Directive No. 733/CT-TTg on the development of plans for economic and social development and state budget estimates for 2008

DIRECTIVE

Regarding the development of the socio-economic development plan

and the state budget estimate for 2008

The year 2008 is the third year implementing the Resolution of the 10th National Party Congress and the Resolution of the National Assembly on the five-year socio-economic development plan from 2006 to 2010. In 2008, it is forecasted that the world economy will continue the growth trend of 2007, with regional economies leading in terms of growth rate. For Vietnam, 2008 is a year when the economy continues to integrate more deeply, opportunities and challenges become increasingly intertwined; economic reform according to a socialist-oriented market mechanism, administrative reform will be further strengthened, and the investment environment will be increasingly improved, creating favorable conditions for investment and production-business activities. Building upon many achievements in socio-economic development and international economic cooperation, the country's strength has been enhanced, opening up many opportunities and favorable conditions for development, laying a foundation for successfully completing the goals of the 2006-2010 five-year plan.

The Prime Minister requests all ministries, sectors, localities, Economic Groups, and the Corporation 91 to fully utilize favorable conditions, maximize potential and advantages, vigorously promote socio-economic development, proactively overcome difficulties and challenges; focus on building the socio-economic development plan and the state budget estimate for 2008 with the following main requirements and contents:

A. MAJOR TASKS OF THE 2008 PLAN

I. TASKS FOR SOCIO-ECONOMIC DEVELOPMENT

1. Tasks for economic development

All industries, levels, and enterprises must concentrate on implementing comprehensive measures to promote rapid and sustainable economic development in 2008 and subsequent years. Strive for GDP growth of 8.5%-8.7% in 2008; of which the added value of agriculture, forestry, and fisheries increases by 3.5%-3.7%; industry and construction increase by 10.5%-10.7%; and services increase by 8.8%-9.0%.

Make significant progress in the quality of growth, competitiveness, and efficiency of the economy. Continue to accelerate the restructuring of the economic structure and labor force towards increasing the proportion of services and industry.

Maximize and effectively utilize all resources. Diversify forms of attracting investment and types of investment to take full advantage of internal strengths to build transportation infrastructure, energy, information, and rural infrastructure. Vigorously develop and manage indirect investment forms to diversify sources of investment, linked with the effective application of management tools to ensure macroeconomic safety and stability.

Prepare well the conditions and start major infrastructure projects. Continue to improve investment management work, organize project management board activities; strengthen inspection work to ensure the quality of projects and effectively prevent corruption and waste in investment construction.

Vigorously develop advantageous and potential industries, encourage the development of industries applying advanced technology and high technology linked with the development of economic zones and industrial parks.

Promote the development of service industries while improving their quality and competitiveness, increasing the share of services in the overall economic structure.

Support the recovery and development of craft villages, encourage households, individuals, cooperatives, and small and medium-sized enterprises to invest in developing diverse small-scale industries to meet local needs and participate in exports.

Ensure stable and sustainable growth rates for the entire agriculture, forestry, and fisheries sector based on continuing to transform the internal structure of the sector. Apply new science, technology, and seeds, intensify cultivation, increase productivity and investment efficiency. Rapidly develop animal husbandry in a sustainable and safe manner. Encourage the formation of concentrated livestock areas in the form of farms and industrial breeding, linked with centralized processing facilities and waste treatment.

In the field of foreign economic relations and international economic integration, it is necessary to correctly recognize and evaluate the advantages, development opportunities, and especially the difficulties and challenges in the context of deeper and fuller integration into the global and regional economy. Implement commitments and integration timelines; create conditions to attract foreign capital and technology, promote rapid export development alongside expanding markets and export effectiveness,...

2. Social tasks

Enhance domestic scientific and technological capacity, while strengthening the absorption, mastery, and application of advanced scientific and technological achievements from around the world in various fields of social life. Gradually build the information technology and biotechnology industries into fast-growing economic sectors, meeting domestic demand and contributing to increasing export turnover. Vigorously promote the socialization of scientific and technological activities towards supporting the development of the scientific and technological market, encouraging and honoring scientists who have made significant contributions to the country.

Further reform education, training, healthcare, culture, and sports, while effectively implementing the policy of socializing these areas. Properly implement the transfer of ownership and partial privatization of some public institutions, initially piloting the partial privatization of public hospitals to establish a model for widespread implementation.

Organize the effective implementation of national target programs; mobilize and use domestic and foreign resources and community participation effectively. Initially, in June and July 2007, relevant ministries managing the programs are responsible for perfecting proposals to submit to the Prime Minister for approval of national target programs for the period from now until 2010 to provide legal basis for planning investment and the budget for 2008.

Actively and effectively address social issues arising from the implementation of WTO commitments. Proactively develop and implement solutions to resolve job losses for workers due to businesses being unable to sustain and develop their production and business operations in the process of competition and international economic integration.

Strengthen poverty reduction efforts; supplement and complete poverty reduction policies and programs so that the poor can participate more actively in program activities and benefit from the outcomes of these programs. Eliminate unreasonable contribution requirements imposed on farmers. Continue to implement assistance policies for the poor to improve their living standards, such as health care policies, educational support, housing support, preferential loans, etc., creating conditions to support ethnic minority groups and other social policy beneficiaries to access state-provided public services.

Effectively address pressing social issues, particularly crime, drug abuse, and traffic accidents.

3. Tasks related to environmental protection

Address environmental degradation in areas surrounding factories, industrial zones, and densely populated areas; rehabilitate and treat polluted rivers, lakes, ponds, canals, and ditches.

Enhance the ability to prevent and mitigate adverse impacts of natural disasters and climate change on the environment; promptly rescue and mitigate the negative consequences caused by natural disasters.

Utilize natural resources and the environment in river basins rationally, efficiently, and sustainably, ensuring ecological balance, preserving nature, and maintaining biodiversity.

Meet international commitments on environmental protection, limit the negative impacts of globalization on the domestic environment to promote economic growth and improve the quality of life for citizens.

4. Vigorously advance administrative reform, thrift, and anti-waste

Administrative reform in the future must aim at building a people-serving administrative system that is clean, democratic, effective, and efficient; the cadre and civil servant corps must possess the necessary qualities and capabilities to meet the demands of national renewal and development.

Vigorously implement the overall administrative reform program, initially focusing on modernizing functions and tasks; reorganizing the government's organizational structure and local authorities at all levels. Implement the head-of-office system in administrative agencies; clearly define the responsibilities of heads and leadership collectives at all levels. Vigorously reform administrative procedures, primarily those related to investment, establishment, and operation of enterprises, and administrative services related to citizens' lives.

Ensure transparency and openness in the operations of state management agencies at all levels; widely disseminate and publicly post regulations, procedures, and clear, specific administrative procedures at offices.

Implement the Government Electronic Program in conjunction with the modernization of administrative management methods, consistent with the progress of information technology application in state management.

Continue to reform the civil service system, including personnel management; salary systems, and other policies and regulations. Reform training and capacity-building for civil servants and officials, with a focus on moral education and political qualities.

Promote grassroots democracy, strengthen external relations between local governments and business communities and residents. Strictly implement Decision No. 80/CP dated April 18, 2005 of the Prime Minister regarding community oversight.

5. Strengthen anti-corruption work

Continuously build and perfect the legal framework for anti-corruption; implement and enforce the Anti-Corruption Code and the Law on Thrift and Anti-Waste; amend, supplement, and perfect the Law on Petitions and Complaints.

Closely integrate the implementation of the Action Program on Anti-Corruption with the Action Program on Thrift and Anti-Waste, especially in land, construction investment, budget revenue and expenditure, financial management, cadre promotion, and placement. Strengthen management and supervision of income for cadres and civil servants, particularly those in positions of power.

6. Strengthen national defense and security consolidation, maintain national independence and social order and safety, especially in key areas, border regions, and islands, creating a stable political environment for economic development and international economic integration.

II. TASKS FOR BUILDING THE STATE BUDGET FOR 2008

Ministries, sectors, localities, Economic Groups, and Corporation 91 shall organize the preparation of the State Budget for 2008 in accordance with the provisions of the State Budget Law and related legal documents. The preparation of the State Budget for 2008 must be linked to the five-year socio-economic development plan for 2006-2010 as decided by the 10th National Party Congress, the Resolution of the National Assembly, and the five-year plans of ministries, sectors, and localities, while taking into account adjustments based on the actual development over the past two years, anticipated domestic and international situations in 2008 and subsequent years.

The State Budget for 2008 must be restructured to create conditions for continued high economic growth while effectively addressing social issues, accelerating poverty reduction efforts, striving to achieve social equity, and ensuring national financial security. Based on this, the preparation of the State Budget for 2008 should pay attention to the following basic contents:

1. The construction of the State budget revenue estimate for the year 2008 must be positive: closely following forecasts of investment and production development situations, adhering to policies and regulations, fully implementing international tax commitments; simultaneously, effective and reasonable measures must be taken to strengthen tax collection management under the Law on Tax Administration; actively and effectively handle outstanding tax debts, prevent tax evasion and smuggling, combat transfer pricing, and the shifting of tax revenues between regions contrary to prescribed regulations; enhance inspections, audits, timely detection, and handling of violations.

The State budget revenue estimate is set at a mobilization level aiming to achieve over 22% of GDP, with tax and fee revenues accounting for more than 21% of GDP. Domestic revenue estimates (excluding oil revenue and land use fees) increase by a minimum average of 16%-18% compared to the estimated actual figures for 2007.

2. The construction of the State budget expenditure estimate for the year 2008 must be based on principles, criteria, and allocation standards for State budget expenditures during the 2007-2010 period according to Decisions No. 210/2006/QĐ-TTg dated September 12, 2006, and No. 151/2006/QĐ-TTg dated June 29, 2006, of the Prime Minister. For local budgets, the expenditure balance estimate is constructed based on the local budget revenue sources allocated according to the tiered system, the ratio of revenue distribution between the central and local budgets, and the supplementary balance amount (if any) decided by the competent authority in 2007. When constructing the budget estimate and allocating funds for 2008, attention should be paid to the following contents:

a) Allocation of investment and development expenditures must ensure concentration, particularly focusing on capital for national key projects, priority economic and social programs, national target programs; continue prioritizing capital allocation for human resource development.

Ministries, sectors, and localities must allocate within the investment and development expenditure estimate for 2008 to repay the State budget for previously advanced amounts, ensuring sufficient counterpart funds for ODA projects, funds for ongoing projects, funds for planning and preparatory work; settle the construction debt of completed works under the State budget's responsibility, and allocate funds for other important projects and works.

Central budget supplementary targeted funding for local budgets needs to focus on supporting truly difficult localities according to the criteria and allocation standards for funding set out in Decision No. 210/2006/QĐ-TTg dated September 12, 2006, of the Prime Minister to better achieve the goals of approved programs, projects, and plans.

b) Construction of the expenditure estimate for education-training, culture-information, health, environment, science-technology, social, defense, security, administrative management, Party activities, and mass organizations' operations must comply with current policies, regulations, and standards, and follow the resolutions of the Party and the National Assembly, with particular attention to allocating State budget funds for the education and vocational training-teaching sector in 2008 to reach 20% of total State budget expenditures.

Ministries, sectors, and localities must link the construction of the 2008 State budget estimate with the implementation of Government Decree No. 130/2005/NĐ-CP dated October 17, 2005, on delegating autonomy and responsibility for personnel establishment and administrative management expenses to state agencies; Government Decree No. 43/2006/NĐ-CP dated April 25, 2006, on autonomy and responsibility for task execution, organizational structure, personnel establishment, and finance for public service units; and Government Decree No. 115/2005/NĐ-CP dated September 5, 2005, on the mechanism of autonomy and responsibility for public scientific and technological organizations; implement pilot conversion of some public service units with conditions to operate under enterprise mechanisms.

c) Expenditure estimates for implementing National Target Programs, Program 135 (Phase II), and the project to plant five million hectares of new forests; relevant ministries and program management agencies must base their evaluations of each program and project on expected results by 2007, analyze limitations, causes, and solutions to determine specific goals and tasks, and construct the 2008 State budget estimate. The Ministry of Planning and Investment and the Ministry of Finance will consolidate these estimates into the 2008 State budget estimate and report to the Government for submission to the National Assembly in accordance with the State Budget Law.

d) Ensure adequate State budget sources to implement salary reform according to the prescribed schedule; simultaneously, continue allocating and mobilizing other financial resources as stipulated to proactively implement it. Ministries, sectors, central agencies, localities, and units must fully and correctly implement all measures to generate funds for salary reform as guided in 2007.

đ) For programs and projects using official development assistance (ODA) funds, the preparation of the budget estimate must follow the procedures and provisions of the State Budget Law according to the nature of the funds, ensuring consistency with the implementation progress.

e) Central and local government budgets at all levels must allocate contingency reserves according to the State Budget Law to proactively respond to natural disasters, floods, epidemics, and urgent and critical tasks outside the budget.

During the process of preparing the 2008 State budget, ministries, sectors, and localities must fully anticipate all requirements for implementing new policies, systems, and tasks (if any); avoid situations where there is insufficient funding when implementing tasks in 2008.

3. For ministries, central agencies, and localities piloting the construction of medium-term financial plans and medium-term target indicators according to Decision No. 432/QĐ-TTg dated April 21, 2003, of the Prime Minister, when constructing the 2008 State budget estimate, they must link the work of constructing medium-term financial plans and medium-term expenditure targets for the 2008-2010 period with the implementation of the goals and tasks of the 2006-2010 five-year plan.

The Ministry of Finance shall provide detailed guidance on the work of preparing the state budget estimate for the year 2008 in conjunction with the work of formulating medium-term financial plans and medium-term target plans for the period from 2008 to 2010.

4. Work on preparing local state budget estimates at all levels: People's Committees at all levels shall prepare local state budget estimates based on sources of revenue and expenditure tasks that have been decentralized, the percentage (%) distribution of revenue items, and the amount of supplementary balance from higher-level budgets allocated to lower-level budgets (if any), which have been stabilized according to the levels decided by the National Assembly, the Standing Committee of the National Assembly, the People's Councils, the Prime Minister, and higher-level People's Committees in 2007. The preparation of the state budget estimate for 2008 must closely adhere to the objectives and tasks of the state budget for 2008 and the provisions of the State Budget Law; among which, attention should be paid to the following issues:

a) Preparing the state budget revenue estimate on the basis of the socio-economic development plan targets for the 2006-2010 period approved by the People's Councils at all levels, the ability to achieve economic and social targets and the state budget for 2007, forecasts of economic growth and revenue sources in 2008 within the region to accurately calculate revenue sources for each sector and each revenue item according to regulations. The domestic revenue estimate (excluding oil revenue and land use fee revenue) should increase by a minimum of 16% - 18%, while the revenue estimate from import-export activities should increase by a minimum of 8% - 9% compared to the estimated actual performance in 2007.

b) Preparing the draft expenditure budget for the local level:

- Based on the local budget revenue sources enjoyed according to the budget decentralization, the ratio of revenue distribution between the central budget and the local budget, and the supplementary balance from the central budget to the local budget (if any) assigned stably to determine the funds available for the local budget. Localities need to prioritize allocating expenditure tasks according to the general orientation, concentrating resources to ensure spending areas such as education and training, science and technology, environmental affairs, in accordance with resolutions of the Party, the National Assembly, and the Government.

- The supplementary budget estimate with specific goals from the central budget for the local budget, such as national target programs, Program 135, the project to plant five million hectares of new forests, and other important programs and projects, shall be determined based on criteria and standards for allocating investment capital development according to Decision No. 210/2006/QĐ-TTg of the Prime Minister and related guiding documents.

c) Land use fee revenue, localities continue to allocate for investing in constructing economic and social infrastructure projects and relocation and resettlement projects, land surveying, and land measurement to accelerate progress and complete the issuance of land use right certificates.

d) Revenue from lottery tickets shall not be included in the state budget balance; management of revenue and expenditure of this source shall be conducted through the state budget. Provincial People's Committees and municipal People's Committees under the Central Government shall forecast the revenue, develop allocation and utilization plans for this revenue to submit to the same-level People's Councils for decisions on investments in necessary social welfare projects in their regions, primarily those in the fields of education and healthcare.

đ) Provincial People's Committees and municipal People's Committees under the Central Government must proactively calculate and set aside funds to implement salary reform in accordance with the prescribed regulations.

e) The preparation of the budget estimate for investment development funding must be carried out in accordance with the provisions of the State Budget Law and Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government; at the same time, proactively allocate local budget funds to repay debts due according to the provisions of the law.

g) Localities must proactively allocate funds and implement subsidized freight rates and prices suitable to the actual situation in their regions regarding goods, products, support levels, supported areas, etc.

h) Based on the local budget balance capacity, the implementation of the budget estimate for items supplemented with specific goals from the central budget to the local budget in 2007, current policies and regulations, build the budget estimate for implementing important projects and tasks, and on this basis, propose the central budget to supplement with specific goals according to the provisions of Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the State Budget Law.

5. Ministries, sectors, central agencies, localities, and units using the state budget must proactively carry out detailed evaluations and analyses of the results of state budget expenditures in 2007; focus on directing and organizing the settlement and approval of the 2006 state budget settlement in accordance with the provisions of the State Budget Law; organize the public disclosure of the 2005 state budget settlement; proactively handle and resolve existing violations detected and recommended by auditing and inspection agencies in accordance with the law.

6. The preparation of the state budget estimate for 2008 must thoroughly implement the Government's Action Program and that of ministries, sectors, and localities on practicing thrift, combating waste, and preventing corruption, ensuring that the state budget estimate is prepared according to regulations, economically, and effectively.

7. Ministries and central agencies must prepare the state budget expenditure estimate according to the executing units and the tasks assigned, clearly and specifically explaining the state budget revenue and expenditure estimate for 2008 and send it to the Ministry of Finance and the Ministry of Planning and Investment for consolidation in accordance with the regulations.

B. PROGRESS IN BUILDING PLANS AND ASSIGNMENT OF IMPLEMENTATION

1. Regarding the progress in building plans:

In June 2007, the Ministry of Planning and Investment and the Ministry of Finance shall guide the framework of the socio-economic development plan and the state budget estimate for 2008 for ministries, sectors, localities, economic groups, and the 91 General Corporations; the Ministry of Finance shall guide the medium-term financial plan and medium-term expenditure plan for the period from 2008 to 2010 for participating ministries and localities to serve as the basis for planning.

In June and July 2007, ministries, sectors, localities, economic groups, and the General Corporation 91 shall develop plans for socio-economic development and state budget estimates for 2008, medium-term financial plans, and medium-term expenditure plans for the period 2008-2010 (for ministries and localities participating in pilot programs). These reports must be submitted to the Ministry of Planning and Investment, the Ministry of Finance, and the State Audit Office before July 20, 2007, in accordance with regulations.

In August 2007, the Ministry of Planning and Investment and the Ministry of Finance shall compile the socio-economic development plan and the state budget estimate for 2008, and at the same time propose allocation schemes for planning indicators and the state budget.

In September 2007, the Ministry of Planning and Investment and the Ministry of Finance shall report to the Government on the socio-economic development plan and the state budget estimate for 2008 prior to submitting them to the National Assembly in accordance with the State Budget Law.

Before November 20, 2007, the Prime Minister shall allocate the socio-economic development plan and the state budget estimate for 2008 to ministries, sectors, localities, economic groups, and the General Corporation 91 based on the resolutions of the National Assembly regarding tasks and the state budget estimate for 2008.

Before November 25, 2007, the Ministry of Planning and Investment and the Ministry of Finance shall provide detailed guidance on the socio-economic development plan and the state budget estimate for 2008 to ministries, sectors, localities, economic groups, and the General Corporation 91.

Before December 10, 2007, provinces and centrally-administered cities shall decide on allocation schemes and assign tasks and budget estimates to lower levels based on the tasks and budget estimates assigned by the Prime Minister and the detailed guidance from the Ministry of Planning and Investment and the Ministry of Finance, ensuring that all levels' budgets are decided upon before December 31, 2007.

Before December 31, 2007, budget units shall decide on allocations and assign revenue and expenditure budget estimates to subordinate units based on the tasks and budget estimates assigned by the competent authority and the provided guidance.

2. On division of responsibilities:

a) The Ministry of Planning and Investment:

- Calculate and determine various options and major balances as a basis for guiding ministries, sectors, and localities in developing the 2008 plan.

- Organize guidance on the development and compilation of the 2008 socio-economic development plan.

- Take the lead and coordinate with the Ministry of Finance to propose investment development plans and capital allocation schemes for construction projects; propose plans and allocation schemes for 2008 for national target programs, Program 135 (Phase II), and the project to plant five million hectares of new forests. Compile allocation schemes for the national target program budget.

Work with ministries, sectors, and localities on their 2008 socio-economic development, investment, and national target program plans.

b) The Ministry of Finance:

- Guide ministries, sectors, and localities in evaluating the implementation of the 2007 state budget; prepare preliminary estimates of the 2008 state budget and notify the revenue and expenditure budget estimates for 2008 to ministries, sectors, and localities.

- Take the lead and coordinate with the Ministry of Planning and Investment and related agencies to build and compile the 2008 state budget estimate; work with central-level agencies, provincial People's Committees, and centrally-administered city People's Committees on the 2008 state budget estimate, medium-term financial plans, and medium-term expenditure plans for the period 2008-2010 (for ministries and localities participating in pilot programs).

c) Ministries, state agencies, economic groups, and the General Corporation 91:

- Coordinate with the Ministry of Planning and Investment and the Ministry of Finance to develop tasks for socio-economic development and state budget estimates within their assigned functions and responsibilities.

- Ministries managing national target programs shall coordinate with the Ministry of Planning and Investment, the Ministry of Finance, and relevant central-level agencies to propose tasks and funding levels for the 2008 program.

- Ministries and state agencies, according to their functions, based on calculations of exploitable resources, shall develop socio-economic targets, propose solutions, new mechanisms, policies, and systems, or suggest amendments and supplements to existing policies to be issued before the budget estimate preparation deadline (before July 20, 2007), and notify the Ministry of Planning and Investment, the Ministry of Finance, and related agencies as a basis for building plans and budget estimates.

d) Provincial People's Committees of centrally-administered cities: guide, organize, and direct functional agencies in localities to develop socio-economic development plans and state budget estimates; continue to innovate in the content and methods of plan development, widely solicit opinions on draft plans to achieve high consensus, submit to competent authorities for decision-making; simultaneously report to central agencies as required.

The Prime Minister requests ministers, heads of ministerial-level agencies, heads of agencies under the Government, and chairmen of provincial and centrally-administered city People's Committees to effectively implement this Directive.