Directive No. 28/2005/CT-TTg on measures to stabilize prices in the last months of 2005

DIRECTIVE MARKET

On measures to stabilize prices

in the last months of 2005

In 2004, prices of many types of goods on the world market and in Vietnam increased significantly, adversely affecting production and people's livelihoods. To mitigate the negative impacts of this situation, ensure economic growth, and stabilize people's lives, on August 5, 2004, the Prime Minister issued Directive No. 30/2004/CT-TTg on measures to control price increases in the short term. Implementing the Prime Minister's directive, ministries, sectors, and localities have actively and promptly implemented necessary measures, achieving substantial results (the consumer price index in 2004 was controlled below two digits, meeting the National Assembly's target, ensuring domestic market stability, promoting economic growth, stabilizing society, and people's lives).

In 2005, prices of many types of raw materials and goods on the global market that Vietnam must import in large quantities to serve domestic production, such as oil, steel billets, chemicals, new drugs, liquefied natural gas, etc., remain at high levels; many goods continue to increase in price, especially oil, directly impacting Vietnam's economy. Harsh weather conditions with many unpredictable factors forecasted, and disease outbreaks and natural disasters may occur with unforeseeable developments.

To control the rate of price increases, manage inflation, stabilize macroeconomic conditions, and promote economic growth, implementing the target for the consumer price index set forth in the National Assembly's Resolution, the Prime Minister directs:

1. Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial and municipal People's Committees under the central government must continue to implement necessary measures to effectively achieve the contents directed by the Prime Minister in Directive No. 30/2004/CT-TTg dated August 5, 2004; while simultaneously directing subordinate agencies and units to immediately address the following issues:

- 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 relevant agencies and localities to review and assess the actual situation regarding investment and production at all stages, levels, and industries to develop specific and appropriate measures, focusing on resolving difficulties for production and business operations, ensuring macroeconomic balance in the national economy. Continue to implement the Prime Minister's Directive No. 29/2003/CT-TTg dated December 23, 2003 on rectifying and managing state-funded investment and construction projects to ensure effective use of investment capital.

- Take the lead and coordinate with industry-managing ministries to review and evaluate the implementation of planning and development strategies for each industry comprehensively, including the implementation of planning and development through local investment projects, particularly for key products to ensure production planning aligns with material supply sources and product consumption systems.

b) The Ministry of Finance:

- Manage all budget revenue and expenditure activities strictly, efficiently, and economically in accordance with the State Budget Law; adopt appropriate measures to create motivation to achieve and exceed the state budget revenue targets; strengthen budget revenue management measures to prevent revenue loss; enhance budget expenditure management to ensure expenditures are for their intended purposes and comply with established regulations, linked to improving the budget spending standards system. Continue to implement the Prime Minister's Directive on practicing thrift and preventing waste, especially in consumption (particularly saving on fuel, electricity), production and business costs, and basic construction.

- Vigorously implement measures to improve corporate financial health, especially state-owned enterprises and those slated for shareholding reform; adopt specific financial measures and mechanisms to encourage enterprises to innovate technology, increase labor productivity, reduce production and circulation costs, and lower product prices; end financial support for state-owned enterprises engaged in unprofitable production and business activities.

- Strengthen guidance and better organize stock market activities.

- Continue to adjust financial policies flexibly and promptly when there are abnormal fluctuations in raw material and commodity prices on the market to stabilize prices but in line with international and regional economic integration commitments. Consistently implement the tax reduction schedule according to international and regional commitments, minimize protective tariffs on goods and services that do not require protection to create competitive pressure on domestic enterprises.

- Strengthen and more resolutely implement monitoring of price-forming factors for important raw materials and commodities; closely track market price trends and forecast price fluctuations, especially primary materials for domestic production that Vietnam must import, to employ financial tools and other appropriate measures to ensure supply-demand balance for goods and materials; at the same time, take measures to prevent arbitrary price hikes that harm consumer interests in accordance with the law on price management.

- Take the lead and coordinate with the Ministry of Trade and industry-managing ministries to inspect and adopt specific measures to reduce production costs for certain products that are inputs for production such as electricity, coal, fertilizers, iron and steel, cement so that the cost and selling prices of these products are reasonable, not affecting production and living conditions; at the same time, review and eliminate immediately fees, charges, and freight rates that do not comply with regulations or are unreasonable to reduce input costs for production and business enterprises.

- To organize inspections and checks to ensure compliance with state regulations on prices; direct relevant agencies and coordinate with local authorities to effectively monitor price listings, ensuring civilized trade practices, market transparency, and opportunities for consumers to participate in market price supervision.

c) The State Bank of Vietnam:

- Continue implementing active monetary policy measures, proactively adjusting exchange rates and interest rates to encourage exports, control imports, limit trade deficits, and flexibly combine with other market mechanisms to prevent sudden fluctuations, thereby stabilizing the currency and macroeconomy.

- Direct commercial banks to strengthen measures to strictly control credit activities, lending to effective projects to improve credit quality and align with available capital, reduce bad debts in banking operations, ensure safe, efficient, and sustainable credit activities to contribute to economic growth.

d) The Ministry of Trade:

- Develop specific, proactive measures to expand domestic and international markets, boost exports. Lead and coordinate with relevant ministries and sectors to monitor and forecast market conditions to adjust supply and demand for goods, prevent localized imbalances, control and prevent monopolistic business practices, and stabilize essential commodity prices.

- Coordinate with sector-managing ministries to enhance inspections and controls over import-export activities, reserves, and leverage the core role of state-owned enterprises, especially conglomerates, to regulate supply and demand and stabilize prices of essential goods for production and daily life.

- Coordinate with sector-managing ministries to reorganize business networks to eliminate round-trip trading and overlapping sales, reducing costs and lowering product prices; strengthen coordination with functional agencies and local authorities to rigorously control and penalize counterfeit goods, smuggling, fraudulent trade practices, and speculative price hikes, particularly in gasoline, steel, fertilizers, and cement.

- Lead and coordinate with relevant ministries and sectors to promptly issue guiding documents for the Competition Law to legally supervise monopolies and monopoly price agreements, ensuring lawful price competition.

- Lead and coordinate with the Ministry of Agriculture and Rural Development and the Vietnam Food Association to closely follow rice production, supply-demand balance, and prices both domestically and internationally to reasonably manage rice export progress based on food security and farmers' interests, enhancing business efficiency.

đ) The Ministry of Agriculture and Rural Development:

- Lead and coordinate with ministries and localities to take positive measures to mitigate the aftermath of natural disasters and diseases; control and eradicate disease sources to prevent avian influenza outbreaks; implement recovery and development plans for poultry farming in 2005; plan and organize livestock production and processing towards industrialization and modernization, ensuring environmental hygiene and food safety, promoting continued agricultural and rural development.

- Coordinate with the Ministry of Trade and provincial people's committees to determine reasonable rice export volumes for 2005, ensuring food security and stable domestic rice prices, preventing shortages, especially in disaster-stricken areas and remote regions.

- Coordinate with the Ministry of Trade, the Ministry of Industry, and the Vietnam Fertilizer Association to complete fertilizer supply systems, particularly urea; inspect and oversee dealer and retail business practices, strictly handling fake or substandard fertilizer sales that harm farmers and speculative stockpiling.

- Coordinate with the Ministry of Trade and the Vietnam Sugarcane and Sugar Association to review sugar supply-demand balances for the 2004-2005 crop year, directing sugar-producing enterprises to develop appropriate sales plans to avoid price surges.

e) The Ministry of Industry and Construction directly guide enterprises in their industries to review each product, implement specific measures to overcome difficulties for production development, eliminate unnecessary costs, maximize domestic raw material utilization to reduce production costs and product prices, stabilize selling prices, especially for important sectors such as mining, steel, electricity, coal, cement, fertilizers, textiles, etc.; consolidate and improve steel and cement distribution networks.

g) The Ministry of Transport directs transport enterprises within its industry to implement specific measures to reduce intermediary costs, lower transportation costs to ensure stable freight and service prices, contributing to market price stability.

h) The Ministry of Health leads and coordinates with relevant ministries, agencies, and provincial people's committees to focus on organizing and strictly implementing the Prime Minister's directives on drug prices as announced in Notification No. 34/TB-VPCP dated March 1, 2005, by the Government Office.

i) The Ministry of Posts and Telecommunications adjusts postal and telecommunications fees to ensure Vietnamese postal, telecommunications, and internet rates are at or below regional averages; direct the Post and Telecommunications Corporation to closely cooperate with permitted businesses in these sectors to ensure high system performance and eliminate monopolistic practices.

k) The Ministry of Culture and Information leads and coordinates with the Central Propaganda and Ideology Committee to direct mass media organizations to work with relevant ministries and agencies to effectively promote understanding of state price management, the relationship between domestic and global prices, thereby preventing psychological factors from driving up prices.

l) The Chairman of the Board of Directors, General Director, directors of state-owned enterprises and other economic sectors, along with the Chairmen of industry associations, are responsible for taking all measures to improve technology, reduce raw material costs, decrease production costs, lower product costs, address increases in input prices, and control increases in output prices.

m) The Chairmen of People's Committees of provinces and centrally governed cities are responsible for implementing specific measures to stabilize prices within their jurisdictions in accordance with the Price Ordinance and Decree No. 170/2003/NĐ-CP dated December 25, 2003, detailing the implementation of certain provisions of the Price Ordinance. They shall direct relevant local agencies to review fees within their scope and authority, administrative procedures to make timely adjustments, resolve difficulties for businesses in production and business operations, inspect and control price-forming factors of materials and goods under local management, and handle violations of pricing regulations.

2. The Ministry of Finance shall take the lead, coordinate with the Ministry of Planning and Investment and related agencies to monitor the implementation of the contents of this Directive and regularly compile and report at the monthly meetings of the Government.

3. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of People's Committees of provinces and centrally governed cities, heads of organizations using state budget funds, Chairmen of the Board of Directors, General Directors, and directors of enterprises are responsible for guiding and organizing the implementation of this Directive./.