Decision 412/QD-TTg 2022 Scheme on national credit rating improvement through 2030

DECISION

Approving the Scheme on national-scale credit rating improvement through 2030^[1]

THE PRIME MINISTER

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration;

Pursuant to November 23, 2017 Law No. 20/2017/QH14 on Public Debt Management;

Pursuant to the Government’s Decree No. 87/2017/ND-CP of July 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government’s Decree No. 94/2018/ND-CP of June 30, 2018, providing public debt management operations;

At the proposal of the Minister of Finance,

DECIDES:

Article 1. To approve the Scheme on the national-scale credit rating improvement through 2030 (below referred to as the Scheme) with the following principal contents:

1. Objectives:

a/ General objectives:

By 2030, Vietnam will become a developing country that has a modern industry, upper middle income, and complete, competitive, effective and efficient competition institutions; the country’s economy will vigorously develop on the basis of science and technology associated with improvement of efficiency of external and international integration activities while the investment environment will continue to be improved; to raise Vietnam’s status and prestige on the international arena, thus helping raise the national-scale credit rating to “Investment” level and contributing to reduction of fundraising costs and national credit risks.

b/ Specific targets:

- By 2030, the country’s credit rating will stand at Baa3 (by Moody’s) or BBB- (by S&P and Fitch) or higher.

- Major macroeconomic targets: The gross domestic product (GDP) growth rate will be about 7% on average for the whole period; per-capita GDP at current prices will reach around USD 7,500 by 2030; the total social investment will account for 33-35% of the GDP on average.

- Fiscal targets: State budget deficit will be controlled within the limit approved by the National Assembly in the annual state budget estimates and 5-year national financial plan, striving for the target that the state budget deficit by 2030 will be about 3% of the GDP; public debts and government debts will not exceed 60% and 50% of the GDP, respectively.

- Monetary-banking targets: The capital adequacy ratio of commercial banks in the 2021-2025 period will reach 11-12% and be kept at the minimum rate of 12% by 2030; the equity-to-asset ratio in the banking system will be at least 9%; the foreign exchange reserves will be maintained at a level equal to at least 16 weeks’ import turnover. 

- Major social targets: The human development index (HDI) will be sustained at over 0.7.

- Major environmental targets: The forest coverage rate will be kept stable at 42%; the rate of treatment and reuse of wastewater discharged into the environment in river basins will surpass 70%; the amount of greenhouse gas emissions will be reduced by 9%.

2. Major solutions

a/ Synchronously implementing the tasks and solutions set out in the Strategy for socio-economic development for the 2021-2030 period and 5-year socio-economic development plans

- To synchronously implement tasks and solutions for macroeconomic stabilization, socio-economic development, administration of financial-state budget, monetary, public debt, and public investment policies under 5-year plans in conformity with the Strategy for socio-economic development for the 2021-2030 period.

- To continue to improve, and raise the quality of, socialist-oriented market economy institutions.

- To step up the restructuring of the economy associated with changing the growth model; to further bring into play the growth potential and improve economic indicators, including per-capita GDP in the medium term and long term.

- To maintain competitiveness in the industrial production, diversify, and build competitiveness of, the technology supply and industrial production chains of high added value.

- To thoroughly bring into full play advantages of trade agreements and consolidate Vietnam’s status in global supply chains, thus helping selectively attract FDI sources.

- To improve the productivity and quality of human resources through education and training and optimizing the capacity of young workers to meet requirements of the Fourth Industrial Revolution and international integration.

b/ Raising the quality of institutions and governance, and increasing data publicity and transparency in conformity with international practices

- To proactively participate in, and keep a close watch for improvement the Worldwide Governance Indicators (WGI) and other global rankings concerning governance, business environment and human development, etc., in the long run, showing the Government’s strong commitment in improving the institutional capacity as reflected in the national-scale credit ratings.

- To raise standards for data disclosure to make them more conformable with international practices and reality of emerging markets; to improve the quality and timeliness of data and enhance coordination and data sharing among agencies in charge of macroeconomic administration.

- To intensify the application of information technology, step up the digital transformation, and build an e-government toward a digital government; to complete the building of, and put into operation and use, important databases and national connection and sharing platforms.

c/ Building a strong public financial system and expanding sustainable revenue sources to improve debt indicators and promote fiscal consolidation

- To continue consolidating healthy fiscal platforms, focusing on improvement of state budget revenue indicators through completing collection policies associated with restructuring state budget revenues toward covering all revenue sources and expanding revenue sources, particularly new revenue sources, in conformity with reality, integration commitments and good international practices.

- To improve fiscal indicators, and gradually reduce the state budget deficit and the ratio of public debts and government debts to the GDP.

- To further increase transparency of fiscal policies; to step up financial and budgetary management and administration in the medium term, ensuring synchrony and consistency between medium-term public investment plans and 5-year national plans on finance and borrowing and repayment of public debts; to implement 3-year financial-state budget plans and 3-year public debt management programs in accordance with law and international practices; to intensify the application of good international practices to the management of government debt portfolio risks and assurance of sustainable loan borrowing.

d/ Improving the structure and quality of banks and state enterprises in order to reduce provisional debt obligation risks toward the state budget

- To intensify the settlement of non-performing loans and limit new non-performing loans; to continue restructuring the banking sector and minimize risks of non-performing loans through measures to increase the capitalization of commercial banks, improve the quality of assets and loans of banks, improve the asset-to-debt ratio, and accelerate the disposal of other doubtful assets/non-performing loans.

- To continue improving the legal framework on credit extension, and effectively expand credit activities, focusing on production and business sectors and priority sectors under the Government’s guidelines; to closely control high-risk sectors.

- To keep a close watch to ensure full and scheduled payment for all government loans.

- To continue reorganizing state enterprises and raise the efficiency of state enterprises after they are equitized.

- To improve data transparency and publicity of banks and enterprises for improving their capacity to make financial efficiency forecasts.

dd/ Raising the efficiency and awareness about the importance of the work of national-scale credit rating and intensifying cooperation with credit rating agencies and international organizations

- To further step up public communication about the Government’s guidelines and policies on macroeconomic management and administration, particularly measures concerning inflation control, macroeconomic stabilization and social security assurance.

- To build capacity of officers and assign officers with appropriate professional qualifications and experience to perform the work of national-scale credit rating on a full-time basis.

- To learn international experience and consult domestic and international consultants; to unceasingly raise awareness about the importance of the work of national-scale credit rating, thereby improving the quality of provided information and methods of working with credit rating agencies so as to provide positive information on macroeconomic development and fiscal, monetary and public debt management.

- To formulate regulations on provision of specific and updated information and news on political situation; socio-economic development guidelines, policies and strategies of Vietnam; fiscal, monetary, price, trade, investment and public debt policies; and administrative reform outcomes as well as information at the request of the Ministry of Finance to serve the work of national-scale credit rating. Ministries and sectors shall work out roadmaps for disclosing and sharing more detailed information in the digital environment.

- To take the initiative in regularly providing information through diversified channels in order to introduce positive outcomes in macroeconomic administration and socio-economic development.

- To make schedules and periodically organize meetings in Vietnam and abroad to introduce the image of Vietnam to credit rating agencies, investors’ community and international organizations; to meet and exchange opinions with representatives of high-ranking leaders of the Committee on Credit Rating Agencies at international conferences in order to provide and update information on the socio-economic development of Vietnam.

- To improve the proactivity and activeness of, and ensure synchronous coordination among, ministries, sectors and organizations assigned to take charge of or participate in the work of national-scale credit rating.

- To increase the accountability of core agencies, units and groups for coordination in the work of national-scale credit rating; to tighten discipline and order; to promptly give commendations and strictly discipline violators.

Article 2. Organization of implementation

1. Periods of implementation of the Scheme: The Scheme shall be implemented in association with the implementation of the Strategy for socio-economic development for the 2021-2030 period and 5-year and annual socio-economic development plans.

2. Assignment of tasks for implementation:

a/ The Ministry of Finance shall:

- Assume the prime responsibility for, and coordinate with related agencies in, organizing the implementation of the Scheme; organize reviews and evaluations to draw experience after the first five years’ implementation of the Scheme by 2026; and assume the prime responsibility for, and coordinate with related agencies in, proposing the Prime Minister to decide on adjustment of objectives and contents of the Scheme when necessary.

- Assume the prime responsibility for, and coordinate with related agencies in, organizing the work of national-scale credit rating, receiving and processing questions and requests for provision of relevant information from credit rating agencies, organizing public communication activities for investors, and summing up evaluation results for reporting to the Prime Minister.

- Assume the prime responsibility for consolidating the Working Group for performance of tasks relating to national-scale credit rating activities with a view to improving national-scale credit ratings.

b/ The Ministry of Planning and Investment, State Bank of Vietnam, Ministry of Industry and Trade, and National Financial Supervisory Commission shall:

- Provide relevant data and information within the ambit of their functions and tasks on a regular basis or upon request to serve the work of national-scale credit rating.

- Assign core officers to join the Working Group for monitoring the work of national-scale credit rating; direct their agencies to work at the request of credit rating agencies with a view to increasing the sharing of information on direction and administration work of relevant sectors and fields.

- Coordinate with the Ministry of Finance in processing and explaining information for credit rating agencies with regard to questions raised after working meetings with credit rating agencies or upon receiving requests from credit rating agencies with regard to subjects under their management in accordance with regulations, meeting quality and time requirements.

- Coordinate with the Ministry of Finance in organizing the performance of the tasks assigned in the Scheme.

c/ Ministries, ministerial-level agencies, government-attached agencies, provincial-level People’s Committees, and related agencies shall direct and participate in the implementation of relevant contents of the Scheme; coordinate with the Ministry of Finance in performing tasks related to national-scale credit rating; and provide and explain information about issues falling within the ambit of their assigned functions and tasks.

3. Resources for the implementation of the Scheme: Funds for implementation of the tasks and solutions set out in the Scheme shall be included in related agencies’ annual plans on state budget expenditures; technical assistance from international partners and other lawful funding sources shall be mobilized.

Article 3. Effect

This Decision takes effect on the date of its signing.

Article 4. Implementation responsibility

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees shall implement this Decision.-

For the Prime Minister
Deputy Prime Minister
LE MINH KHAI