Directive No. 25/1998/CT-TTg on the development of socio-economic plans and state budget estimates for 1999

DIRECTIVE

Regarding the development of plans for economic and social development and

state budget for 1999 

Implementing the resolutions of the National Assembly on tasks and the state budget for 1998, the Government has issued new mechanisms and policies to enhance internal resources, focusing on directing efforts to resolve bottlenecks in each specific stage of operation. In the past six months, with the high efforts of the entire Party, military, and people, we have initially overcome the severe challenges posed by natural disasters, the financial and monetary crisis in the region, and our own weaknesses, maintaining an economic growth rate of 6.64%, ensuring political stability and social security.

However, the situation of the economy and society remains difficult and complex; important indicators for the first half of the year generally fall short compared to the same period last year and the plan.

The remaining tasks for the second half of the year are extremely heavy. On one hand, it is necessary to continue seeking solutions to minimize the negative impacts of the financial and monetary crisis in the region, proactively dealing with abnormal weather conditions; on the other hand, it is essential to effectively address the shortcomings in economic management and operation from central to local levels, striving to maintain the economic growth rate and social stability.

Ministries, sectors, localities, and grassroots units need to focus on implementing the decisions of the Government at the regular meeting in June 1998 regarding specific measures to accelerate the implementation of the 1998 plan.

I. CONTENT AND MAIN TASKS OF THE PLAN FOR 1999

1. Guiding ideology for building the 1999 plan

The year 1999 will face many new and severe difficulties and challenges that must be overcome to create a foundation for successfully completing the five-year plan from 1996 to 2000.

Therefore, when building the 1999 plan, the following guiding ideology should be thoroughly implemented:

First, closely adhere to the guiding thoughts of the five-year plan from 1996 to 2000, deeply understand Resolution No. 4 of the 4th Plenary Session of the Central Committee of the Communist Party of Vietnam (8th term), continue to vigorously promote the renewal process, enhance internal strength, improve the effectiveness of international cooperation, practice thrift, and strive to achieve economic and social development goals by the year 2000.

Second, maintain an appropriate economic growth rate in line with capacity and the new situation, ensuring stable and sustainable development.

Third, create new impetus for development, fully unleash productive forces, maximize domestic resources for economic and social development requirements, while curbing declines in certain industries and enhancing production capacity and market competitiveness of products both domestically and internationally.

Fourth, improve the health of the financial and monetary sectors; limit the adverse effects of the regional economic crisis; thoroughly economize in production and consumption; enhance the efficiency of the state apparatus, strengthen coordination among sectors and levels in planning and management.

2. Main tasks of the 1999 economic and social development plan

- Continue to prioritize agricultural development to serve as a foundation for stable and economic and social development; resolve difficulties in industrial production, implement specific solutions for each industry and product to increase output and competitiveness, viewing this as a key task to generate economic development potential. Strive to maintain an economic growth rate not lower than that of 1998.

- Create favorable conditions to boost exports by all economic components. Promote research, trade promotion, market expansion, increase export turnover, and foreign currency earnings. Implement reasonable protection policies for domestic production consistent with the process of joining AFTA and other international commitments. Continue to intensify anti-smuggling and commercial fraud efforts, apply stamping measures for goods where domestic production can adequately supply the market.

- Efficiently mobilize and utilize investment capital, focusing on domestic sources; accelerate the restructuring of state-owned enterprises, implement shareholding according to the planned program; create a more favorable environment to attract direct foreign investment; adjust the investment structure towards prioritizing export-oriented production, projects that quickly generate economic benefits, and rapid capital recovery, and support investment development in difficult areas. Ensure matching funds and land clearance conditions to disburse committed ODA funds promptly; simultaneously, apply measures to enhance the effectiveness of using these funds. Strictly manage foreign borrowing and repayment by enterprises.

- Develop and stabilize the national financial system, collect taxes and fees appropriately into the budget. Thoroughly reduce recurrent expenditures to increase investment in development. Enhance the capacity and quality of banking operations; mobilize various sources of capital to meet the needs of the economy, particularly long-term and medium-term capital. Pilot stock market operations in Hanoi and Ho Chi Minh City. Stabilize the value of the currency, keep inflation below two digits.

- Continue to address urgent issues in the social sector, focusing on measures to create additional jobs for workers, implement grassroots democracy. Develop education, culture, information; improve the living standards of residents; implement programs for socio-economic development in poor communes; care for and protect public health; effectively prevent social evils.

- Integrate the objectives of national programs in the same area, ensuring the practical effectiveness of each program. Transfer programs and targets from 1999 that are no longer national programs into the regular tasks of ministries, sectors, and localities.

- Consolidate national defense and security, ensure order and discipline in economic and social activities.

3. State Budget

- The State budget revenue estimate must be constructed in accordance with the current collection system and tax laws effective from 1999.

Strive for the tax and fee revenue level to increase more than that of 1998 and reach approximately 19-20% of GDP, consistent with the production and business growth rate and inflation rate. The export and import tax revenue estimate must take into account factors related to the ongoing process of joining AFTA and other international commitments. Domestic revenue sources must be developed based on actively exploiting all available revenue sources and preventing revenue loss.

Tax and fee revenues must ensure reasonable, frugal regular expenditures, repay maturing debts, and continue to allocate an appropriate proportion for investment development accumulation.

- The regular expenditure estimate must be calculated tightly, reasonably, and frugally, especially in administrative management expenses; priority should be given to education and training, science, technology, and environmental undertakings according to the resolutions of the 2nd Plenary Session of the Central Committee of the Party (8th term).

Regular expenditures must increase at a lower rate than the growth rate of investment development expenditures and not exceed 70% of the tax and fee revenue level. Reduce state budget support for scientific, health, and training activities of state-owned enterprises by 50% compared to 1998.

The construction investment estimate for basic projects funded by the state budget in 1999 should prioritize capital for key projects and counterpart funds for ODA projects according to signed agreements; concentrate capital on projects scheduled for completion and use within the year; do not allocate capital for projects lacking sufficient conditions as stipulated; minimize the commencement of new projects in groups B and C; allocation of capital for group C projects must ensure over 70% for ongoing and newly commenced projects to be completed within the year.

Strive to achieve the budget reserve level according to the State Budget Law, allocate necessary and reasonable additional funding to the Financial Reserve Fund.

- The work of establishing and deciding on the state budget estimates at all levels of local government must comply with the State Budget Law (as amended and supplemented); the percentage (%) distribution of revenue sources between the central and local budgets should remain stable as in 1998; the amount of supplementary funding from the central budget to balance local budgets (if any) should be increased by 6% compared to the supplementary funding allocated in 1998.

For localities, when implementing new tax laws where local state budget revenues cannot guarantee expenditure requirements, the central budget will supplement to ensure the 1999 expenditure level does not fall below the 1998 budgeted expenditure and additional expenditures due to the implementation of new national policies. During implementation, if local revenue decreases significantly beyond the planned amount, the Ministry of Finance will report to the Prime Minister for specific handling. - By August 15, 1998, ministries, sectors, General Corporation 91, provincial People's Committees directly under the central government shall report their economic and social development plans and state budget estimates for 1999 to the Ministry of Planning and Investment and the Ministry of Finance for consolidation and submission to the Government.

II. PROGRESS IN BUILDING THE PLAN AND ASSIGNMENT OF IMPLEMENTATION

1. On progress

- During this period, the Ministry of Planning and Investment and the Ministry of Finance shall organize meetings with ministries, sectors, and localities to promptly consolidate plans for submission to Party and State leadership agencies; simultaneously, they shall propose allocation schemes for plan indicators and the budget to be decided by the Standing Committee of the National Assembly after the National Assembly approves the 1999 economic and social development plan and state budget estimate.

- The Ministry of Planning and Investment shall coordinate with the Ministry of Finance to calculate and develop major balancing schemes to serve as a basis for guiding ministries, sectors, and localities in developing the 1999 plan.

2. On division of responsibilities for implementation

- The Ministry of Planning and Investment shall guide the development and consolidation of the economic and social development plan and work with ministries, sectors, and localities on this plan; it shall lead coordination with the Ministry of Finance to forecast investment development plans and allocate construction investment funds.

- The Ministry of Finance shall announce the inspection figures for the 1999 state budget revenue and expenditure estimates and guide ministries, sectors, and localities in developing the state budget estimates; it shall lead coordination with the Ministry of Planning and Investment to work with provinces and cities regarding local state budget revenue and expenditure estimates, and work with central ministries and sectors regarding the proposed regular expenditure allocations and consolidation of state budget revenue and expenditure estimates.

- Other ministries and sectors shall cooperate with the Ministry of Planning and Investment and the Ministry of Finance to develop economic and social development tasks and budget estimates within their respective areas of responsibility.

- Ministries and principal agencies of national programs shall cooperate with the Ministry of Planning and Investment and the Ministry of Finance to work with central ministries, agencies, and localities related to tasks and budget estimates for 1999 to implement programs within their areas of responsibility. State agencies shall, according to their functions, develop economic and social indicators and new systems and policies or amend and supplement existing systems and policies as bases for planning and budget estimates, and notify the Ministry of Planning and Investment, the Ministry of Finance, and relevant ministries and agencies before the budget estimate preparation deadline.

- Provincial People's Committees directly under the central government shall guide, organize, and direct the Provincial Departments of Planning and Investment and Finance and Price Control to closely coordinate with other departments and sectors in developing economic and social development plans and state budget estimates for submission to the People's Council for decision.

The Prime Minister requests ministers, heads of ministerial-level agencies, heads of agencies under the Government, and chairpersons of provincial and municipal people's committees directly under the central government to organize the implementation of this Directive.

The Prime Minister requests the ministers, heads of ministerial-level agencies, heads of government agencies, Chairpersons of People's Committees of provinces and centrally governed cities to implement this Directive.