Resolution No. 11/NQ-CP dated February 24, 2011 of the Government on major solutions for controlling inflation, stabilizing the macro economy and ensuring social security.

THE GOVERNMENT

Resolution No. 11/NQ-CP of February 24, 2011, on major solutions for controlling inflation, stabilizing the macro economy and ensuring social security.

In furtherance of the National Assembly's resolution the Government promulgated Resolution No. 02/NQ-CP of January 9, 2011, on major solutions for directing and administering the implementation of the 2011 socio-economic development plan and state budget estimate. However, the world economic situation dev eloping in a complicated manner, with risks inflation and soaring prices of crude oil, essential production input raw materials and foods in world markets. At home, natural disaster and weather have adversely affected production and life; the prices of a number of commodities that are crucial production inputs such as electricity, oil and petrol, which have not yet fully complied with the market price-driven mechanism, have been reluctantly increased; meanwhile, we have recently had to loosen the monetary and fiscal policies to check the economic decline and maintain economic growth. This situation has caused price hikes and increased the risk of macro-economic instability in our country. Therefore, to concentrate on controlling inflation, stabilizing the macro-economy and ensuring social security become the objective and central as well as urgent task at present.

To these ends, the Government requests ministers, heads of ministerial-level agencies and government-attached agencies, chairpersons of provincial-level People's Committees, chairpersons of Boards of Directors , the Members' Councils and directors general of state-owned economic groups, corporations and enterprises to focus on directing and implementing the following major solutions:

1. Implementing tight and prudent monetary policies

The State Bank of Vietnam shall assume the prime responsibility for and coordinate with ministries, agencies and localities in:

a/ Implementing tight and prudent monetary policies and harmonizing monetary and fiscal policies to control inflation; administering and controlling the 2011 credit growth rate at below 20% and the total payment instruments at 15-16%; prioritizing credit capital for the development of production and business, agriculture, rural areas, export, supporting industries, medium- and small-sized enterprises; slowing down the extension and reducing the proportion of credits for non-productive sectors, particularly real estate and securities sectors.

b/ Proactively, flexibly and effectively administering monetary policy tools, particularly interest rates and money supply to ensure inflation control.

c/ Flexibly administering foreign exchange rates and markets according to market developments; enhancing the foreign exchange management, taking necessary measures for organizations and individuals, primarily state-run economic groups and corporations, to sell foreign currencies to banks when having foreign currency revenues and to buy them when having reasonable needs, ensuring foreign currency liquidity, stabilizing the exchange rates, meeting the requirements of production and business stabilization and development and increasing foreign exchange reserves.

d/ Strictly controlling gold trading, submitting in the second quarter of 2011 to the Government for promulgation a decree on management of gold trading in the direction of concentrated gold import and proceeding to get rid of gold bullions trading on the free market; effectively preventing cross-border gold smuggling.

e/ Closely coordinating with the Ministry of Public Security, the Ministry of Industry and Trade, provincial-level People's Committees and functional agencies in inspecting and supervising the observance of regulations on foreign currency exchange and gold trading; promulgating regulations on sanctions for violations, including termination and withdrawal of operation licenses and confiscation of assets; regulations on commendation and reward for the detection of violations in foreign currency exchange and gold trading; and severely handling intentional violations according to law.

2. Implementing tight fiscal policies, cutting public investment and reducing the state budget deficit

a/ The Ministry of Finance shall assume the prime responsibility for, and coordinate with other ministries, agencies and localities in:

- Directing and striving for the state budget revenue increase of 7-8% over the 2011 budget estimate approved by the National Assembly; intensifying inspection and supervision in the tax collection management and tax revenue loss combat; concentrating on handling outstanding tax arrears; applying coercive measures to collect outstanding tax arrears while limiting newly arising tax arrears.    

- Ministries, agencies and localities shall actively rearrange spending tasks in order to additionally save 10% of regular expenditures of the remaining 9 months in the 2011 estimate (excluding wages and wage-nature amounts and payments to policy beneficiaries and 10% saving of regular expenditures to create sources for wage reform according to the plan adopted early this year). Ministries, agencies and localities shall specifically determine their saving amounts and send them to the Ministry of Finance for summarization and reporting to the Prime Minister in March 2011. This additional 10% saving amounts will be managed by ministries, agencies and localities themselves from the third quarter of 2011, they will be considered and arranged for urgent tasks arising outside the estimates or transferred to the central budget under the Ministry of Finance's guidance. To temporarily stop the purchase of new cars, air-conditioners and office equipment; minimize expenses for electricity, water, telephone, stationery, petrol,..; to refrain from allocating funds for tasks which are not really urgent. Heads of agencies, units, localities and organizations using the state budget shall minimize expenditures on conferences, seminars, review meetings, domestic and overseas working trips.... To refrain from supplementing funds outside the estimates, except cases of implementation of policies and regimes and natural disaster and epidemic prevention and combat and consequence remedies as decided by the Prime Minister. To severely, promptly and publicly handle violations.

- Reducing the 2011 state budget deficit to below 5.% of GDP. Strictly supervising foreign loans and debt payment by enterprises, particularly short-term loans. Scrutinizing government debts, national debts, restricting reserves debt; not broadening the scope of government-guaranteed borrowers. Ensuring outstanding government debts, public debts and foreign debts within safety limits and the national financial safety.

b/ The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with other ministries, agencies and localities in:

- Not advancing 2012 state budget capital and government bond capital for projects, except urgent projects on natural disaster prevention and combat and consequence remedy.

- Not-prolonging the implementation of investment capital amounts from the state budget government bonds under the 2011 plan, recovering these amounts into the central budget for supplementing capital for works and projects to be completed in 2011.

- Setting up inspection teams to scrutinize all state budget or government bond-funded works and investment projects which have been allocated with 2011 capital, specifically identifying works or projects to be stopped, delayed or prolonged in 2011; withdrawing or transferring amounts already allocated but not yet urgently needed or for improper purposes, reporting them and proposing handling measures to the Prime Minister in March 2011.

- Inspecting and re-examining investments by state-run economic groups, corporations and enterprises, proposing handling measures to the Prime Minister to abolish inefficient or thinned-out investment projects, including offshore investment projects.

c/ The Vietnam Development Bank shall reduce at least 10% of the plan on investment credits from state credit sources.

d/ Ministries, agencies and localities shall:

- Refrain from deploying state budget- or government bond-funded new works and projects, except urgent projects on natural disaster prevention and combat and consequence remedy and national key projects as well as ODA-funded projects; review, reduce, rearrange for transfer investment capital from the 2011 state budget or government bonds under their respective management for concentrating capital for speeding up important and urgent works and projects to be completed in 2011.

- Report to the Prime Minister in April 2011 lists of projects subject to state budget capital or government bond investment reduction, lists of state enterprises' projects subject to investment reduction under their respective management and concurrently send them to the Ministry of Planning and Investment for summarization and reporting to the Government at its May 2011 regular session.

e/ State-run economic groups and corporations shall review, cut or reduce and rearrange investment projects, concentrating on main production and business fields, reporting to the Prime Minister in April 2011 lists of projects subject to investment reduction, and concurrently send them to the Ministry of Planning and Investment for summarization and reporting to the Government at its May 2011 regular session.

3. Boosting production and business, encouraging export, curbing the trade deficit and conserving energy

a/ The Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with other ministries, agencies and localities in:

- In the second quarter of 2011, promulgating and implementing regulations on adjusting the supply-demand balance for each essential commodity item, ensuring rational combination and association between domestic production and export and import management; further directing and promptly removing difficulties and problems in production and business in order to boost commodity production and service provision; directing the rice export management to ensure efficiency and stable food prices at home, coordinating with the Ministry of Finance in using national reserves to assure food security; constantly monitoring domestic and world market developments in order to work out in time measures to regulate and stabilize the market, particularly essential goods items. Proactively working out measures to fight speculation and price hike.

- Formulating plans for export and import management, striving to keep the trade deficit at not more than 16% of the total export turnover; establishing the process and principles for controlling the import of commodities, supplies and equipment of investment projects funded by state budget capital, government bond capital, government-guaranteed capital or investment capital of state enterprises; coordinating with the Ministry of Finance in conducting inspection and supervision to ensure strict implementation of the Prime Minister's directive on the use of home-made goods, supplies and equipment, particular projects using imported machinery, equipment and materials; proactively taking appropriate measures to control the import of consumer goods, limiting the trade deficit.

- Directing the Electricity of Vietnam and its member companies to work qui plans to mobilize to the utmost the capacity of power plants in order to meet the additional charge demand during the dry season, prioritizing electricity supply for production; coordinating with provincial-level People's Committees in directing the conservation and rational distribution of electricity to meet basic production and daily-life needs.

b/ The Ministry of Finance shall assume the prime responsibility for, and coordinate with other ministries, agencies and localities in:

- Actively applying necessary and seasonal tax- and charge-related measures to regulate profits earned from the export of a number of goods items such as steel, cement... through the use of some input elements currently priced lower than the market prices.

- Considering, exempting, reducing or rescheduling the payment of, tax on input raw materials imported for export production in such sectors which are still in short of domestic raw materials as textile and garment, footwear, aquaculture, cashew nut, timber production, pharmaceutical manufacture...; continuing to temporarily refund input value-added tax for goods actually exported in 2011.

- Examining and strictly supervising the declaration and application of specially preferential import tax rates as committed under free trade agreements and preferential tax policies applicable to non-tariff zones according to regulations. Reviewing for tax reduction goods items used as input raw materials for production which cannot be produced at home yet; studying export tax increases to appropriate levels for export-discouraged goods items, natural resources and crude materials.

c/ The State Bank of Vietnam shall supply foreign currencies for the import of essential goods which cannot be produced at home yet; restrict loans for the import of import-discouraged goods on the list promulgated by the Ministry of Industry and Trade.

d/ The Ministry of Agriculture and Rural Development shall assume the prime responsibility for, and coordinate with other ministries, agencies and localities in, focally directing the application of measures to support and encourage agricultural and rural development, to boost export, generate jobs and incomes for laborers and to ensure food security.

e/ Provincial-level People's Committees, particularly Hanoi and Ho Chi Minh City, shall base on their local production and consumption situation to direct the production, storage, smooth circulation and distribution of goods, primarily essential goods like food, foodstuffs, oil and petrol...; enhance price management and valorization in their respective localities.

f/ State-owned economic groups, corporations and enterprises shall continue stepping up their equitization and restructuring, strictly control production costs and renew their business administration in order to raise their production and business efficiency, ensuring reasonable goods and service prices; concentrate capital on their main production and business lines.

g/ Ministries, agencies and localities shall resolutely organize, guide, direct, inspect and supervise the implementation of regulations on thrift practice and waste combat; formulate and implement programs on electricity conservation by 10% under the Government's Resolution No. 02/NQ-CP; and at the same time implement necessary and appropriate measures to encourage enterprises and people to conserve energy (electricity, petrol and oil) and use high, green, clean and power-saving technologies.

4. Adjusting electricity and petrol and oil prices in association with supporting poor households

a/ Continuing with the petrol and oil and electricity price-administering roadmap under the market mechanism.

- The Ministry of Finance shall take the initiative in flexibly administering oil and petrol prices under the Government's Decree No. 84/2009/ND-CP of September 15, 2009, on oil and petrol trading, ensuring that domestic oil and petrol prices are close to world oil and petrol prices.

- In 2011, electricity prices will be adjusted one step; the Ministry of Industry and Trade shall review and submit to the Prime Minister for promulgation in the first quarter of 2011 a mechanism for electricity price administration under the market mechanism.

b/ The State shall adopt policies to support poor households after the adjustment of electricity prices.

5. Further ensuring social security

a/ The Ministry of Labor, War Invalids and Social Affairs shall assume the prime responsibility for, and coordinate with other ministries, agencies and localities in:

Synchronously implementing the social security policies under the approved programs, projects and plans; stepping up the implementation of measures to ensure social security under the Government's Resolution No. 02/NQ-CP.

Focusing on directing the support for poverty reduction in localities, particularly communes, villages and hamlets meeting with exceptional difficulties; supporting poor households and poor localities through labor export; providing loans to pupils and students...

Directing agencies and localities to fully, timely and properly implement regulations on assistance to policy beneficiaries, people with meritorious services to the country and persons in exceptionally difficult circumstances (lonely, weak elderly without any support,...).

b/The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment, other ministries, agencies and localities in, allocating funds for implementing social security policies under new poverty lines. 

c/ The Ministry of Labor, War Invalids and Social Affairs shall assume the prime responsibility for, and coordinate  with the Ministry of Finance, the Ministry of Industry and Trade as well as other ministries, agencies and localities in, directing the implementation of regulations on assistance to poor households when electricity prices are adjusted.

6. To step up information and propaganda activities

a/ The Ministry of Information and Communications shall assume 3fie prime responsibility for, and coordinate with the Propaganda and Education Commission of the Party Central Committee as well an agencies managing information, communications and press agencies in:

- Directing information, communications and press agencies to base themselves on the undertakings and policies of the Party and the State as well as the contents of this Resolution to provide adequate and timely information and propaganda, particularly on financial and monetary issues, prices, social security policies and policies to support poor households directly affected by electricity price adjustment, for public understanding and consensus.

- Severely and promptly handling according to its competence acts of spreading false news contrary to the direction of the Party and the State on the implementation of policies to control inflation, stabilize the macro-economy and ensure social security.

b/ Ministries, central agencies and branches and provincial-level People's Committees shall direct and actively provide adequate, accurate, timely, public and transparent information to the press, particularly on matters of public concern.

7. Organization of implementation

a/ Ministries, ministerial-level agencies, government-attached agencies and provincial-level People's Committees shall actively, seriously and resolutely implement this Resolution; monthly and quarterly review the implementation of Resolution No. 02/NQ-CP and this Resolution, report thereon to the Prime Minister and concurrently to the Ministry of Planning and Investment tor summarization and reporting to the Government at its regular month sessions.

b/ The Ministry of Planning and Investment shall:

- Monitor the situation and results of implementation of this Resolution by ministries, agencies and localities; make summarization reports to the Prime Minister at the fortnightly briefings of the standing cabinet members.

- Submit to the Prime Minister for reporting to the National Assembly in March 2011 on general and comprehensive solutions for socio­economic development and assurance of the macro-economic stability.

c/ The Vietnam Fatherland Front Central Committee shall coordinate with ministries, agencies, localities and the Front's member organizations in directing its member organizations to properly organize information, propaganda and mobilization activities so that enterprises and people are correctly and clearly aware of this Resolution and actively and practically participate in the implementation thereof with high consensus. Professional associations and societies shall organize enterprises to actively implement the undertakings, mechanisms and policies of the Party and the State as well as the contents of this Resolution.

d/ Ministers, heads of central agencies, chairpersons of provincial-level People's Committees, chairpersons of Boards of Directors, Members' Councils and directors general of state-run economic groups and corporations shall, within the ambit of their functions and assigned tasks, take responsibility to the Government and the Prime Minister for the implementation of this Resolution.

Though the tasks of inflation control, macro-economic stabilization and social security assurance are performed in a circumstance full of difficulties, we are strongly convinced that with our country's increased potential and political and social stability after 25 years of national renewal, under the leadership of the Party and with high determination of the entire political system, the consensus and efforts of all sectors, levels, business community and people, the inflation control, macro-economic stability and social security assurance objectives will be attained.-