Resolution No. 79/NQ-CP of the Government's regular meeting in October 2014

RESOLUTION

Regular Government Meeting in October 2014

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THE GOVERNMENT

Based on the Law on the Organization of the Government dated December 25, 2001;

Pursuant to Decree No. 08/2012/NĐ-CP dated February 16, 2012 of the Government promulgating the Operational Regulations of the Government;

Based on the discussions of government members and the Prime Minister's conclusions at the October 2014 meeting held on October 29, 2014,

RESOLUTION:

1. On the economic and social situation in October and the first ten months of 2014; the implementation of Resolution No. 01/NQ-CP dated January 2, 2014 of the Government on tasks and key solutions to guide and manage the implementation of the socio-economic development plan and state budget estimate for 2014

The Government unifies its assessment: The economic and social situation in October and the first ten months has shown positive changes. The economy continues to recover across all major sectors. Inflation is under control, with low increases in consumer price indices. Credit structure has shifted positively; exchange rates and foreign exchange markets are stable. Exports maintain high growth rates, continuing to achieve trade surpluses. Industrial production, especially processing and manufacturing industries, grows significantly higher than the same period last year. Agricultural production achieves satisfactory results. International tourist arrivals increase compared to the same period. Official Development Assistance disbursements reach a good level. Foreign Direct Investment attraction continues to improve positively. State budget revenue exceeds the same period in previous years, particularly domestic revenue; expenditures according to the budget and emerging needs are ensured. Public debt remains within permissible limits. Social welfare is guaranteed. Administrative reform efforts are intensified. The business environment improves, increasing business community confidence. Political security and social order are maintained. Diplomatic work achieves positive results.

However, production and business operations still face difficulties; purchasing power increases slowly; the stock market develops unsoundly; the real estate market recovers slowly. Progress in equitization of state-owned enterprises and divestment from non-core investments has improved but still falls short of requirements. Employment, income, and living standards for certain segments of the population, especially poor households and ethnic minorities, remain challenging. Some diseases among people have complex potential developments. Food safety and hygiene assurance work has limitations. Serious fire and explosion incidents occur in major cities. Meanwhile, the global and regional situations are complex, negatively impacting Vietnam's economy and society.

To implement the socio-economic development plan for 2014, the Government requests ministries, agencies, and localities to make efforts to achieve the overall objectives and socio-economic tasks set out at the beginning of the year; to resolutely implement solutions and tasks according to Resolution No. 01/NQ-CP and regular meetings' resolutions; to implement specific management measures to address difficulties, promote production and business activities, restructure the economy, administrative reform, improve the business environment, enhance competitiveness, ensure social welfare and public benefits, guarantee political security and social order, focusing on the following main tasks:

- The State Bank of Vietnam creates favorable conditions for businesses to access credit, promoting growth and ensuring credit quality as planned; strengthens supervision of banking system activities, firmly implementing restructuring of weak financial institutions.

- The Ministry of Finance urges and monitors the effective implementation of tax collection work; enhances inspection work, promptly detecting and handling fraudulent, tax evasion, transfer pricing, and other actions causing tax losses; strengthens anti-smuggling efforts; manages state budget spending strictly, thoroughly saving and improving efficiency.

- The Ministry of Planning and Investment takes the lead in urging to accelerate the progress of investment development project implementation and disbursement; continues to review and build mechanisms and policies to attract investment resources for production and business development; encourages private investment and public-private partnerships (PPP) for infrastructure construction; intensifies efforts to attract foreign direct investment, especially projects in high-tech and environmentally friendly fields; implements measures to ensure the quality, progress, and effectiveness of projects using official development assistance and preferential loans; reviews, inspects, and corrects the use of inefficient official development assistance funds.

- The Ministry of Industry and Trade urges to promote industrial production activities, especially processing and auxiliary industries; improves production capacity, striving to exceed plans in advantageous industries; promotes trade promotion activities, expanding markets, diversifying partners, and promoting exports; actively negotiates free trade agreements; develops the domestic market, ensuring supply-demand balance and product quality, especially essential goods for end-year consumption; strengthens market management, combating smuggling, and preventing the sale of counterfeit and untraceable origin products that do not meet food safety standards.

- The Ministry of Agriculture and Rural Development implements livestock production plans to meet market demands in the final months of the year; strengthens disease prevention and control measures for livestock and poultry; develops aquaculture linked to quality control, meeting export technical standards; proactively coordinates with relevant ministries, agencies, and localities to implement response plans for complex natural disaster scenarios, minimizing damage caused by disasters.

- The Ministry of Transport strengthens supervision of the quality and progress of major transportation construction projects; collaborates with the Ministry of Public Security and localities to strictly enforce traffic order and safety management, load control, and severe punishment for negative phenomena in vehicle load control work.

- The Ministry of Labor, Invalids and Social Affairs shall take the lead and coordinate with relevant ministries, sectors, and localities to effectively implement social welfare policies and social benefits; to carry out poverty reduction programs, job creation, and labor export; to implement policies for persons who have rendered meritorious services to the revolution and their dependents; to enhance the quality and effectiveness of vocational training linked to job creation in response to societal needs.

- The Ministry of Education and Training shall continue to direct the strict implementation of the Government's Action Program to implement Resolution No. 8 of the 11th Plenum on fundamental and comprehensive educational reform.

- The Ministry of Health shall direct the improvement of the quality of medical examination and treatment work, health care for the people; to perform well preventive health work, disease prevention and control; to ensure food safety and hygiene.

- The Government Inspectorate shall effectively implement the Law on Receiving Citizens' Petitions and Decree No. 64/2014/ND-CP of the Government; together with relevant ministries, agencies, and localities, focus on resolving citizens' complaints and denunciations, especially those involving large groups of petitioners; organize citizen reception according to regulations, actively engage in dialogue at the grassroots level, and resolve complaints and petitions thoroughly from the grassroots level; strengthen anti-corruption efforts; conduct inspections and publish inspection conclusions, while supervising the implementation of inspection conclusions and the Prime Minister's directives on post-inspection handling.

- The Ministry of Public Security shall direct the vigorous implementation of crime suppression and crackdown activities; to strengthen fire and explosion prevention inspections, particularly in major cities and residential areas; to cooperate with military forces to promptly detect and combat activities that undermine national security and public order.

- The Ministry of Information and Communications, along with relevant ministries and agencies, shall proactively coordinate with information and communication agencies to timely promote government policies, guidelines, and industry sector management; to actively explain issues of public concern; to promote and mobilize businesses and the public to support and strive to implement the national economic and social development plan.

- Members of the Government shall proactively provide explanations and participate in discussions on the socio-economic situation and respond to questions from National Assembly deputies during the eighth session of the 13th National Assembly; proactively develop plans and action programs to implement resolutions passed by the National Assembly; strictly fulfill commitments made before the National Assembly and address citizens' recommendations; urgently direct the drafting and promulgation of detailed regulatory documents to implement synchronously upon the entry into force of laws and ordinances.

- Relevant ministries and agencies shall cooperate with the Vietnam Chamber of Commerce and Industry based on their functions and responsibilities to actively implement Directive No. 11/CT-TTg dated May 21, 2014, of the Prime Minister on resolving difficulties, obstacles, and recommendations to promote business production and operation; to continue considering and resolving specific recommendations from the business community.

- Ministries, agencies, and People's Committees of provinces and centrally-administered cities shall continue to enhance the effectiveness of leadership and management through concrete measures and actions with the highest determination to complete remaining tasks for 2014; to remove difficulties for business production and operation, to promote economic and social development in their respective regions, and to create strong changes in areas of local advantage; to conduct reviews of leadership and management work in 2014, assess the implementation of the annual work program for 2014; to build tasks, solutions, and the work program for 2015 consistent with the goals and tasks of the five-year plan from 2011 to 2015.

2. On the situation of public debt

The Government has reached a unified assessment: In recent years, due to the impact of the global financial crisis and economic recession, our country's economic growth has slowed down, significantly affecting state budget revenues, but taxes had to be reduced to support businesses while expenditure demands increased sharply to implement economic stimulus policies, salary reforms, and social welfare guarantees, and to strengthen resource mobilization for strategic breakthroughs in developing infrastructure systems. Therefore, public debt has risen rapidly, from 51.7% of GDP in 2010 to 60.3% of GDP by the end of 2014. Meanwhile, as our country has become a middle-income nation, the proportion of ODA loans and preferential foreign loans with long terms and low interest rates in public debt has gradually decreased, leading us to shift towards domestic borrowing in accordance with Party and National Assembly resolutions. The proportion of domestic borrowing has increased mainly through short-term government bond issuance, resulting in a rapid increase in the Government's direct repayment obligations in the short term.

In this context, we have still ensured full debt repayment without overdue debts. Public debt indicators remain within permissible limits as per National Assembly resolutions. Public debt is an important source of capital to supplement investment in developing economic and social infrastructure systems. Over 98% of borrowed funds are directly used for infrastructure projects, with the remainder allocated to the state budget for investment spending (1.5%) and a portion for non-operating expenses in ODA loan projects as committed (0.4%). Many important and essential projects in transportation, electricity, water supply, irrigation, healthcare, education, etc., have been completed, are operational, and are continuing to be invested in new projects, contributing to attracting both domestic and foreign investment sources, promoting structural transformation, enhancing the efficiency of production and business operations, and economic growth, thereby increasing state budget revenues and ensuring debt repayment sources.

In the future, the Government will continue to direct ministries, sectors, and localities to strictly manage public debt, especially new loans (including government loans, loans guaranteed by the government, and loans of local authorities), ensuring within permissible limits; using for investment essential economic and social infrastructure projects according to planning. Strengthening inspection and supervision of loan usage to ensure efficiency and compliance with regulations. Promptly restructuring public debt towards increasing the proportion of long-term loans with low interest rates. Strictly controlling the guarantee for repayment of loans guaranteed by the government and collecting sufficient debt for relending loans. Allocating sources from the state budget within prescribed limits and using the Debt Repayment Reserve Fund to repay debts on time. Reviewing and perfecting the institutional framework, amending and supplementing the Law on State Budget, the Law on Public Debt Management, the Strategy and Medium-Term Program on Public Debt Management. Controlling the reduction of public debt indicators during the period of 2016-2020 and ensuring national financial safety.

The Ministry of Finance shall take the lead, coordinate with the Ministry of Planning and Investment, and the State Bank of Vietnam to develop and submit to the Prime Minister for issuance a Directive on strengthening management and improving the effectiveness of public debt usage in the near future.

3. On handling bad debts

The Government has reached a consensus that the State Bank of Vietnam, relevant sectors, levels, credit organizations, and the business community have made significant efforts in handling bad debts. Actively implementing plans to handle bad debts linked to restructuring each credit organization. Concentrating on supervising, inspecting, and auditing compliance with operational safety regulations, asset quality, financial status, bad debts, and results of bad debt resolution; simultaneously perfecting regulations on debt restructuring, classification, provisioning, and risk utilization in a stricter, more transparent, and internationally aligned manner. By October 2014, 54.3% of previously identified bad debts had been resolved. The bad debt ratio reported by credit organizations was approximately 3.8%, showing a downward trend.

In the future, the Government will direct accelerating the progress of bad debt resolution linked to credit organization restructuring towards completing legal frameworks, particularly regarding collateral asset disposal and creditor rights; enhancing functions, strengthening financial capacity, improving capabilities, and leveraging the role of Credit Asset Management Companies (VAMC); vigorously developing the secondary debt market; encouraging domestic and foreign investors to participate in buying and selling bad debts; publicly disclosing bad debt information and resolution outcomes; intensifying inspections and supervision of bad debts and credit quality; enhancing coordination among ministries, sectors, and localities in resolving bad debts. Alongside these measures, it is necessary to ensure macroeconomic stability, healthy development of securities and real estate markets, and accelerate key restructuring initiatives to promote economic growth, facilitating bad debt resolution and credit organization restructuring. Striving to reduce the bad debt ratio to about 3% by the end of 2015.

4. On the draft Decree on mechanisms and policies for protecting and developing forests, linked to poverty reduction and support for ethnic minorities during the 2015-2020 period

The Ministry of Agriculture and Rural Development shall take the lead, coordinate with the Ministry of Finance, the Ministry of Planning and Investment, the Committee for Ethnic Minorities, the State Bank of Vietnam, and related agencies to incorporate government member opinions; review current policies on forest protection and development, poverty reduction, and ethnic minority policies; integrate, adjust, and supplement policies in line with budget balancing capabilities to effectively achieve forest protection and development goals, increase income linked to poverty reduction for ethnic minority communities, and difficult mountainous areas. Based on this, complete the draft Decree, report to the Government for consideration and decision.

5. On the draft Decree stipulating the autonomy mechanism of public service units

Entrust the Ministry of Finance to take the lead, coordinate with the Government Office to incorporate government member opinions, complete the draft Decree stipulating the autonomy mechanism of public service units, submit to the Prime Minister for signature and issuance.

6. On the Model of Local Administration Proposal

The Ministry of Home Affairs shall incorporate government member opinions, complete the Model of Local Administration Proposal, report to the Party Central Committee of the Government before submitting to the Politburo.

Based on the Politburo's Conclusion, the Ministry of Home Affairs will continue to perfect the Model Proposal, report to the Party Central Committee of the Government before submitting to the 10th Plenary Session of the 11th Central Committee.

Based on the 2013 Constitution, the Conclusion of the 10th Plenary Session of the 11th Central Committee on this Proposal, and discussions at the 8th Session of the 13th National Assembly on the Draft Law on the Organization of Local Administration, the Ministry of Home Affairs will perfect the Draft Law on the Organization of Local Administration, submit to the Government before presenting to the National Assembly at the 9th Session of the 13th National Assembly.

7. On the draft Resolution of the Government on some measures to accelerate the development of tourism in Vietnam in the new period

The Ministry of Culture, Sports and Tourism shall take the lead, coordinate with the Government Office and related ministries and agencies to incorporate government member opinions, complete the draft Resolution on some measures to accelerate the development of tourism in Vietnam in the new period, submit to the Prime Minister for signature and issuance in November 2014.

8. Regarding the exemption and reduction of non-agricultural land use tax in 2014 for communes and towns of Son Tinh District, Quang Ngai Province when merged into Quang Ngai City pursuant to Resolution No. 123/NQ-CP dated December 12, 2013 of the Government.

The Government agrees with the proposal of the Ministry of Finance and permits a reduction of 50% in the non-agricultural land use tax payable for 2014 on residential land within the household and individual quota limits in communes and towns of Son Tinh district, Quang Ngai province, when they are incorporated into Quang Ngai city according to Resolution No. 123/NQ-CP dated December 12, 2013 of the Government. From 2015 onwards, these cases shall pay the non-agricultural land use tax in accordance with Decree No. 53/2011/NĐ-CP dated July 1, 2011 of the Government. The Ministry of Finance is tasked with providing detailed guidance on implementation and handling similar cases that arise.