Decision No. 73/2006/QD-TTg dated April 04, 2006 of the Prime Minister approving the general planning on development of Vietnam's industries by territorial region till 2010, with a vision to 2020

DECISION

APPROVING THE GENERAL PLANNING ON DEVELOPMENT OF VIETNAM'S INDUSTRIES BY TERRITORIAL REGION TILL 2010, WITH A VISION TO 2020

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

At the proposal of the Industry Ministry in Report No. 2723/TTr-KH of May 27, 2005, and Official Dispatch No. 4373/CV-KH of August 16, 2005; and considering the opinions of concerned ministries and branches,

DECIDES:

Article 1.- To approve the general planning on development of Vietnam's industries by territorial region till 2010, with a vision to 2020, with the following principal contents:

I. DEVELOPMENT VIEWPOINTS, OBJECTIVES AND ORIENTATIONS

1. Viewpoints

a/ Viewpoint for development of the entire industrial sector

- Industry must be developed on the basis of bringing into play the aggregate resources of all economic sectors, of which state-run industries shall play the steering role.

- Industry must be developed in the direction of forming a dynamic balance and ensuring the priority for development of different branches and regions to match resources and advantages in each period and suit the process of international economic integration.

- Industry must be developed in a way that secures Vietnam's active and effective participation in industrial alignment and production cooperation among enterprises, among different industries, and with transnational conglomerates around the world.

- Industrial development must be closely associated with service development as well as rural industry development, with a view to creating a direct driving force for agricultural and rural industrialization and modernization and accelerating the urbanization process.

- Industrial development must satisfy the requirements of sustainable development, social progress and justice and environmental protection.

- Industrial development must be attached to the requirements of defense and national security
consolidation.

b/ Viewpoint for industrial development by territorial region

To bring into full play advantages of each region to develop an open economic structure which shall be associated with demands of domestic and overseas markets.

To promote the leading role of key economic regions in rapid development toward industries with high technologies, techniques and added value which can boost the development of other regions.

To attach labor-intensive industries and farm, forest and marine product-processing industries with raw material areas as well as rural and mountainous areas.

2. Orientations for industrial development

a/ Orientations for industrial development till 2010

To concentrate on developing industries, which are capable of bringing into play the competitive edge, taking up the domestic market and boosting export, such as hydroelectricity, processing of farm, forest and aquatic products, garment, leather-footwear, electronics-informatics, a number of mechanical products, pharmaceuticals and consumer goods, etc.

To build in a selective manner a number of establishments in such heavy industries as oil and gas, metallurgy, manufacturing mechanical engineering, production of base chemicals, fertilizers and building materials, with rational steps suitable to capital, technology and market conditions, thus bringing about efficiency.

To prioritize the development of hi-tech industries, especially information technology, telecommuni­cations, electronics and automation. To attach importance to development of computer software industry.

To efficiently develop industrial parks, export processing zones and construct a number of hi-tech parks and open economic zones.

To encourage the development of medium- and small-sized industrial clusters in rural areas so as to facilitate the development of industrial production establishments engaged in various business lines and trades and attract large numbers of laborers, thus contributing to the acceleration of agricultural and rural industrialization and modernization.

b/ The 2020 vision of Vietnam's industry

To strive for the target that by 2020 the GDP of industry and construction sectors shall increase at least five times over 2000. The industry and construction ratio to the total GDP of the whole country shall reach over 45% by 2020. The structure of industries shall shift in the direction of quickly raising the ratio of processing industries to 87-88% by 2020. The proportion of trained laborers to the entire labor force shall reach 60%. The ratio of manufactured products for export shall reach 70-75%. The ratio of the group of industries where high technologies are used shall rise to around 40-50%. The ratio of the export value of industrial products shall reach 85-90% of the whole country's export value.

3. Objectives

The value of industrial production shall grow at an annual average rate of 15-16% in the 2006-2010 period.

The ratio of industry and construction sectors in the total GDP shall be 43-44% (particularly, industry shall be 37-38%) by 2010.

To maintain the annual growth rate of added value of the industrial sector at above 10.2% in the 2006-2010 period and above 10.3% after 2010.

The rate of technological renewal in the industrial sector shall be at an annual average of 12-15%.

To build up a sufficient contingent of scientific and technological laborers in the industrial sector with adequate qualifications to research, apply, receive, operate and exploit in an efficient manner technologies and equipment of the sector.

The export value of industrial products shall grow at an annual average rate of 16-18%.

For specific growth targets, see Appendix I.

II. ORIENTATIONS FOR AND OBJECTIVES OF INDUSTRIAL DEVELOPMENT BY TERRITORIAL REGION TILL 2010 (SEE APPENDIX IX FOR DIVISION OF SPECIFIC REGIONS)

1. Region 1

a/ Orientations:

To concentrate on development of hydroelectricity, processing of farm and forest products (paper, tea, timber, foodstuff, drinks, etc.), exploitation and processing of minerals (iron ores, apatite, coal, copper, lead, zinc, tin, tungsten), production of chemicals and fertilizers, metallurgy, and production of building materials. To attach importance to development of mechanical engineering industry in service of agriculture and processing industry.

b/ Objectives:

To raise the industrial ratio to the total GDP of the region to 23-24% by 2010; the ratio of basic industries to 37-38% of the region's total industrial production value. To maintain the ratio of farm, forest and aquatic product processing industries at 25-26%.

For specific growth targets, see Appendix II.

2. Region 2

a/ Orientations:

To concentrate on the development of mechanical engineering (manufacturing engineering, shipbuilding, electric appliances, means of transport, etc.), thermoelectricity, electronics and information technology, production of chemicals, metallurgy, exploitation and processing of minerals, and production of building materials. To further develop the industries of textile and garment, leather and footwear for export. To attach importance to the development of farm, forest and aquatic product processing industries.

b/ Objectives:

To raise the industrial ratio to the region's total GDP to 40-41% by 2010; the ratio of basic industries to 45.8-46.8% of the region's industrial production value by 2010, of which the mechanical engineering (manufacturing engineering, shipbuilding, electric appliances, means of transport, etc.) shall account for 27.5-28.5%.

For specific growth targets, see Appendix III.

3. Region 3

a/ Orientations:

To concentrate on the development of the industries of farm, forest and aquatic product processing, petrochemistry, shipbuilding, manufacturing mechanical engineering, production of building materials, textile and garment and leather and footwear. To step by step lay the foundation for and develop electronics and information technology in support of the development of other industries.

b/ Objectives:

By 2010, the industrial ratio to the region's total GDP shall reach 46-47%; the ratio of basic industries shall reach 24-25% of the region's industrial production value by 2010, of which the chemical industry shall account for 19-20%. To maintain the ratio of farm, forest and aquatic product processing industries at 39-40% of the region's total industrial production value. To complete the investment in and put into operation Dung Quat Oil Refinery Project.

For specific growth targets, see Appendix IV.

4. Region 4

a/ Orientations: To concentrate on the development of hydroelectricity, industries of processing of farm and forest products (including coffee, rubber, paper pulp, sugar cane, etc.) and exploitation and processing of minerals, particularly bauxite.

b/ Objectives:

The industrial ratio to the region's total GDP shall reach 13-14% by 2010; the industries of processing farm and forest products such as coffee, rubber, paper pulp, sugar cane, etc., shall account for 38-39% of the region's total industrial production value; the basic industries shall account for 27.6-28.5% of total industrial structure. To strive to commission the large bauxite-aluminum complexes in service of export production.

For specific growth targets, see Appendix V.

5. Region 5

a/ Orientations:

To concentrate on the development of industries of petroleum exploitation and processing, electricity, processing of farm, forest and aquatic products, especially mechanical engineering, electronic, computer software, chemical and pharmaco-chemical industries. To develop industries of high-quality textile-garment and leather-shoe for export. To develop industries on the basis of application of high technologies and develop products of high intellectual contents. To gradually reduce the ratio of labor-intensive industries.

b/ Objectives:

By 2010, the industrial ratio to the region's GDP shall reach 51-52%; the basic industries shall account for41.6-42.6% of the region's total industrial production value.

For specific growth targets, see Appendix VI. 6. Region 6

a/ Orientations:

To concentrate on the development of export-led farm, forest and aquatic product processing industries; to develop gas-fueled industries and mechanical engineering in service of agriculture, especially the industries of post-harvest processing and preservation of farm, forest and aquatic products and shipbuilding engineering.

b/ Objectives:

By 2010, the industrial ratio to the region's total GDP shall reach 26-27%; to develop farm, forest and aquatic product-processing industries into major industries of the region (accounting for 56.6-57.6% of the region's total industrial production value).

For specific growth targets, see Appendix VII.

III. ORIENTATIONS FOR DEVELOPMENT OF INDUSTRIAL ZONES AND PARKS

To intensify the attraction of investors to fill up the existing industrial parks. To carefully consider the construction of new industrial parks along routes with favorable traffic conditions.

The construction of industrial parks shall be followed by the construction of urban centers to provide dwelling houses and socio-cultural services to laborers.

The construction of industrial zones and parks must be associated with the construction of waste treatment systems to protect the environment.

To develop industrial zones and spots to promote the development of cottage and handicraft industries and rural industries.

IV. TOTAL DEMAND FOR INVESTMENT CAPITAL FOR INDUSTRIAL DEVELOPMENT TILL 2010 SHALL BE VND 640-670 THOUSAND BILLION (SEE APPENDIX VIM FOR DETAILS).

V. IMPLEMENTATION SOLUTIONS AND POLICIES

1. Basic solutions

a/ Renewal of state management of industry

- The state management of the industrial sector should vigorously shift to the function of promoting and serving the industrial development, restricting to the utmost the application of administrative measures to enterprises' production and business activities, and gradually reducing the sector-managing units.

- To further study and renew the way of thinking and methodology in the formulation and management of the industrial planning suitable to the mechanism of socialist-oriented market economy in order to raise the planning quality and make the planning one of the industrial management tools.

- To further study and formulate such schemes on development of industries as improvement of competitiveness, promotion of export of industrial products, development of processing industry, development of support industries, etc. To effectively implement schemes on development of industries in service of agricultural and rural industrialization and modernization; to intensify industrial extension activities, etc.

- To enhance the administrative reform and swiftly settle proposals of enterprises.

b/ Solutions related to the production and business mechanism

- To create a transparent and consistent production and business environment as well as an equal footing for all economic sectors.

- To formulate a mechanism of distributing incomes according to work results and efficiency in order to create a driving force for development of production and business of industrial enterprises.

c/ Renewal of state enterprises

- To further reorganize, renew, develop and raise operation efficiency of state enterprises in the spirit of the Resolutions of the 3^rd and 9^th plenums of the IX^th Party Central Committee, the Political Bureau's Directive No. 45-CT/TW of October 22,2004, and the Prime Minister's Directive No. 11/2004/CT-TTg of March 30,2004.

* To develop a number of important corporations which the State needs to hold controlling stakes into economic conglomerates strong enough for competition in international economic integration.

d/ Raising of competitiveness of industrial products

- To devise solutions to reduction of production costs, especially intermediary costs.

- To raise the capacity of production technologies, turning out quality products which are fully competitive in the domestic, regional and world markets.

- To build and perfect the legal system which shall facilitate the fast development of e-eommerce.

2. Major policies

a/ Policy on mobilization of investment capital:

- Investment capital shall be mobilized from various sources, especially the population's idle capital, foreign investment capital and enterprises' self-acquired capital.

- To diversify forms of capital mobilization, with importance being attached to the form of international capital mobilization.

b/ Policy on human resource training

- To adopt the policy on fostering of talents through training, preferential treatment and salary regimes as well as management and employment of cadres in order to step by step form a contingent of leading scientific researchers for industrial development.

- To diversify training forms and link training with production activities.

- To allow enterprises to account training expenses into their production costs in order to encourage human resource training.

c/ Policy on sciences, technologies and environment

- To prioritize the allocation of state budget funds for scientific and technological research in the industrial sector. To encourage enterprises, especially those in non-state sectors, to invest in sciences and technologies.

- To enhance the protection of intellectual property, particularly inventions, in order to promote the investment in scientific research.

- To set up centers for supply of information, consultancy and transfer of advanced and modern technologies to enterprises.

- To build and develop the scientific and technological market.

- To adopt the regime of special preferences to attract intellectuals, prominent experts and skilled workers to work in regions meeting with socio­economic difficulties. To encourage overseas Vietnamese to transfer and develop technologies.

- To promulgate specific regulations on management of environmental pollution in industrial production.

d/ Financial and tax policies

- Financial policy:

+ To create all conditions for investors to mobilize capital from all sources.

+ To expand and develop financial institutions in service of industrial development.

- Tax policy: To supplement a number of tax policies in order to promote the development of key industries suitable with the process of international economic integration.

Article 2.- Organization of implementation 1. For ministries and branches

- The Industry Ministry shall have to publicize and direct the implementation of this planning and concurrently oversee and adjust it to cope with changes which affect the economy.

It shall coordinate with concerned ministries, branches and localities in further studying and improving the state management of the industrial sector and policies on development of specialized industries.

- The Finance Ministry shall study and propose amendments and supplements to policies on tax preferences in order to encourage the development of key industries suitable with the process of international economic integration.

- The Planning and Investment Ministry shall formulate investment policies and balance investment capital for the industrial development in annual and five-year plans.

- The Science and Technology Ministry shall coordinate with the Industry Ministry in formulating scientific and technological policies for industrial development.

- The Planning and Investment Ministry, the Agriculture and Rural Development Ministry, the Construction Ministry, the Trade Ministry, the Science and Technology Ministry, the Natural Resources and

Environment Ministry, the Transport Ministry, the Finance Ministry, and the State Bank of Vietnam shall, within their assigned functions, coordinate with one another in handling relevant matters at the request of the agency assuming the prime responsibility therefor.

2. For localities:

Provincial/municipal People's Committees shall:

- Concretize, adjust and supplement the industrial development planning in their respective provinces or cities in line with this planning's orientations.

- Incorporate contents for implementation of this planning in their annual and five-year plans for summing up and balancing by the State.

Article 3.- This Decision takes effect 15 days after its publication in "CONG BAO."

Article 4.- Ministers, heads of ministerial-level agencies, heads of Government-attached agencies, and presidents of provincial/municipal People's Committees shall have to implement this Decision.

APPENDIX I

GROWTH TARGETS OF MAJOR INDUSTRIES AND INDUSTRIAL PRODUCTS OF THE WHOLE COUNTRY
(Promulgated together with the Prime Minister's Decision No. 73/2006/QD-TTg of April 4, 2006)

Growth targets of industries and internal structure of the country's industrial sector

Development targets of major industrial products of the whole country till 2010

APPENDIX II

GROWTH TARGETS OF MAJOR INDUSTRIES AND INDUSTRIAL PRODUCTS OF REGION 1
(Promulgated together with the Prime Minister's Decision No. 73/2006/QD-TTg of April 4, 2006)

Growth targets of industries and internal structure of Region 1's industrial sector

Development targets of major industrial products of Region 1

APPENDIX III

GROWTH TARGETS OF MAJOR INDUSTRIES AND INDUSTRIAL PRODUCTS OF REGION 2
(Promulgated together with the Prime Minister's Decision No. 73/2006/QD-TTg of April 4, 2006)

Growth targets of industries and internal structure of Region 2's industrial sector

Development targets of major industrial products of Region 2

APPENDIX IV

GROWTH TARGETS OF MAJOR INDUSTRIES AND INDUSTRIAL PRODUCTS OF REGION 3
(Promulgated together with the Prime Minister's Decision No. 73/2006/QD-TTgofApril4, 2006)

Growth targets of industries and internal structure of Region 3's industrial sector

Development targets of major industrial products of Region 3

APPENDIX V

GROWTH TARGETS OF MAJOR INDUSTRIES AND INDUSTRIAL PRODUCTS OF REGION 4
(Promulgated together with the Prime Minister's Decision No. 73/2006/QD-TTg of April 4, 2006)

Growth targets of industries and internal structure of Region 4's industrial sector

Development targets of major industrial products of Region 4

APPENDIX VI

GROWTH TARGETS OF MAJOR INDUSTRIES AND INDUSTRIAL RODUCTS OF REGION 5
(Promulgated together with the Prime Minister's Decision No. 73/2006/QD-TTg of April 4, 2006)

Growth targets of industries and internal structure of Region 5's industrial sector

Development targets of major industrial products of Region 5

APPENDIX VII

GROWTH TARGETS OF MAJOR INDUSTRIES AND INDUSTRIAL RODUCTS OF REGION 6
(Promulgated together with the Prime Minister's Decision No. 73/2006/QD-TTg of April 4, 2006)

Growth targets of industries and internal structure of Region 6's industrial sector

Development targets of major industrial products of Region 6

APPENDIX VIII

DEMANDS FOR INVESTMENT CAPITAL FOR INDUSTRY DEVELOPMENT
(Promulgated together with the Prime Minister's Decision No. 73/2006/QD-TTg of April 4, 2006)

Investment capital to be mobilized under orientations from the entire society for the industrial sector in the 2006-2010 period shall be structured as follows:

APPENDIX IX

SIX TERRITORIAL REGIONS THROUGHOUT THE COUNTRY
(Promulgated together with the Prime Minister's Decision No. 73/2006/QD-TTg of April 4, 2006)

Region 1: Fourteen northern midland and mountainous provinces (Bac Kan, Bac Giang, Cao Bang, Dien Bien, Hoa Binh, Ha Giang, Lai Chau, Lang Son, Lao Cai, Phu Tho, Son La, Thai Nguyen, Tuyen Quang, Yen Bai).

Region 2: Fifteen provinces in the Red River delta and northern Central Vietnam (Bac Ninh, Hanoi, Ha Tay, Ha Tinh, Hai Duong, Hai Phong, Ha Nam, Hung Yen, Nam Dinh, Ninh Binh, Nghe An, Quang Ninh, Thai Binh, Thanh Hoa, Vinh Phuc).

Region 3: Ten coastal provinces in Central Vietnam (Binh Dinh, Da Nang, Khanh Hoa, Ninh Thuan, Phu Yen, Quang Binh, Quang Nam, Quang Ngai, Quang Tri, Thua Thien Hue).

Region 4: Four provinces of the Central Highlands (Dak Lak, Dak Nong, Gia Lai, Kon Turn).

Region 5: Eight provinces in the Eastern South Vietnam (Ba Ria - Vung Tau, Binh Duong, Binh Phuoc, Binh Thuan, Dong Nai, Lam Dong, Ho Chi Minh city, Tay Ninh).

Region 6: Thirteen provinces in the Mekong River delta (An Giang, Bac Lieu, Ben Tre, Can Tho, Dong Thap, Hau Giang, Kien Giang, Long An, Ca Mau, Soc Trang, Tien Giang, Tra Vinh, Vinh Long).-