DIRECTIVE

On Urgent Measures to Control the Rate of Price Increase in the Market

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From the beginning of 2007 until now, the Government has directed the implementation of many measures to stabilize prices; however, the consumer price index for the first seven months of 2007 increased by 6.19%. The global economic forecast for the last months of 2007 still harbors unpredictable fluctuations; the demand and prices of raw materials, fuels, and materials for production and daily life, especially those goods that our country must import in large quantities such as oil, fertilizers, steel billets, continue to rise at a high rate. In addition, difficulties, challenges, and instabilities caused by natural disasters and epidemics also contribute to the pressure of price increases.

To control the rate of price increase, contributing to macroeconomic stability and people's livelihoods, the Prime Minister issues the following directive:

1. The Ministry of Planning and Investment:

a) Lead and coordinate with ministries managing production to continue organizing the implementation of solutions to promote production and business; take proactive measures to ensure the balance of the economy, primarily the balance of goods, money, the balance of payments, and state budget expenditures;

b) Review and concentrate investment capital on important projects; resolutely adjust the capital of construction works that have been delayed (and not yet yielding immediate results) to projects with urgent needs that need to be put into use and generate high efficiency soon. Coordinate with the Ministry of Finance and relevant agencies to promptly resolve issues related to mechanisms and policies to accelerate the progress of implementing and disbursing state budget investment funds, government bonds, state credit, and ODA funds, particularly the disbursement of investment projects in the transportation and agriculture sectors; implement the allocation of capital for projects encountering payment procedures according to their progress.

c) Direct the General Statistics Office to develop a plan to calculate the social consumer price index in accordance with international practices to submit to the National Assembly's twelfth session for consideration and amendment of the Law on Statistics at its second meeting.

2. The State Bank of Vietnam:

a) Review monetary management policies to adopt appropriate measures to control the growth rate of total means of payment and credit mobilization; implement open market operations measures to regulate the amount of money in circulation at a reasonable level; maintain stable exchange rates and key interest rates of the Vietnamese currency, preventing sudden changes in the money market;

b) Effectively implement measures to control inflation in accordance with the Prime Minister's directives in Circular No. 3678/VPCP-KTTH dated July 3, 2007, issued by the Government Office.

3. Ministry of Finance:

a) Immediately organize the issuance of government bonds, treasury bonds, and treasury bills with various terms to attract idle money in circulation based on rapid and effective disbursement of collected funds and compliance with current investment procedures and processes. Implement the reduction, adjustment, and recovery of capital from ministries, agencies, and units that fail to comply with the prescribed time limits for capital regulation and adjustment;

b) Coordinate with the Ministry of Agriculture and Rural Development to ensure funding for purchasing vaccines, inoculation, and the destruction of diseased livestock in epidemic areas; supplement funding for importing avian influenza H5N1 vaccines for the 2007 inoculation plan; implement support mechanisms for pig blue ear disease prevention and control similar to those for foot-and-mouth disease in livestock;

c) Continue to implement measures to strengthen the management and supervision of stock market activities and regulate supply and demand for securities, creating conditions for the stock market to develop stably and sustainably; select reputable companies to issue stocks to attract circulating money for production;

d) Continue to implement the transition to regular pricing for various types of oil but must proactively discuss with the Ministry of Trade and production management ministries to decide on an appropriate timing for adjustments; in the third quarter of 2007, discuss with production management ministries, major industry groups, and corporations about reasonable management measures for the prices of important materials and goods, such as electricity sales prices, coal prices for cement, phosphate fertilizer, paper, bus passenger transport fares, clean water prices, postal service fees; unify with the Posts and Telecommunications Ministry and relevant agencies to reduce telecommunications service fees and other goods and services in the third quarter of 2007;

đ) Immediately establish inspection teams to monitor the factors forming high prices for goods such as steel and gas; simultaneously strengthen monopoly price control; promptly detect and handle according to the Price Regulation Ordinance any unreasonable pricing or collusive pricing behavior and speculative hoarding that drives up prices;

e) Implement reduced import tariffs on meat, poultry, eggs, and animal feed (corn, dried oil...); extend the deadline for value-added tax payments for imported materials and goods used as inputs for production; if exceeding authority, report to the Prime Minister for decision;

g) Direct the General Customs Department to implement operational measures to ensure immediate clearance for imported foodstuffs and essential consumer goods;

h) Lead and coordinate with ministries and localities to strictly control revenue and expenditure of the state budget; strictly implement measures to save, prevent waste, and ensure that the budget deficit remains within 5% of GDP;

i) Review and adjust import tariffs reasonably from August 2007 to increase supply for the domestic market;

4. Ministry of Trade:

a) Lead and coordinate with ministries, localities, industry associations, and enterprises to implement comprehensive measures to expand markets, boost exports, improve the trade balance, and limit the trade deficit; ensure smooth market and goods circulation.

b) Monitor closely the fluctuations in domestic and international market prices; organize well the work of analyzing and forecasting supply and demand for goods; review the balance of supply and demand for important goods and services, and goods with increased prices to ensure specific measures to maintain supply-demand balance, particularly food items; propose to the Ministry of Finance to reduce import tariffs on food and animal feed products that are in short supply.

c) Strengthen market management and combat commercial fraud; inspect product quality according to published standards, combined with price labeling, registration, and sales at labeled prices.

5. The Ministry of Industry:

Direct the implementation of comprehensive measures to prevent power shortages for production and daily life. Focus resources on developing industries with competitive advantages and high export growth rates such as electronics manufacturing, electronic components, computers, software, electrical wires and cables, plastic products, and handicrafts. Direct steel, fertilizer, coal, and other key product manufacturing sectors to implement specific measures to increase productivity, reduce costs, and lower production costs. Adjustments to coal prices for large consumers should be carefully considered regarding the timing of implementation to avoid factors that could increase the social consumer price index.

6. The Ministry of Agriculture and Rural Development:

a) Concentrate on directing localities to implement all measures to control avian influenza, foot-and-mouth disease in livestock, and blue ear disease in pigs; simultaneously strengthen inspections and controls to promptly identify and isolate and handle outbreaks from their initial appearance; proactively coordinate with relevant agencies (meteorology and hydrology, National Search and Rescue Committee, naval forces...) to prevent and mitigate damage caused by natural disasters;

b) Lead and coordinate with the Ministry of Planning and Investment, the Ministry of Finance to eliminate unnecessary and unreasonable procedures to accelerate the disbursement progress of investment projects under its management;

c) Lead and coordinate with the Ministry of Trade, People's Committees of the Mekong Delta provinces to accurately grasp the quantity of commercial rice to manage the export schedule reasonably, ensuring food security and maintaining stable domestic rice prices.

7. The Ministry of Transport:

Lead and coordinate with the Ministry of Planning and Investment, the Ministry of Finance to implement necessary measures to accelerate the disbursement progress of investment projects under its management.

8. The Ministry of Health:

a) Organize the implementation of measures to stabilize drug prices for disease prevention and treatment in accordance with the Law on Medicines. Organize inspection teams to monitor the market, combat speculation, monopoly, or collusive monopoly, and prevent unreasonable increases in drug prices in the market and at healthcare facilities. Continue to rationally arrange the distribution and supply system for drugs, reducing intermediary distribution levels. Inspect and strictly penalize enterprises that fail to comply with state regulations on drug pricing;

b) Strengthen inspection and supervision of food safety. Suspend operations and impose strict penalties on establishments violating food safety standards.

9. The Ministry of Education and Training:Check the regulation of textbook and school supplies prices to prevent speculative price hikes.

10. Industry Associations:Coordinate with businesses to implement specific measures to improve production and business management processes, increase productivity, reduce costs, lower production costs, and contribute to controlling product price increases.

11. Chairpersons of Provincial People's Committees:

a) Focus on directing the strict implementation of disease prevention measures and timely support for disease control efforts as stipulated in Circular No. 645/TTg-NN dated May 24, 2007, and Circular No. 779/TTg-NN dated June 19, 2007, of the Prime Minister on avian influenza and human influenza A prevention and control; Circular No. 962/TTg-NN dated July 18, 2007, of the Prime Minister on pig disease prevention and control; and Circular No. 29/BNN-CĐ dated July 23, 2007, of the Ministry of Agriculture and Rural Development on blue ear disease in pigs. Proactively prevent and positively support disaster prevention and mitigation efforts;

b) Organize inspection teams to prevent producers and traders from taking advantage of government price adjustment policies and market fluctuations to unreasonably increase prices, violate laws, and harm consumer and state interests.

12. The Ministry of Culture and Information in coordination with the Central Propaganda Department:Direct mass media organizations to organize publicity to support price management and control, curb inflation, and strive to achieve the National Assembly's target of a lower price increase rate than economic growth.

The Ministry of Finance leads and coordinates with the Ministry of Planning and Investment, the Ministry of Trade, and related agencies to monitor the implementation of this Directive's contents and regularly compile and report at monthly Government meetings. Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, chairpersons of provincial people's committees, heads of state budget-using organizations, chairpersons of boards of directors, general managers, and directors of enterprises are responsible for implementing this Directive./.