Directive No. 30/2004/CT-TTg on measures to curb the rate of market price increases in the short term

 DIRECTIVE

On measures to control the rate of market price increase

 in the immediate period

From late 2003 to now, the import prices for many types of goods, materials, and raw materials have sharply increased and remain at high levels; the widespread outbreak of avian influenza has caused significant losses to livestock farming, adversely affecting production and people's lives. The Government has implemented numerous measures to limit the negative impacts of the above situation, ensuring economic growth and stabilizing people's lives. However, compared to December of the previous year, the consumer price index and service prices for the first seven months of this year still remain at high levels over many years. 

It is forecasted that in the future, the prices of major commodities on the world market that we must import, such as oil-based products (petrol, plastics, fertilizers...), iron and steel..., will continue to fluctuate. The crude oil price on the world market is currently high and is influenced by complex political factors on the international stage and global oil demand. Generally, the trend of price fluctuations on the world market has many unpredictable factors. Therefore, the task of implementing the price target as set forth in the National Assembly Resolution is extremely difficult.

Despite this, to stabilize macroeconomic conditions, contribute to economic growth, and stabilize people's lives, it is necessary to make resolute efforts to control the rate of price increases in the near future. To implement this task, the Prime Minister issues the following directive:

1. The implementation of measures to control the rate of market price increase must adhere to the following principles:

a) Measures to control the rate of price increase must be practical and appropriate, aiming to maintain macroeconomic balances, promote economic growth, attract investment, and alleviate difficulties in people's lives.

b) Measures to control the rate of price increase must be flexible, suitable for the market mechanism, and consistent with the deepening integration into the international economy, avoiding rigidity, arbitrary actions, and returning to the centralized pricing management system. At the same time, it is necessary to recognize that controlling the rate of price increase in the near future is a key task in the implementation of work by ministries, sectors, localities, and enterprises.

c) Measures to control the rate of price increase must be linked to thoroughly implementing savings in investment construction, production, business, and consumption; particularly in state spending: investment from state budget funds, state credit funds, state enterprise funds, and regular budget expenditures.

d) For certain important goods and services that significantly impact production and social life and those under state pricing, if world prices fluctuate sharply, price adjustments must be made according to the principle of harmonizing various interests. In cases of necessity, the State shall apply appropriate financial policies; simultaneously, enterprises must take measures to improve technology, reduce production and circulation costs, lower product costs, enhance competitiveness, and improve business efficiency.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees must deeply understand the aforementioned principles and, based on their functions and responsibilities, implement measures to control the rate of price increase within their management scope; at the same time, they must focus on directing the implementation of the following tasks:

- 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;

- Coordinate with relevant ministries and sectors managing production to closely monitor business operations and ensure major macroeconomic balances in the national economy.

- Review large projects to ensure effective investment. By August 2004, submit to the Prime Minister a list of state-funded projects requiring delayed commencement, extended implementation schedules, and cessation of ineffective and unnecessary investments. Concentrate investment capital on projects that can be put into use early and achieve high effectiveness. Implement measures to effectively utilize and manage investment funds raised through government bonds and other forms of public fundraising.

b) The Ministry of Finance:

- Strictly manage state budget expenditures according to prescribed regulations, firmly cutting unreasonable regular expenses. Reduce annual regular budget expenditures by 10%. Implement specific measures to further promote and enhance savings and anti-waste efforts in the management and consumption of fuel, energy, especially in state-funded agencies and units, in accordance with the Prime Minister's Directive.

- Coordinate with the Ministry of Trade and the Ministry of Planning and Investment to closely monitor market price trends and organize timely forecasts; particularly focusing on major imported raw materials to predict situations and propose the use of financial tools such as taxes, fees, state reserves, budgets, and other appropriate measures to balance supply and demand for essential goods and materials.

- Coordinate with related ministries and agencies to supervise the formation of prices for important and essential goods and materials under state price control; strictly investigate and handle individuals and businesses exploiting the current situation to illegally increase prices on goods and services they produce and sell. Utilize tax, fee, and administrative tools to regulate illegal income, correct practices that allow businesses to arbitrarily increase prices, thereby harming consumer interests, in accordance with the law on state price management.

- Continue to flexibly and cautiously apply financial policies to stabilize prices of important and essential goods while ensuring international commitments.

c) The State Bank of Vietnam:

- Continue to implement prudent, flexible, and proactive monetary policy measures; strictly control money supply to achieve price stability, interest rate stability, and contribute to inflation control and economic growth; prudently manage exchange rates, flexibly adjust them according to foreign currency supply and demand in the market and the state's foreign exchange policy, without causing sudden changes.

- Direct commercial banks and strengthen measures to strictly control credit activities, ensuring that credit expansion is safe, effective, and sustainable.

d) The Ministry of Industry and the Ministry of Construction shall direct the State-owned enterprises: Coal, Electricity, and Vietnam Cement Corporation to strictly implement the Prime Minister's directives on price management for electricity, coal, and cement products. Enterprises must strive to intensively reduce production and circulation costs, especially fuel costs, improve labor productivity, innovate technology to lower product costs, mitigate increases in input prices, control increases in output prices, and contribute to stabilizing market prices.

đ) The Ministry of Transport and the Chairpersons of People's Committees of provinces and centrally governed cities within their authority shall direct state-owned transport enterprises to maintain stable rates for automobile, railway, river, and domestic air transportation services.

e) The Ministry of Posts and Telecommunications shall adjust downward channel rental fees and interconnection charges from now until the end of 2004 to ensure that Vietnam's telecommunications and Internet rates remain lower or equivalent to regional averages.

g) The Ministry of Agriculture and Rural Development:

- Shall take the lead and coordinate with relevant ministries and localities to implement decisive measures to quickly restore poultry flocks in 2004 and prevent the recurrence of avian influenza outbreaks; reorganize livestock feed production, including sales networks, to reduce production and processing costs, thereby contributing to lowering livestock feed prices and promoting livestock farming development.

- Coordinate with People's Committees of the Mekong Delta provinces to inspect and accurately grasp the quantity of rice for sale from the 2003-2004 crop season and the inventory levels of foodstuffs in enterprises to manage exports. Maintain reasonable export volumes for 2004 to ensure food security and stabilize domestic rice prices.

h) The Ministry of Trade:

- Shall take the lead and coordinate with relevant ministries and agencies to closely monitor and forecast market trends, balance supply and demand for goods, and prevent localized imbalances that could cause price increases, particularly for sensitive items such as rice, gasoline, steel, fertilizers, cement, sugar, paper, etc.; if supply and demand become unbalanced, promptly report to the Prime Minister to implement appropriate measures.

- Promote research to develop a rational rice export strategy to protect farmers' interests. Coordinate with the Vietnam Foodstuff Association to review signed contracts, closely follow domestic food prices to manage purchases and avoid concentrating rice and grain purchases at one time, which could drive up domestic prices. Inspect and regulate small-scale rice exports across borders; initially allow no more than 3.5 million tons of rice exports for 2004, with adjustments only permitted in the fourth quarter of this year.

i) The Ministry of Industry shall take the lead and coordinate with the Ministry of Trade to direct Vietnam Steel Corporation and the Vietnam Steel Association to complete the steel supply system by August 2004, enhance market management capabilities, combat speculation, monopoly, or collusive monopolies regarding steel prices; promptly issue regulations to manage the domestic steel market (applicable to both state-owned enterprises and other economic sectors) as directed by the Prime Minister. Direct Vietnam Steel Corporation to establish a dealer network and distribution system to ensure stable steel prices, prevent the misuse of tax adjustments to raise steel prices, and illegal collusion between producers and distributors to arbitrarily increase steel prices; inspect and take measures against enterprises that violate regulations in the steel distribution process.

k) The Ministry of Health shall take decisive measures to stabilize drug prices, particularly essential medicines for disease prevention and treatment, ensuring these drugs do not experience sudden price hikes; take the lead and coordinate with relevant ministries and agencies to complete the project "Strengthening Government Management of Pharmaceuticals" by August 2004, submit it for government approval and implementation after approval, contributing to improving the pharmaceutical supply system, enhancing market management capabilities, combating speculation, monopoly, or collusive monopolies regarding drug prices, inspecting and taking measures against enterprises that violate regulations in the drug distribution process.

l) The Ministry of Culture and Information shall coordinate with the Central Propaganda and Ideology Commission to direct mass media organizations to work closely with relevant ministries and agencies to effectively promote public understanding of state price regulation, domestic and international price relationships in integration, thereby preventing psychological factors from driving prices up.

m) The General Statistics Office shall redefine the structure of goods and services in the basket of consumer goods and services used to calculate the Consumer Price Index and Service Price Index, and implement and publish the inflation rate according to GDP in line with international practices.

n) People's Committees of provinces and centrally governed cities:

- Shall be responsible for stabilizing bus passenger transport fares within cities, towns, and industrial zones.

- Direct relevant departments to implement measures to control the factors forming abnormal price fluctuations for materials and goods, and monitor prices of enterprises exploiting current price conditions, especially using increased fuel prices to illegally raise prices of their own produced and traded goods and services. Regularly organize inspections and handle violations of state price discipline, preventing enterprises from arbitrarily increasing prices and harming consumer interests.

- For goods and services listed under the price stabilization program as stipulated in Decree No. 170/2003/NĐ-CP dated December 25, 2003 of the Government, ministries, sectors, localities, and enterprises must closely monitor market price trends and implement price stabilization work in accordance with government regulations.

4. Ministries, sectors, localities, enterprises, political-social organizations, armed forces, and consumers must strictly implement the thrift policy of the Party and the State; take specific and practical measures to save, combat waste, and enhance efficiency in production and consumption.

5. The Ministry of Planning and Investment shall be the main organizer and coordinate with the Ministry of Finance to monitor the implementation of this Directive and regularly report monthly to the Government on the results of its implementation. From now on, in the monthly reports on socio-economic conditions submitted by the Ministry of Planning and Investment to the Government, there must be a section discussing the results of implementing this Directive.

6. Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairpersons of People's Committees of provinces and centrally governed cities, heads of state budget-using organizations, Chairpersons of Boards of Directors, General Directors, and Directors of state-owned enterprises are responsible for organizing the implementation of this Directive./.