Resolution No. 94/NQ-CP dated September 27, 2011 of the Government on the Government's Regular Meeting - September, 2011

RESOLUTION

THE GOVERNMENT’S REGULAR MEETING – SEPTEMBER, 2011

The Government on September 25 and 26, 2011 convened its first regular meeting to discuss and decide the following issues:

1. Reports: Socio-economic performance in September and the first nine months of 2011, forecast of domestic and global economic situation; the realization of the Government’s Resolution 11/NQ-CP, dated February 24, 2011; evaluation of inflation, recommendation of basic, effective and practical measures for dealing with inflation; implementation of the Resolution made at the Government’s regular meeting in August 2011, Government working program in September 2011; inspection work, settlement of complaints and denunciations, anti-corruption work in September 2011; outcomes of the administrative reform in Q3, 2011; the fulfillment of Việt Nam’s international commitments. The reports were presented by Minister of Planning and Investment, Minister of Finance, the Governor of the State Bank, the Minister-Chairman of the Office of Government, the Government Chief Inspector, Minister of Home Affairs and Minister of Foreign Affairs.

a) Socio-economic performance in September and first nine months of 2011

The Government announced that the socio-economic performance in September and the first nine months evolved positively with initial outcomes. The macro-economy was initially improved; major balances of the economy were fundamentally ensured; inflation was put under control and in the decreased trend; consumer price index surged by 18.16% year-on-year; increased budget collection met the demands for public spending and helped reduce overspending; disbursement of sources of capital was thrived; export earnings advanced relatively, while trade deficit in the first nine months continued to go down; credit growth, outstanding credit and total payment were appropriate to the macro-economic situation; foreign currency reserve was on the rise, foreign exchange market and exchange rate were stabilized; interest rates were adjusted lower. The growth rate was estimated at 6.11% in Q3, higher than the previous quarter, and 5.76% in the first nine months of the year. Despite a string of difficulties, achievements from industry, agriculture and service were positive. Social security was guaranteed, many policies were effectively implemented, serving to reduce difficulties for people; the fields of culture, education, healthcare, and job generation were paid due attention. Politics and social affairs were stabilized; national defense was strengthened; security, social safety and order were maintained. The administrative reform, settlement of complaints and accusations, anti-corruption work were improved. The signings and effective implementation of international agreements and deals, and diplomatic activities helped boost diplomatic ties of Việt Nam with other countries and heighten national status and prestige.

On the other hand, the domestic economy had to cope with a mountain of difficulties and challenges, namely unstable macro-economy, low competitiveness, high inflation rates, difficult business and production, large quantity of inventory, stagnated real estate market, high interest rate, high rate of bad debts in the banking system, high trade gap, low foreign reserves, high pressure on exchange rate, hard living conditions in groups of low-income earners, workers in industrial parks and ethnic minorities in remote and far-reaching areas, unstable and unpredicted natural disasters and epidemics.

To fulfill the key socio-economic goals and tasks for 2011, the Government requested ministries, agencies and localities to take drastic measures especially the goals and solutions which were put forth at the Government’s Resolution 11/NQ-CP, dated February 24, 2011 and Resolutions made at Government’s regular meetings; combine macro-economic policies, with first focus on fiscal policy, monetary policy, credit, export and import in order to rein in inflation, stabilize macro-economy, ensure social security and maintain appropriate growth rate and focus on the following solutions:

 - The State Bank of Việt Nam continues to apply close and effective monetary policy in line with market signals to curb inflation, gradually reduce interest rates, support credit access for essential demands for production and business, firstly for agriculture, rural areas, electricity, small and medium-sized enterprises, and for export; to regulate credit growth at around 15-17%, total payment of around 12%; maintain and develop the achievements in managing foreign currency and gold, research and early issue policies to mobilize foreign currencies and gold for investment and business.

- The Ministry of Finance works with the Ministry of Planning and Investment, other ministries, agencies and localities to conduct the close, synonymous and effective fiscal policy and monetary policy to curb inflation, stabilize the macro-economy, ensure social security, restructure investment mechanism; instruct localities to increase collection for state budget, manage spending closely, economically and efficiently to reduce overspending of state budget (under 4.9% of GDP); regulate prices of indispensable commodities in line with market principles, State management, in appropriate roadmaps, inflation curbing, macro-economic stability and social security. The Ministry will coordinate with the Ministry of Agriculture and Rural Development to propose measures to assist localities in preparing for and overcoming damages caused by natural disasters, storms, flooding, and epidemics.

- The Ministry of Planning and Investment will work with other ministries, agencies and localities to restructure investment and regulate the management of construction’s investment; allocate funds for urgent, effective and nearly completed projects; distribute funds for socio-security programs on scheduled without taking budget from 2012; resolutely suspend projects which are not urgent or lack of capital for completing on time.

- The Ministry of Agriculture and Rural Development works with other ministries, agencies and localities to solve difficulties, speed up agro-forestry and fishery production; develop herds of animals and poultry to meet the market’s demand; avoid food shortage which would push up costs of food and foodstuff especially in the upcoming Lunar New Year Festival; assist fishermen in developing offshore fishing and production; positively prepare for natural disasters, prevent diseases on animals and poultry; timely provide assistance for people to stabilize production and livelihood after natural disasters and epidemics.

- The Ministry of Industry and Trade work with relevant agencies to conduct measures to boost export; control import of unnecessary products and those that are produced domestically; enhance market investigation and supervision measures; ensure balance of goods for production and consumption, especially for the upcoming Lunar New Year Festival; cooperate with the Ministry of Finance and localities to prevent speculation and price hikes; punish smuggling and trade frauds, production of fake goods and tax evasion.

- The Ministry of Transport, the Ministry of Public Security in collaboration with localities to take drastic measures to reduce traffic accidents and congestion; apply punishment to motorbike races, drunk driving; reasonably organization of traffic in Hà Nội and Hồ Chí Minh City; prevent the uses of roadways and sidewalks for parking.

- Ministries, agencies and localities speed up the administrative reform, especially in five municipal cities to generate attractive investment environment; implementation of projects on administrative reform; investigation of administrative procedures at all levels; enforce laws in direction and management in the way of open and transparent to realize the tasks of inflation curbing, macro-economic stabilization, social welfare maintenance and having reasonable growth rate.

- The Ministry of Information and Communication instructs the mass media, especially the Việt Nam Television (VTV), the Voice of Việt Nam (VOV), and the Việt Nam News Agency (VNA) to disseminate news in appropriate mode and time; run open, transparent and subjective news on the guidelines of the Party, policy and law of the State, instructions and management of the Government in favor of the implementation of the Government’s Resolution 11/NQ-CP. Based on their fields, Government members positively provide and publish information of the orientations, policy, instruction and management to generate high consensus in the society.

- Ministries, agencies and localities synchronously conduct the policies on social welfare, focusing on extremely poor and difficult areas, the poor, merit people, and ethnic minority groups; effectively implement the orientations and resolutions of the Party and State in the aspects of national defense, security, national sovereignty, political security, social order; settlement of accusations, especially those involving many people and lasting for long time; attach importance to anti-corruption and thrift practice.

- Competent ministries and agencies quickly review and propose supplement and amendment of their functions, tasks and structure to avoid overlapping and coincidence, edge competence and effectiveness of management over their assigned scopes. Government members strictly comply with the Government’s working regulation in preparation for and attending meetings, aiming to raise the quality of Government’s meetings; speed up the preparatory work for proposals to be submitted within the working programs; overcome the lack of documents stipulating the laws and ordinances.

b) Inflation rates and solutions:

The Government claimed that over the past years, the prolonged high inflation stemmed from a string of reasons, including the impacts of the world economy as the country’s economy is opener than many other countries. The main reason, however, are come from the internal affairs, namely the prolonged flexible monetary and fiscal policy, credit growth rate raised, high rates of budget overspending; inappropriate economic structure and investment machanism, low productivity and investment efficiency; the price management, circulation system and goods distribution are still inappropriate; production and business input costs are soaring; weak information also contributed to the prices hikes.

The Government acknowledged that the problem should be tackled by both short-term and long-term solutions. Firstly, it is necessary to apply the tight monetary and fiscal policy; improve investment efficiency; boosting exports; control imports in an appropriate way to ease trade gap; raise the effectiveness of agricultural production; reinforce confidence of people in the country’s macro-economic policy. In the long term, it is vital to alter growth model which will apply scientific and technological advancements, raise productivity, edge competitiveness of the economy; restructure the economy by focusing on investment mechanism, SOEs, and the financial and banking system; allocating sources for production and business; synchronously develop and improve state management capacity of markets; control inflation and improve the dissemination work.

 2. The Government listened and gave comments on the Reports of financial situation and efficiency of production and business activities of SOEs in the 2006-2010 period, orientations, tasks and solutions in the 2011-2015 period which was presented by the Finance Minister.

The Government asked the SOEs to allocate capital to their main fields of production and business, not to their outside fields, especially finance, insurance, real estate, and securities. Those SOEs that already invested in such areas would have to map out divestment plans and suspend business. Management officials have to give drastic proposals to deal with SOEs which operate inefficiently and suffer from prolonged losses; recommend compact and effective management model for the SOEs.

The Ministry of Finance collects comments of Government members to finalize Report and compose a proposal to restructure every SOEs, then submit it to the Government; the Ministry of Planning and Investment is to make a preliminary summing-up of the five-year pilot for building of SOEs model.

3. The Government listened to Minister of Education and Training to report on a draft education development strategy for the 2011-2020 period.

The drafting of the strategy must be based on the Resolution of the 11th Party Congress and the Resolution of the 2nd Plenum of the 11th CPV Central Committee, assesses reality, clearly defines viewpoints, targets, tasks and solutions to uphold the attained achievements, surmount shortcomings, weaknesses, and convert education and training into a leading national policy and a breaking point for fast and sustainable growth.

The Ministry of Education and Training works with the Ministry of Justice, the Office of Government and relevant agencies to collect comments, finalize the draft strategy in concrete and feasible manner, and consult the National Education Council before submitting it to the Prime Minister for issuance./.