Resolution No. 25/2008/NQ-CP of the Government's regular monthly session in October 2008

RESOLUTION

Regular Government Meeting in October 2008

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 On November 1, 2008, the Government convened its regular meeting for October to discuss and adopt the following issues:

1. The Government heard the Minister of Planning and Investment's report on supplementary information regarding the implementation of economic and social tasks in 2008 and the plan for economic and social development in 2009; the report on the economic and social situation in October and the first ten months of 2008; the Minister of Finance's report on the adjustment of the state budget implementation in 2008 and the draft state budget for 2009; the report on the implementation of macroeconomic stability policies and inflation control in October and the first ten months of 2008; objectives, tasks, and solutions for the remaining months of 2008.

Under the concentrated, resolute, and flexible guidance and management of the Government, the economic and social situation in October and the first ten months of 2008 achieved positive results. The economy maintained its growth momentum. Agriculture continued to develop. Compared to the same period last year, industry grew significantly, with industrial production value in October increasing more than September, and October saw a 15.9% increase; export turnover reached 53.8 billion USD, up 36.8%; foreign direct investment attracted strongly, reaching 59.3 billion USD, up 426.6%. Inflation was initially contained, with the price index in October decreasing by 0.19%. Macroeconomics were basically stable. Interest rates, exchange rates, and major balances of the economy were maintained, and the banking system and securities market continued to operate stably and normally. Budget revenue was satisfactory; many social sectors showed positive changes...

Based on the current situation and prospects for the last two months, the Government unanimously assessed that the economic growth rate in 2008 could reach approximately 6.7%, including agriculture growing by 3.6%, industry and construction growing by 7.5%, and services growing by 7.3%. Export turnover reached about 64 billion USD, the trade deficit for the whole year was 19 billion USD, equivalent to about 29.7% of total export turnover; it is forecasted that the consumer price index for the entire year would increase by about 22%. It can be said that with these achievements, under the leadership of the Party, the flexible and effective guidance and management of the Government, the efforts of the people, businesses, and the entire political system, at this point, our country has initially achieved the set goal of containing inflation, stabilizing macroeconomics, ensuring social welfare, and maintaining sustainable growth.

From mid-September onwards, the world economic situation has shown very rapid and new manifestations. The financial crisis, credit crunch, and global economic downturn have spread widely, making the global economy in 2009, according to many forecasts, more difficult and with lower growth compared to 2008. This situation will negatively impact Vietnam's economic growth, macroeconomic stability in the last months of 2008 and throughout 2009, specifically manifested in areas such as: the prices of some key export commodities declining (oil, agricultural products...) causing difficulties for production and disrupting the budget balance; the purchasing power of many global markets declining, directly adversely affecting exports; investment, particularly foreign direct investment and private sector investment, will slow down, making project implementation more challenging; tourism growth will be slower than the same period...

However, amidst the global difficulties, Vietnam also has certain advantages due to being located in Asia, which is less affected by the global financial crisis and economic downturn; having a stable political and social environment; the domestic economy still has latent potential in labor, capital, materials, energy, markets...; especially, under conditions of falling prices, we have the opportunity to enhance competitiveness and open new markets. The Government requests that in the future, close monitoring of global economic trends and domestic economic situations should continue, improving the ability to forecast economic and social developments, leveraging advantages, overcoming difficulties, being dynamic and creative in finding appropriate solutions, and issuing resolute and specific directives to achieve the set goals and tasks.

Given the global context and domestic situation mentioned above, based on the targets and plans for 2006-2010 set out in the Resolution of the 10th National Congress of the Communist Party of Vietnam and the Resolution of the National Assembly, the economic and social situation in October and the first ten months of 2008, and the near-term outlook, the Government has unanimously decided to adjust the targets, tasks, and some key indicators of the 2009 economic and social development plan, as well as some organizational measures for implementation as follows:

The general objectives for economic and social development in 2009 are to continue to control inflation and stabilize the macro-economy; proactively prevent economic downturns, maintain reasonable and sustainable growth; ensure social welfare; promote active and effective cooperation and integration into the international economy; maintain political stability, ensure national defense, security, and social order; create conditions to successfully implement the five-year socio-economic development plan from 2006 to 2010.

The Government has unified the target of economic growth for 2009 at approximately 6.5%. Based on this main target and considering the actual situation, the Ministry of Planning and Investment will coordinate with relevant ministries and agencies to determine other targets appropriately and feasibly, particularly focusing on export targets, attracting investment capital, job creation, poverty reduction, environmental protection, clean water... The Ministry of Finance will present to the Government a report to the National Assembly on the principles of flexible state budget management based on the actual fluctuations of world oil prices compared to the budget estimates.

To achieve these goals, based on continuing to thoroughly implement and effectively carry out Conclusion No. 22-KL/TW, Conclusion No. 25-KL/TW of the Politburo, Resolution of the 7th Plenary Session of the Central Committee of the Party (10th term) on agricultural development, farmers, and rural areas, Resolution No. 10/2008/NQ-CP, and Resolution No. 20/2008/NQ-CP of the Government, the Government requests that all ministries, sectors, and localities focus on implementing several measures in the remaining months of 2008 and in 2009.

- Implement a strict but flexible monetary policy, on one hand ensuring control over inflation, and on the other proactively preventing potential economic downturns, while also achieving macroeconomic stability and contributing to maintaining reasonable economic growth. In the short term, it is necessary to continue reasonably reducing credit interest rates according to the principle of balancing anti-inflation goals with ensuring capital sources, benefits, and favorable conditions for business operations, especially for small and medium-sized enterprises, export-oriented production enterprises, and those creating many jobs. Measures should be taken to restructure repayment terms according to current regulations for businesses and farmers to overcome difficulties, restore, and maintain business operations. Manage foreign exchange rates flexibly to ensure both macroeconomic stability and encouragement of exports. Firmly implement price management according to market mechanisms, carefully consider appropriate timing to implement market pricing mechanisms for coal and electricity in 2009, and improve the price management mechanism appropriately.

- Implement tax policies appropriately to support and encourage production and business development and promote exports. Propose to the National Assembly to instruct the Government to guide and organize the implementation of corporate income tax regulations in 2009 in the following directions: temporary tax reduction; extension of payment deadlines; non-imposition of taxes on certain entities. These measures mainly apply to small and medium-sized enterprises, businesses operating in industries and fields facing difficulties, in rural areas, and those creating many jobs...

- Ministries, sectors, and localities must pay attention to developing both external and domestic markets to enhance product consumption. It is necessary to combine tax, monetary, and market policies to promote exports; implement specific measures to expand export markets, particularly focusing on countries and regions less affected by financial and credit crises such as China, ASEAN, the Middle East, Russia, Africa... Carefully consider and calculate solutions to increase domestic demand through promoting infrastructure construction such as transportation and electricity in a correct and effective manner to consume surplus materials and goods; implement housing programs, raise rice and agricultural product purchase prices for farmers, and continue implementing other social welfare policies to increase the income of the poor and rural areas...

- Continue to focus on resolving difficulties and obstacles in procedures and mechanisms in basic construction investment to accelerate the progress and disbursement speed of large projects using government bonds and state budgets, overcoming delays and wasteful investments. Implement designated bidding for projects for enterprises proven to have actual capabilities.

- Continue to effectively implement social welfare policies and other social sectors, maintaining the living standards of the people. Promptly issue and implement mechanisms and policies to quickly and sustainably reduce poverty in districts with high poverty rates, unemployment insurance policies starting from 2009. The Government has unified the postponement of the implementation of the adjustment of the minimum wage (650,000 VND/month) by about one month compared to the previously proposed schedule, and has not yet implemented the civil service allowance system.

- Enhance the effectiveness of ideological work, information dissemination, and propaganda. The Ministry of Information and Communications will direct the good implementation of information and propaganda work to create consensus within the entire political system and among the people, ensuring social stability. All ministries, agencies, provinces, and centrally-administered cities need to proactively and promptly provide information to guide public opinion and ensure accurate reporting by the press on economic and social issues, avoiding incorrect and unbeneficial news for the country and the Government's leadership and management, especially sensitive issues related to macroeconomic sectors, to build trust in the Party's leadership and the Government's guidance and management.

Assign the Ministry of Planning and Investment and the Ministry of Finance to absorb the opinions of Government members, complete the supplementary report on the 2008 economic and social situation and the 2009 socio-economic development plan, the adjusted implementation report of the state budget for 2008, and the 2009 state budget draft for submission to the Politburo for comments before presenting to the National Assembly for approval at the fourth session of the 12th National Assembly.

2. The Government has examined and approved reports on: the situation regarding administrative reform work in October; inspection, complaint resolution, accusation handling, and anti-corruption efforts in October; the implementation status of the October work program and Government resolutions from the regular session in September, presented by the Ministers of the Ministry of Home Affairs, the Government Inspectorate, and the Minister-Chairman of the Government Office.

The Government requests Ministries, sectors, and localities to urgently promulgate and implement action programs of Ministries and agencies to implement Resolution No. 5 of the 10th Central Committee on accelerating administrative reform, enhancing the effectiveness and efficiency of state management; prepare for the implementation of the pilot project to not organize People's Councils at the district, town, and ward levels and have citizens directly elect the Chairmen of People's Committees at the commune level after approval by the National Assembly; implement Decrees on the functions, tasks, powers, and organizational structures of Ministries and agencies; continue implementing plans to simplify administrative procedures across state management areas during the 2007-2010 period.

Focus on preparing and perfecting draft projects and related work on citizen reception, complaint and accusation resolution, and anti-corruption efforts to submit to the Government and the Prime Minister.

Ministries, agencies, and localities must urgently review tasks and projects that need to be implemented in the last two months of the year, focusing on those related to key solutions in Government guidance and management, contributing directly to completing the 2008 socio-economic development plan; prepare reports evaluating the results of implementing targets, tasks, and solutions in Government guidance and management in 2008, proposing tasks and solutions for implementation in 2009; simultaneously conduct mid-term reviews of the first year of implementing the Government Work Regulations issued together with Decree No. 179/2007/NĐ-CP dated December 3, 2007.

The Government requires Members of the Government, in addition to directing Ministries and agencies to continue preparing reports and draft laws to submit to the National Assembly, to closely monitor and prepare well the relevant contents to explain and answer questions from the National Assembly during the fourth session, helping National Assembly deputies and voters nationwide understand clearly and correctly the Government's and its members' guidance, management, and state administration over the past period./.