smuggling, and commercial fraud.

Build the state budget revenue estimate at a mobilization level striving for 21-22% of GDP, of which tax and fee revenues should account for 20-21% of GDP. The domestic revenue estimate of ministries, central agencies, and localities (excluding oil revenue) must strive to increase by at least 12% compared to the actual implementation level in 2004.

2. The state budget expenditure estimate focuses on implementing the following main tasks:

a) The investment and development expenditure estimate must ensure sufficient funds according to the progress of implementation for key national projects; prioritize increasing investment in economic and social development in northern mountainous provinces, North Central provinces, the Central Highlands, border areas with difficulties, ethnic minority regions, provinces with wide areas and large populations, weak infrastructure; allocate funds for projects under Program 135, settlement projects, resettlement projects in reservoir areas of major hydropower projects, the project to plant five million hectares of new forests, state health facilities, especially provincial and grassroots levels, projects to preserve and prevent the deterioration of important national cultural relics; allocate sufficient counterpart funds for ODA projects; ensure sufficient funds for planning and preparation for investment; continue allocating funds for the consolidation of irrigation channels, rural transportation development, infrastructure for flood-prone areas, slow-flood areas, aquaculture infrastructure, village craft infrastructure, tourism infrastructure, market infrastructure, support trade promotion activities, provide information to expand markets,...

b) The expenditure estimate for developing science and technology, education and training, culture, healthcare, and social affairs must ensure funding to implement systems, policies, and goals and tasks that have been decided. For units with income, fully and effectively implement the financial management mechanism according to Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government, administrative agencies expand the implementation of the quota mechanism and funding according to Decision No. 192/2001/QĐ-TTg dated December 17, 2001 of the Prime Minister.

c) The expenditure estimate for implementing National Target Programs (including the National Program on Crime Prevention and Control), Program 135, the five-million-hectare forest planting project, and other major programs and projects. It must be based on overall and specific time targets to ensure effective use of budget funds.

d) Proactively allocate sufficient budgets and mobilize financial resources to implement salary reform linked to administrative reform. Ministries, central agencies, localities, and budget-using units need to thoroughly understand the goal of salary reform, considering this as a crucial task for their agencies and units; implement measures to create sources for salary reform at each agency and unit from retained revenues (at least 40%, except for the healthcare sector, at least 35%), and save regular expenses excluding salaries and salary-like allowances (at least 10%). The central budget and local-level budgets must use at least 50% of the increased revenue in 2004 and the 2005 revenue estimate compared to the 2004 estimate to create sources for implementing salary reform.

đ) The central budget and local-level budgets must allocate budget reserves according to the State Budget Law to proactively respond to natural disasters, floods, and handle urgent tasks outside the budget estimate.

Ministries, central agencies, localities, and budgetary units at all levels must build estimates in accordance with established standards and regulations; anticipate all emerging expenditure tasks in the budget year; ensure the implementation of important tasks without leaving situations where additional requests are made outside the approved budget after it has been assigned by the competent authority.

3. Regarding the work of building local government budgets at various levels:

2005 is the second year in the period of stabilizing the budget according to the State Budget Law, people's committees at all levels must build their own local government budget estimates based on stable revenue sources and expenditure tasks; the 2005 budget estimates of local levels are built based on the stable ratio of revenue distribution between different budget levels and the supplementary balance from higher-level budgets to lower-level budgets (if any) determined by the National Assembly, the Standing Committee of the National Assembly, the People's Councils, the Prime Minister, and higher-level people's committees in 2004. Therefore, when preparing the 2005 budget, localities need to closely adhere to the objectives and tasks of the state budget for 2005 mentioned above and the provisions of the State Budget Law; among which, attention needs to be paid to the following issues:

a) Building the state budget revenue estimate on the local territory: based on evaluating the implementation of revenue tasks in 2004 (domestic revenue estimate requires striving to increase by at least 5% compared to the estimate assigned by the Prime Minister); forecast economic growth and revenue sources in 2005 for each industry, field, and economic entity on the territory and new revenue sources arising in the locality to accurately calculate revenue sources for each field and each revenue item according to the system. In 2005, the domestic revenue estimate requires striving to increase by at least 12% compared to the estimated actual implementation in 2004.

b) Prepare the local budget expenditure estimate: it must be based on the economic and social development tasks of the locality for the year 2005, current expenditure standards, policies, and budget revenue estimates from the state budget within the territory, determine the local budget revenue sources according to the hierarchical division. Within the scope of the determined local budget revenue sources, prepare specific local budget expenditure estimates for each area of expenditure, in which the priority order for allocation shall be implemented as prescribed in the State Budget Law.

c) For funds from land use rights revenue sources, localities should allocate the budget expenditure estimate for basic construction investment corresponding to the planned economic and social infrastructure projects to be invested immediately at the beginning of the year.

d) Proactively calculate the source for implementing salary reform as stipulated in Clause d, Point 2, Section III, Part A of this Directive.

đ) Prepare the budget estimate for mobilizing additional investment development resources in accordance with Decree No. 60/2003/NĐ-CP dated June 6, 2003, of the Government detailing and guiding the implementation of the State Budget Law; while ensuring that the debt mobilization balance (including the anticipated mobilization in 2005) does not exceed 30% of the local provincial government's basic construction investment budget estimate (for Hanoi and Ho Chi Minh City, not exceeding 100%). Proactively allocate local budgets to repay loans and mobilized funds fully and on time, handle basic construction debts, village budgets' debts, ensuring the soundness of the local budget in accordance with regulations.

e) Prepare the budget estimate for implementing National Target Programs (including the National Program on Crime Prevention and Control), Program 135, and the project to plant five million hectares of new forests (the part implemented by localities) based on the specific goals and tasks of each target program as prescribed and the progress of the locality.

g) Based on the arrangement and allocation of local budgets; taking into account the actual implementation of the supplementary budget estimates with specific targets of the upper-level budget in 2004, prepare the budget estimate for implementing projects and important tasks proposed to be supplemented with specific targets from the upper-level budget as stipulated in Subparagraph b, Clause 2, Article 29 of Decree No. 60/2003/NĐ-CP dated June 6, 2003, of the Government detailing and guiding the implementation of the State Budget Law. The sources of direct support funds from the central budget for local budgets for investment include National Target Programs, Program 135, the five-million-hectare forest planting project, the East Sea - Island Program, other target programs decided by the Prime Minister (supporting border economic zone infrastructure, tourism infrastructure, craft village infrastructure, aquaculture infrastructure, flood-prone area infrastructure, slow-flood area infrastructure, border management service roads, border protection embankments, etc.); other large programs, projects, and proposals.

4. Along with preparing the local budget expenditure estimate, require all Ministries, central agencies, localities, and budget-using units to report, analyze, explain, and evaluate the specific effectiveness of budget expenditures. At the same time, focus on directing and organizing the settlement and approval of the 2003 budget settlement in accordance with the provisions of the State Budget Law. Promptly address any issues or violations discovered and recommended for handling by auditing and inspection agencies.

B. PROGRESS IN DEVELOPING PLANS AND ASSIGNING IMPLEMENTATION TASKS

1. Regarding the progress in developing plans:

In early June 2004, the Ministry of Planning and Investment and the Ministry of Finance issued circulars guiding the preparation of economic and social development plans and budget estimates for 2005, providing a framework for the economic and social development plan and state budget estimate for 2005 for ministries, sectors, localities, and Total Company 91 as a basis for their preparation.

In June and July 2004, ministries, sectors, localities, and Total Company 91 prepared economic and social development plans and state budget estimates for 2005 and reported them to the Ministry of Planning and Investment, the Ministry of Finance, and the agency managing the National Target Programs before July 20, 2004, for consolidation and submission to the Government.

In August 2004, the Ministry of Planning and Investment and the Ministry of Finance consolidated the economic and social development plans and budget estimates for 2005, and simultaneously proposed allocation schemes for planning indicators and the state budget.

In September 2004, the Ministry of Planning and Investment and the Ministry of Finance reported the economic and social development plan and state budget estimate for 2005 to the Government for submission to the National Assembly in accordance with the provisions of the State Budget Law.

Before November 20, 2004, the Prime Minister assigned the economic and social development plan and budget estimate for 2005 to ministries, sectors, localities, and Total Company 91 based on the National Assembly's resolutions on the state budget estimate and tasks for 2005.

Before November 25, 2004, the Ministry of Planning and Investment and the Ministry of Finance provided detailed guidance to ministries, sectors, localities, and Total Company 91.

Before December 10, 2004, ministries, sectors, and localities completed the allocation scheme for plans and budget estimates for lower levels based on the tasks assigned by the Prime Minister and the guidance of the Ministry of Planning and Investment and the Ministry of Finance.

2. Regarding division of responsibilities:

- By January 2006, submit to the Prime Minister a draft list of particularly important state-owned companies directly implementing some rights and obligations of the state owner by the Prime Minister;

Take the lead and coordinate with the Ministry of Finance to calculate and develop various schemes and major balances as a basis for guiding ministries, sectors, and localities in preparing the 2005 plan.

Take the lead and coordinate with the Ministry of Finance and relevant ministries to study and develop criteria for allocating capital for basic construction investment for central ministries and agencies in 2005; criteria for allocating supplementary targeted capital for basic construction investment in 2005 from the central budget to local budgets for supporting basic construction investment, National Target Programs, Program 135, the project to plant five million hectares of new forests, and other supplementary targeted funds, submit to the competent authority for decision-making, serving as a basis for developing allocation schemes and assigning targeted basic construction investment capital for 2005 to localities.

Organize guidance on the preparation and consolidation of the 2005 economic and social development plan.

Take the lead and coordinate with the Ministry of Finance to draft the investment development plan and the capital allocation scheme for basic construction projects; take the lead together with the Ministry of Finance and relevant ministries and agencies managing the National Target Programs to draft plans and capital allocation schemes for programs and projects under these programs. Consolidate the capital allocation scheme for the National Target Program budget estimates.

Work with ministries, sectors, and localities on the socio-economic development plan, investment, and the National Target Program for the year 2005.

b) The Ministry of Finance:

Guide ministries, sectors, and localities in evaluating the implementation of the state budget estimate for the year 2004; prepare a rough estimate of the state budget and notify the revenue and expenditure budget estimates for the year 2005 to ministries, sectors, and localities.

Take the lead and coordinate with the Ministry of Planning and Investment and related agencies to draft and consolidate the state budget estimate for the year 2005; work with ministries and central agencies regarding the state budget estimate. Work with provincial people's committees when requested by them (in accordance with the State Budget Law).

c) Ministries, state agencies, and State-owned enterprises 91:

Coordinate with the Ministry of Planning and Investment and the Ministry of Finance to develop economic and social development tasks and state budget estimates within their respective areas of responsibility.

Ministries and agencies managing the National Target Programs, Program 135, the 5 million hectare forest project, and other major programs and projects shall take the lead and coordinate with the Ministry of Planning and Investment and the Ministry of Finance to work with relevant ministries, sectors, and localities on assessing the implementation over the past period, tasks, budget estimates, and funding allocation schemes for the year 2005 within their areas of responsibility, and submit them to the Ministry of Planning and Investment and the Ministry of Finance before July 30, 2004.

Ministries and state agencies, based on the calculation of exploitable resources, shall build economic and social targets, propose solutions, new mechanisms and policies, or recommend amendments and supplements to existing policies and submit them to the competent authority for issuance before the preparation of the state budget estimate (before July 1, 2004), and notify the Ministry of Planning and Investment, the Ministry of Finance, and related agencies as a basis for preparing plans and state budget estimates.

d) Provincial People's Committees directly under the Central Government:

Guide, organize, and direct levels and sectors at the local level to develop socio-economic development plans and state budget estimates to report to central agencies as required; simultaneously submit to the competent authority for decision.

The Prime Minister requests that ministers, heads of ministerial-level agencies, heads of government agencies, and chairpersons of provincial people's committees organize the implementation of this Directive./.