Resolution 31/2021/QH15 on the economic restructuring plan for the 2021-2025 period

RESOLUTION

On the economic restructuring plan for the 2021-2025 period^[1]

THE NATIONAL ASSEMBLY

Pursuant to the Constitution of the Socialist Republic of Vietnam;

Pursuant to Law No. 57/2014/QH13 on Organization of the National Assembly, which has a number of articles amended and supplemented under Law No. 65/2020/QH14;

Considering the Government’s Report No. 423/TTr-CP of October 18, 2021, Verification Report No. 345/BC-UBKT15 of October 19, 2021, of the National Assembly’s Economic Committee, reports of related agencies, and opinions of National Assembly deputies;

RESOLVES:

Article 1. Viewpoints

1. To restructure the economy in association with changing the growth model to ensure macroeconomic stability and raise productivity, quality, efficiency and competitiveness of the economy based on science and technology, innovation and high-quality human resources, thus helping facilitate the socio-economic restoration and development, build an autonomous economy and increase its adaptability and resilience.

2. To continue restructuring the economy on the basis of inheriting and promoting the recorded achievements in a comprehensive and focal manner; to prioritize development of a number of sectors and fields that are potential and capable of catching up, developing in tune with, and surpassing those in the region and the world, and the 3 key tasks of restructuring investment, particularly public investment; restructuring the financial market, particularly credit institutions; and restructuring state enterprises, particularly state economic groups and corporations.

3. To restructure the economy with strategic breakthroughs involving improvement of institutions for development, digital transformation, innovation, and promotion of the role, potential and strengths of urban economy, key economic regions, major cities, and promotion of regional connectivity and urban-rural connectivity.

4. To mobilize, distribute and effectively use all resources for development, of which internal resources are strategic, fundamental, long-term and decisive while external resources are important.

5. To bring into full play the human factor, cultural, traditional and historical values, the determination of self-reliance and the spirit of solidarity of the nation in association with fully capitalizing on opportunities and favorable conditions in line with the development trend in the world, without lagging behind in the process of global economic recovery as well as in the process of restructuring the global production and supply chains.

Article 2. General objectives

To form rational and effective structures in each sector and field, and among sectors and fields and in the whole economy; to develop a large number of national products based on new technology and high technology; to significantly raise the competitiveness of some key economic sectors and make substantive improvements in the growth model, productivity, quality, efficiency and competitiveness, autonomy, adaptability and resilience of the economy.

Article 3. Major objectives and targets through 2025

1. The average labor productivity growth rate will be over 6.5% per year, with the labor productivity growth rate in the processing and manufacturing industry reaching 6.5-7% per year, and the labor productivity growth rate in key economic regions and 5 centrally run cities outpacing the national average labor productivity growth rate. To raise the ratio of science and technology and innovation in growth, in which the total factor productivity (TFP) will reach about 45% of GDP. To narrow the competitiveness gap with the ASEAN-4 countries, especially in the institution, infrastructure, and human resources indexes.

2. The average state budget deficit in the 2021-2025 period will be equal to 3.7% of GDP; to reduce the total number of public non-business units by at least 10% as compared to the 2021’s figure, of which at least 20% will ensure financial autonomy.

3. To ensure that total investment capital of the entire society will averagely make up 32-34% of GDP for 5 years. To raise the quality of public investment management institutions up to international level. On-balance sheet non-performing loans in the entire system of credit institutions will be kept at below 3%; to gradually develop a professional and sustainable debt trading market. To strive for all commercial banks to apply the Basel II’s standardized approach.

4. To strongly develop all types of markets. The stock market capitalization will reach at least 85% of GDP, the value of outstanding bonds, at least 47% of GDP, and the value of outstanding corporate bonds, about 20% of GDP. The Quality of Land Administration index in the Global Competitiveness Index (GCI) will leap by 10-15 places over the 2019’s ranking. To complete the establishment and publicization of the Land Management and Use Monitoring and Evaluation System. The Quality of Vocational Training index in the GCI will jump by 40-50 places; the Student Skill index will leap by 45 places as compared to the 2019’s ranking. Spending on science and technology will account for at least 1% of GDP; the number of enterprises applying technological innovations will increase by an average of 15% per year in the 2021-2025 period.

5. Vietnam will strive to have about 1.5 million enterprises, including 60,000-70,000 medium- and large-sized enterprises; the ratio of the private sector’s contribution to GDP will reach about 55%; international brands will be built for at least 5-10 national products.

6. The digital economy will account for about 20% of GDP; the proportion of digital economy in each sector and field will reach at least 10%.

7. By the end of 2025, there will be about 35,000 cooperatives, with more than 3,000 of them applying high technology to agricultural production and sale of agricultural products, and about 35% of agricultural cooperatives connecting with enterprises based on value chains.

Article 4. Central tasks of restructuring the economy

1. To focus on accomplishing the objectives of restructuring public investment, state budget, the system of credit institutions, and public non-business units

a/ Restructuring public investment

To continue effectively restructuring public investment and improve the quality of public investment management institutions; to improve various factors to raise the economy’s ability to absorb capital, especially the allocation and disbursement of public investment funds. To step up the decentralization and delegation of powers to ensure unified, effective and efficient management; to promote the initiative, creativity and responsibility of every level of administration and every sector and heighten the responsibility of heads of agencies and units with effective inspection and supervision mechanisms; to tackle problems in the process of investment management; to strictly handle violations, corruption and negative practices which cause loss and waste in public investment.

Public investment will lead private investment so as to create breakthroughs in attracting capital from the private sector at home and abroad; to earmark capital for the pivotal sectors and fields and key works and projects with spillover effects to promote socio-economic development. To concentrate resources on development of socio-economic infrastructure, especially infrastructure in growth-driving regions, infrastructure to enhance regional connectivity and sectoral connectivity, digital economy, education, health and cultural infrastructure, infrastructure in  disadvantaged areas, areas prone to epidemics, disasters and climate change; to ensure better balance between transport modes in transport infrastructure development.

b/ Restructuring the state budget

To study amending the Law on the State Budget, renew the state budget management decentralization in the direction of ensuring the key role of the central budget, increasing the autonomy of local budgets, basically overcoming overlaps in the state budget management to suit the development level of the economy.

To continue restructuring state budget expenditures toward sustainability, increase the proportion of development investment expenditures and reduce the proportion of current expenditures, and support the achievement of socio-economic development goals; to strictly adhere to the principle of only borrowing loans to cover development investment expenditures. To effectively implement public procurement policies to promote digital transformation, information safety, support innovative enterprises, and raise scientific and technological potential.

To further restructure public debts in a sustainable fashion, ensure safety of public debts, borrow loans within the state budget’s debt repayment capacity as suitable to the borrowing capacity and the level of loan absorption; to maintain and strengthen the fiscal resilience to cope with market risks or economic shocks, and strictly control the state budget’s contingent liabilities.

To amend and supplement the laws on taxes and charges according to the market principles and international practices in association with restructuring revenue sources, expanding tax bases and combating base erosion, covering all revenue sources, improving the effectiveness and efficiency of tax administration, and applying reasonable tax rates toward forming a synchronous tax system with a sustainable structure that enables reasonable mobilization of resources for the state budget. To review and improve tax incentive policies in order to encourage startup and innovative activities, and research, development and application of scientific and technological advances, encourage joint venture and linkage activities, upgrade value chains, develop supporting industries, and increase localization rates.

c/ Restructuring the system of credit institutions

To further restructure the system of credit institutions, and improve regulations on monetary and banking activities in adherence to the market principles, ensuring safety, health and stability of the system; to increase transparency and competitiveness in line with international practices and new development trends. To continue improving the legal framework on handling of non-performing loans, putting an end to the problem of cross-ownership; to step up the application of science and technology, especially digital technology, in banking activities, and develop modern banking products and services. To strengthen the financial capacity, governance and credit quality of credit institutions and people’s credit funds to ensure their safe, efficient, stable and sustainable operations.

d/ Restructuring public non-business units

To improve policies and regimes applicable to public non-business units while ensuring consistency of regulations to meet the requirements of operation of these units in different sectors and fields. To transform eligible public non-business units into joint stock companies; to uphold the mechanism of autonomy and accountability, thus helping promote the units’ proactiveness and improve their use efficiency of human resources and the State’s assets and finance. To accurately and fully calculate the prices of public services, ensuring publicity and transparency; to increase socialization to create a healthy and equal competitive environment in the provision of public services among units and organizations of all economic sectors. To establish a market for certain public services under the State’s management and direction.

2. To develop different types of markets, improve the efficiency of allocation and use of resources

a/ Developing the financial market

To restructure and develop the securities market; to expand the capacity of the capital market; to increase publicity and transparency for and protect lawful rights and interests of investors; to promote the development of professional investors. To develop infrastructure and improve the capacity to manage and monitor system risks.

To diversify financial institutions, venture capital funds, credit guarantee funds, microfinance institutions, financial advisory institutions, and providers of accounting, auditing and credit rating services, etc. To study formulating policies and laws to promote venture investment.

To comprehensively develop a safe, sustainable and effective insurance market that meets insurance needs of organizations and individuals, ensuring social security; to ensure that insurance enterprises will have strong financial capacity and executive governance capacity up to international standards and be competitive at home and globally.

b/ Developing the land use rights market

To focus on overhauling the system of land policies and laws to ensure harmonization of the State-market-society relationship; to improve the institutions on the rights of land users; to adhere to the principle of open and transparent market land prices, encouraging the development of independent land valuation services; to address major inadequacies in land use master plans and plans and land-related finance; to promote the development of the land use rights market; to encourage and facilitate the accumulation of agricultural land.

To accelerate the application of advanced technologies and digital technologies in the establishment and management of land database systems to be updated and connected to the national database systems. To increase public services in compensation, support and resettlement; to strictly manage public land areas and land areas for social housing development under commercial housing development projects; to accelerate ground clearance work to create land areas to attract investment. To promote the investigation, statistics, inventory and full accounting of the value of land use rights, especially for land areas being public assets and land areas managed by public non-business units or agricultural/forestry farms.

c/ Developing the labor market

To complete the legal framework on labor market development, and amend the Employment Law in line with new forms of employment and new industrial relations in the digital era, digital economy and sharing economy. To establish and complete a synchronous labor market information system with connected databases. To improve the quality of labor market forecasts. To develop a modern employment service system, facilitating job seekers and employers.

To formulate and improve strategies, programs, schemes and projects on reform of higher education and vocational education associated with encouraging training institutions in the exercise of autonomy and accountability and renewal of operation, attaching importance to aligning theoretical training with practical requirements, training high-quality human resources for each sector and field, and retraining of the workforce to meet the requirements of the Fourth Industrial Revolution; to promote scientific and technological research, innovation and startup activities in higher education and vocational education institutions. To increase the involvement of businesses in the process of labor training and retraining; to adopt policies to attract high-quality human resources to work in Vietnam.

To improve the legal framework on social security, gradually and sustainably expanding the coverage of social insurance toward the goal of universal social insurance. To adjust the policy for expanding the eligibility to get loans for vocational training.

d/ Developing the science and technology market

To improve policies to support and encourage organizations and individuals, especially enterprises, to invest in technology research, development and transfer and application of scientific and technological advances. To promote technology linkage and transfer among research institutes, universities and enterprises; to improve the capacity of enterprises, cooperatives and the people to receive, absorb and master technologies.

To promote the operation of technology transfer and evaluation intermediaries and brokers and technology exchanges; to import and transfer advanced technologies; to encourage foreign direct investment projects to make commitments on technology transfer or establishment of research and development centers in Vietnam. To promote joint research cooperation with partners owning source technologies, and expand national-level science and technology cooperation with advanced countries.

To improve the legal framework on innovative startup, intellectual property, standard, metrology and quality, and the electronic authentication and identification system. To expand and improve the system of standards and technical regulations in conformity with international standards.

To renew financial mechanisms and policies linked with outcomes and quality of scientific research, implement science and technology programs, tasks and funds associated with the society’s needs, product value chains and end products, encouraging the commercialization of research outcomes.

3. To develop enterprises; to promote connectivity among enterprises of different economic sectors; to renew and develop collective economy and cooperatives

a/ Restructuring and developing state enterprises

To continue reorganizing state enterprises with a focus on those operating in key and essential areas. To improve the legal system on state enterprises through providing clear rules on autonomy, accountability, application of standards in conformity with good international governance practices, and thorough application of market principles in wage policy. To develop mechanisms to separate economic development tasks, political tasks and social security tasks of a number of state enterprises. To further improve and effectively promote the model of agencies representing owners of state capital at enterprises.

To improve equitization mechanisms and policies toward diversifying divestment methods according to market principles; to introduce mechanisms of use of revenues from equitization, divestment, and addition of resources for development investment. To improve legal grounds for resolutely handling loss-making and inefficient projects. To minimize the number of state enterprises in which the State holds 100% of charter capital and continue reducing the number of enterprises in which the State maintains shares and contributed capital amounts; to solve inadequacies  and problems and raise the efficiency in the land management and use of state enterprises. To stringently uphold the administrative order and discipline and strictly handle violations that obstruct the process of equitization, state capital divestment and restructuring of state enterprises.

b/ Developing sole proprietorships, promote digital transformation, joint ventures and associations, and raise competitiveness

To formulate policies to encourage and support the formation of value chains and production networks; to ensure that Vietnamese enterprises will play an increasingly important role and participate in stages with high added value. To support the formation of a number of large private economic groups with a leading role in certain sectors and fields or in value chains.

To effectively and synchronously implement the Scheme on National Digital Transformation, and develop the digital economy and programs to support enterprises in digital transformation. To drastically and effectively reform administrative procedures; to identify and remove barriers to freedom of business, and improve the investment and business environment toward healthy and equal competition. To effectively implement measures to encourage the transformation of business households into enterprises.

c/ Promoting the role of foreign direct investment enterprises

To attract foreign direct investment (FDI) through mechanisms and policies to encourage the transfer of advanced technologies and modern governance, and production linkage based on value chains with domestic sole proprietorships.

To renew investment promotion methods to be more effective, focusing on potential partners; to attract strategic investors with professional and financial capacity and experiences, transnational corporations applying high technology, source technology, and environment-friendly green technology.

d/ Renewing and developing collective economy and cooperatives

To increase linkages, harness resources, and develop collective economy and cooperatives; to renew production organization, study and apply new models, improve the operational efficiency of collective economic organizations and cooperatives in tandem with bringing into play the mastery and increasing the benefits of cooperative members. To improve the mechanism of representation of ownership in collective economy and cooperatives.

4. To develop urban economy, strengthen regional connectivity and urban-rural connectivity, and promote the role of key economic regions and major cities

a/ To soon issue and strictly implement national, regional and provincial master plans; to drastically renew and improve the quality of urban master plans, develop the central urban system in conformity with the functions of each region; to set orientations for development of key economic regions; to select localities and urban areas with special advantages to build economic and financial centers with particular institutions, mechanisms and policies that are breakthrough and internationally competitive.

b/ To formulate and improve institutions on regional connectivity, and strengthen the organizational apparatus for regional coordination. To improve orientations, mechanisms and policies to effectively capitalize on cooperation and regional connectivity, and increase spillover benefits in raising the productivity, quality, efficiency and competitiveness and upgrading the value chains of industries with strengths; to develop green economic models and economic zones in conformity with the characteristics of each region.

c/ To study amending and supplementing legal provisions concerning state budget and organization of local administration; to implement medium-term public investment plans toward closely linking investment between the central and local authorities and among localities to invest in socio-economic infrastructure works, especially transport infrastructure, in order to increase the capacity and connectivity of the whole region. To review and build databases on socio-economic activities and natural resources and environment of regions, ensuring consistency with the relevant national database systems.

d/ To improve mechanisms and policies to promote the leading role of key economic regions and major cities in changing the growth model. To plan and develop urban areas in association with the goals of sustainable development, environmental protection and climate change response; to create favorable conditions for economic sectors to invest in and develop urban areas and urban technical infrastructure. In urban planning and development, it is necessary to regard the orientations of public transport and greenery development as a basis for harmonious development and improvement of the people’s life. To implement on a pilot basis particular mechanisms and policies and build new models to make breakthroughs in urban economic development.

5. To restructure all sectors toward modernity, develop a green and sustainable economy and maximize potentials and advantages

a/ Restructuring the agricultural sector

To improve mechanisms and policies, creating a new impetus for agricultural and rural development and farmers; to encourage and support all economic sectors to invest in agriculture and rural areas; to renew and develop appropriate and effective forms of advanced production organization, and expand goods production. To promote the development of green, clean, ecological, organic, hi-tech, smart and climate change-adaptable agriculture. To promote cooperation and association among the four parties (the State, farmers, scientists and enterprises) to link production with processing, distribution and consumption. To prioritize the formation and development of enterprises and cooperatives applying advanced governance technology and being capable of organizing production and consumption links for farmers in concentrated production areas.

To develop modern agricultural and rural infrastructure; to promote the development of agricultural mechanization, farm produce processing technology, and post-harvest preservation technology, and develop supporting industries and logistics services for agriculture. To accelerate labor restructuring in agriculture and rural areas; to improve the training of high-quality human resources. To strengthen trade promotion and development of product sale markets; to build brands for a number of Vietnamese agro-forestry-fishery commodities in the international market; to strongly develop e-commerce in agriculture.

b/ Restructuring the industrial sector

To focus on promoting innovation and digital transformation in the industrial sector; to take full advantage of the achievements of the Fourth Industrial Revolution to serve digitization and technologization of production and business methods with a view to raising the productivity and quality and ensuring efficient use of natural resources and energy in association with environmental protection and climate change adaptation.

To continue developing a number of basic industries such as energy, mechanical engineering, metallurgy, chemicals, fertilizers, new materials, and pharmaceuticals. To prioritize the development of a number of spearhead industries, new technologies, high technologies and supporting industries; to rapidly develop industries with high added value and move to stages with high added value in the global and regional value chains.

To build and develop specialized industrial clusters; to form on a pilot basis a number of industrial clusters according to competitive advantages, specialization and value chains.

To issue more policies to effectively exploit renewable energy; to complete, and organize the implementation of, master plans on energy to reduce greenhouse gas emissions in conformity with the committed goals, taking advantage of international assistance in technology transformation. To promote the development of environmental industries with modern technologies.

c/ Restructuring service sectors

To promote the restructuring of services on modern technology and digital technology platforms. To develop digital ecosystems as a basis for the development of digital society and digital economy; to develop e-commerce, effectively apply e-payment methods and new payment instruments and services. To give a high focus on trade remedies to protect production and consumer interests.

To concentrate resources on developing a number of potential services with a high content of knowledge and technology. To attract private investment in spearhead and key service sectors. To focus on forming a system of strong logistics centers, especially in aviation and maritime areas. To effectively tap the domestic market; to formulate policies to support enterprises in applying digital technology solutions for product traceability. To upgrade and improve the wholesale infrastructure system and develop distribution enterprises linking circulation with production.

To further restructure the tourism industry and diversify professional and modern tourism products; to concentrate efforts on addressing bottlenecks in tourism infrastructure. To adopt policies to promote tourism associated with conservation and sustainable development of traditional culture. To strongly develop health, education, culture and sports services. To develop cultural industries based on creativity and inheritance of cultural values and national quintessence, science and technology and intellectual property rights; to fully tap economic elements of cultural values, ensuring consistency and synchronization between sectors and the stages of creativity, production, distribution and consumption. To form a legal framework on development of the carbon credit exchange market and block chain-based exchanges to promote the development of ecological services and restoration of ecosystems and biodiversity.

Article 5. Organization of implementation

1. The Government shall formulate and complete before April 2022 a program of action for implementation of this Resolution; send a report on results of implementation of this Resolution, which shall be included in the report on results of implementation of the National Assembly’s Resolution on annual socio-economic development plan, to the National Assembly; and report to the National Assembly on results of mid-tenure implementation and entire-tenure implementation of this Resolution at the latter’s 2023 year-end session and 2025 year-end session, respectively.

2. The Standing Committee, the Economic Committee, the Ethnic Council, and other Committees of the National Assembly, delegations of National Assembly deputies, and National Assembly deputies shall, within the ambit of their functions, tasks and powers, oversee the implementation of this Resolution.

3. The Vietnam Fatherland Front and its member organizations shall oversee the implementation of, and mobilize the people of all strata to implement, this Resolution.

This Resolution was adopted on November 12, 2021, by the XV^th National Assembly of the Socialist Republic of Vietnam at its 2^nd session.-

Chairman of the National Assembly
VUONG DINH HUE