Directive No. 26/1999/CT-TTg on solutions to overcome difficulties to promote investment, production development, and export

DIRECTIVE

Regarding solutions to address difficulties to accelerate investment, production development, and exports

From August 23 to 24, 1999, the Prime Minister chaired a meeting with State-owned Corporations to discuss measures to resolve difficulties and accelerate investment, production development, and exports.

According to reports from the Ministry of Industry, the Ministry of Planning and Investment, and the Central Steering Committee for Enterprise Management Reform over the past few years, the industrial growth rate and investment have shown a declining trend: In 1996, it increased by 14.5%, in 1997 by 12.6%, in 1998 by 10.3%, and in the first seven months of 1999 by 10.4% (enterprises under the Ministry of Industry only reached 4.3%). The two major economic centers, Hanoi and Ho Chi Minh City, are also in similar conditions. Production in many industrial sectors still faces numerous difficulties, especially in state-owned enterprises; budgetary investment capital and credit investment capital are being implemented slowly; stimulus measures for investment and consumption have not been effectively promoted, leading to a slowdown in purchasing power.

Some main reasons for the slowing growth rate include: The industry sector and investment field continue to be affected and must confront many challenges posed by the financial and monetary crisis in the region; equipment and technology in many factories are outdated, product quality is poor, labor productivity is low, costs are high, and prices are high. Products produced by domestic enterprises not only have to compete with smuggled goods, tax-evading goods, and fraudulent trade but also with products from foreign-invested enterprises sold on the domestic market. Meanwhile, the organizational structure of production and business operations of State-owned Corporations still has many shortcomings.

To address difficulties and create favorable conditions for enterprises to strive to complete their tasks in economic and social development in 1999, the Prime Minister instructs ministries, sectors, provincial people's committees, centrally governed cities, and State-owned Corporations and Enterprises to implement the following urgent tasks:

1. Ministries, sectors, and localities are responsible for:

+ On the basis of the major solutions of the Government clearly stated in Resolution No. 08/1999/NQ-CP and the opinions of ministries responding to the proposals of State-owned Corporations at the meeting on August 23-24, 1999, each ministry must proactively coordinate with relevant agencies to issue legal documents to resolve difficulties for enterprises from mechanisms and policies to specific tasks within their authority, creating conditions for enterprises to promote investment, production, and business operations to develop steadily, maintain growth rates, and fulfill the economic and social development plan for 1999 and subsequent years.

+ Review and approve projects with effectiveness according to their authority for State-owned Corporations to implement according to their plans. At the same time, direct disbursement work to ensure that projects are not delayed.

+ Continue to guide State-owned Corporations to improve their organizational structures and arrange member units to complete assigned tasks.

+ The Ministry of Finance and the State Bank have the responsibility to study and submit to the Prime Minister for issuance of the "Financial Mechanism for State-owned Corporations" based on the principle that State-owned Corporations accumulate capital for development and are subject to supervision by relevant state management ministries and financial agencies.

+ The Office of the Government is responsible for monitoring and inspecting the results of handling proposals, production and business operation bottlenecks, and investment of State-owned Corporations, reporting monthly on results and proposing contents to resolve difficulties for consideration and decision by the Prime Minister.

2. State-owned Corporations are responsible for:

+ State-owned Corporations must take responsibility for developing investment and production and business strategies until 2010. When formulating strategies, they must study domestic and international markets, trends in world and regional development. Development strategies must align with the national economic and social development strategy currently being drafted to be submitted to the Ninth Party Congress. Relevant state management ministries must approve these strategies, and some important industries must be reported to the Prime Minister for review and approval. State-owned Corporations must enhance their competitiveness with products from foreign-invested enterprises operating domestically and products from regional countries. They must have programs and plans to modernize technology and equipment to increase production capacity, improve product quality, and reduce costs.

+ As the country is integrating, enterprises must urgently prepare all necessary conditions to join the World Trade Organization (WTO) and the ASEAN Free Trade Area (AFTA)... State-owned Corporations must determine their competitive capabilities and anti-monopoly measures. They must strive to produce high-quality goods and adopt various methods to modernize equipment, increase labor productivity, reduce costs, lower prices, and perform marketing both domestically and internationally to develop production.

+ To play a leading role in the economy, State-owned Corporations must perform better and more efficiently than enterprises in other economic sectors (products produced must be better, higher quality, cheaper...). Strive to meet ISO-9000, ISO-9001, and ISO-9002 standards, which are extremely important and crucial for production and business operations, serving as passports for exporting goods to international markets.

In order to play a leading role in the economy, State Corporations must perform better and more efficiently than other economic sector enterprises (products produced must be superior, of higher quality, and cheaper...). Striving to achieve ISO-9000, ISO-9001, and ISO-9002 standards is a crucial matter and a matter of survival in production and business, serving as a passport for exporting goods to international markets.

The State-owned Corporations need to study diversifying business models, closely integrating production-processing-consumption processes which are inherently interconnected and cannot be separated into individual stages. We have established many good models, requiring the Ministry of Agriculture and Rural Development, the Ministry of Industry to summarize and draw lessons from the linkage models between factories and raw material regions such as the Lam Son sugar factory, tobacco leaf regions with tobacco processing factories, cotton regions with yarn factories, etc. It is necessary to develop these model experiences in other industries such as coffee, rubber, paper, milk production and processing, etc., to ensure stable production based on the continuous development of raw material regions, ensuring the interests of farmers.

There must be a program for training cadres and deploying capable cadres into key positions within enterprises to meet new situations and tasks, while resolutely eliminating corrupt, lazy, and incompetent cadres. Continue restructuring and equitizing state-owned enterprises and implementing pilot programs for selling, contracting out, and leasing small and medium-sized enterprises.

3. Consumption of surplus products:

Currently, although the scale of production in various sectors is still small, supply has exceeded demand, and product consumption depends on people's living standards. Therefore, the Government has adopted the following policies:

- Stimulating demand through basic construction investment, mobilizing domestic capital to ensure that investment exceeds the plan. Sectors such as Transportation, Water Resources, Electricity, Posts and Telecommunications, Oil and Gas, which account for a large proportion of basic construction investment in society, must strive to complete their plans beyond the stipulated levels for 1999. Investment in basic construction this year is not lacking, so it is unacceptable to allow approved and planned projects with effective results to fail to meet their investment plans. State-owned corporations need to urgently and strictly review to develop solutions to promote projects that are lagging behind and not meeting their schedules, and immediately supplement projects that have completed all procedures to start implementation from now until the end of the year.

- Stimulating demand through consumption: Our people are still poor, so improving purchasing power requires studying and implementing diverse sales methods, including deferred payment sales methods. The urgent and necessary investment needs in rural areas such as roads, irrigation canals, electricity supply networks, schools, health stations, housing, etc., require the construction materials production sector to study mechanisms and policies to provide construction materials for this vast market.

With a high sense of responsibility from ministries, sectors, and local People's Committees, with the spirit of actively overcoming difficulties to develop production, expand investment, and open up markets, we believe that the remaining months of 1999 will bring about new developments in production, investment, and exports, and state-owned corporations will certainly strive to complete the 1999 plan and subsequent years' plans.