Outcomes of socio-economic development in 2011-2013, tasks for 2014-2015

Leaders of the Party, State, and Fatherland Front of Viet Nam,

Members of the National Assembly,

Veteran Revolutionaries,

Distinguished guests,

Dear fellow citizens,

On behalf of the Government, I have the honour to report to the National Assembly and fellow citizens about the socio-economic situation in 2013, results of the first three-year implementation of the five-year plan for 2011-2015 and the tasks for 2014-2015.

Part I

SOCIO-ECONOMIC SITUATION IN 2013,

RESULTS OF THE FIRST THREE-YEAR IMPLEMENTATION OF THE FIVE- YEAR PLAN FOR 2011-2015

The targets and tasks stated in the 11^th Party Congress Resolution for the five-year plan of 2011-2015 were developed amidst global adoption of pro-growth policies to respond to the global financial crisis and economic downturn, and optimistic forecasts for global economic recovery. The domestic situation enjoyed favourable conditions, pro-growth policies adopted since 2009 had proven effective. At the end of the five-year plan for 2006-2010, the annual economic growth rate was recorded at 7%. Viet Nam has escaped the underdevelopment status and accomplished a number of Millennium Development Goals. Many major targets of the five-year plan were set on the basis of the relatively high growth rate recorded during the previous five years without sufficient projection of the negative consequences of the global financial crisis and economic downturn on the domestic economy.

Over the past three years, the world situation has evolved with numerous complexities. Conflicts and natural disasters occurred in many regions. The global economy has seen slower recovery than predicted. The recent global financial crisis and economic downturn was considered to be the worst of its kind since the Great Depression of the 1929-1933 period. Many developed industrial countries have taken drastic policy adjustment to protect domestic production. Fierce competition among the major powers in the region, complicated developments in the East Sea and the East China Sea and several other adverse factors have been hindering the domestic socio-economic development.

The inherent shortcomings and weaknesses of the domestic economy and the negative aspects of pro-growth policies have fuelled inflation and severely threatened macro-economic stability. Economic growth continued to slow down; production and people’s life faced with many difficulties. Natural disasters and epidemics caused substantial damages. The competitiveness of the economy remained low amidst the greater degree of international integration. There has been increasing demand for enhancement of social security, social welfare and living condition as well as maintenance of national security and defence despite limited available resources.

Given the new developments, immediately after the 11^th Party Congress, the Party and State have made timely adjustments to the major targets and tasks toward focusing on curbing inflation, stabilizing the macro-economic situation, maintaining suitable growth rate, and ensuring social security and social welfare. The National Assembly has passed resolutions on the annual and five-year socio-economic development plan. The Government has taken drastic measures to ensure the implementation of the Party and State resolutions in line with the reality. The timely and sound policies adopted have been crucial to the socio-economic stability and development of the country.

The Party, ministries and agencies at all levels have devoted much time and effort to the implementation of the Resolution of the 4^th Plenum of the Party Central Committee on “Current urgent issues on Party building” and the amendment of the Constitution.

Thanks to the efforts by the entire people, the army and the business community as well as the whole political system under the Party leadership and State governance, the socio-economic situation has seen positive changes in the right direction.

Based on the outcome of the first nine months and estimations for the remaining months of the year, the Government would like to report to the National Assembly and the entire people about the socio-economic situation in 2013, results of the first three-year implementation of the five-year plan for 2011-2015 and the tasks for 2014-2015 with focus on the followings:

I. THE ACHIEVED RESULTS

1. The macro-economic situation basically stabilized, inflation controlled

Comprehensive measures have been taken to control inflation and stabilize the macro economic situation. Fiscal and monetary policy instruments have been utilized with flexibility and effectiveness. The consumer price index rose by 4.63% in the first nine month of 2013, down from 6.81% in 2012 and 18.13% in 2011. The figure is projected to reach 7% for 2013 (against the target of approximately 8%).

Total liquidity and outstanding credit liabilities have been controlled in accordance with the target of curbing inflation, stabilizing macro-economy and ensuring suitable economic growth rate. The average deposit interest rate and lending interest rate saw a sharp decline. Exchange rates remained stable; foreign reserve increased rapidly, equivalent to about twelve weeks of import. The dollarization and goldenization of the economy have been significantly reduced. Confidence in the Vietnamese Dong has been on the rise.

Uniformed measures have been implemented to boost export. Export rose by 15.7% in the first nine months and is predicted to increase by 14.4% for the whole year (against the target of 10%). The three-year average annual increase is 22% (against the five-year plan target of 12%). Import is estimated to rise by 15.6% in 2013, making a trade deficit of 0.4% the total export turnover (the target was 8%). The trade balance was significantly improved. Trade and investment relations continue to be expanded with almost all countries and economies.

State budget management, deficit prevention and thrifty spending have been promoted. Budget expenditure for 2011-2012 has been balanced according to plan. In 2013, budget revenue is faced with difficulties, achieving 96.9% of the set target while budget expenditure is recorded at 100.8% of the estimate. Budget deficit accounts for 5.3% of the GDP. Government debt, public debt and foreign debt have been kept within the safety limits.

The domestic market continues to grow. A sharp decline in inventories was recorded. The prices of commodities and essential public services such as electricity, petroleum, coal and healthcare have been gradually put into operation under the market principles with a suitable roadmap while assistance continues to be provided to policy beneficiaries and poor people.

The business environment continues to be improved. The amount of  newly registered and disbursed FDI increased year on year, accounting for approximately 25% of the total social investment with a stronger focus on the processing industries, manufacturing and high technologies. In the first nine months, registered and disbursed FDI grew by 36.1% and 6.4% respectively while the committed and disbursed ODA rose by 8.83% and 8.68% respectively. Country’s total investment in 2013 is estimated at 29.1% GDP.

2. The economy recovered to some extent

Focus has been made to address the obstacles to production and business, support the market, handle non-performing loans, reduce inventories and focus credit in the areas of priority. In 2011, GDP grew by 6.24%, up from 5.25% in 2012. Economic growth has been enhanced quarter-by-quarter in 2013 (4.76% in Quarter I; 5% in Quarter II; 5.54% in Quarter III). The annual growth rate is estimated at 5.4%. On the three-year average, GDP rose by approximately 5.6% per year. Industrial production and construction has been gradually recovered. Agriculture continues to see stable growth; while services grew considerably. Within the first nine months, the number of newly established enterprises increased by 10.8%, and over 11,200 enterprises have resumed operation.

The quality of growth has been upgraded. Investment has been more efficient. The ICOR has been reduced from 6.7 for 2008-2010 to 5.53 for 2011-2013. Productivity in 2013 increased by 10.1% compared to 2010. Energy consumption per unit of GDP is on the decline.

3. Initial progress made in economic restructuring

Institutions and policies have been developed to restructure the economy and reform the growth model. Implementing the approved Master plan, ministries, agencies and localities have been proactively developing and implementing the projects and action plans, reviewing and improving planning, promoting science-technology application and restructuring enterprises, products and the market.

Investment restructuring with a focus on public investment: adjusting the structure and mechanisms of investment allocation; focusing funds on the important constructions and urgent projects; allocating adequate countervailing fund for ODA projects. Strictly controlling the new projects and constructions; partially addressing the scattered and ineffective investment. Managing and balancing investment according to the medium-term development plan. Improving the decision-making decentralization in investment; ensuring consistent governance from the central to local levels; promoting the accountability of local authorities and investors. Strengthening investment mobilisation from various sectors. Non-state investment increased from 61.3% in 2006-2010 to 62.6% in 2011-2013.

Financial and credit restructuring with a focus on commercial banks: initial results recorded in implementing comprehensive measures to restructure credit institutions. The operation of the banking system has been controlled and secured. Weak banks have been restructured. Four state commercial banks have been equitized. The Central People’s Credit Fund became the Co-operative Bank of Viet Nam. Liquidity has been improved; the competitiveness of commercial banks has been strengthened. Complete regulations have been put in place to ensure the safety and strengthen the monitoring and inspection of credit institutions. Taking proactive measures to handle and curb non-performing loans; putting the Viet Nam Asset Management Company (VAMC) into operation. Reviewing and preventing the cross-ownership in the banking system. Restructuring and enhancing the operation of securities and insurance firms.

Restructuring state-owned enterprises: focusing on completing the institutions and policies on reforming the management of state-owned enterprises. Implementing legal documents toward strengthening state governance and clearly defining the rights and responsibilities of the state owner in enterprises; enhancing accountability, promoting self-reliance and transparency of enterprises within the market economy in line with the domestic laws and international practices.

The Project “Restructuring state owned enterprises for 2011 – 2015” has been implemented with the focus on key sectors, essential public services, national security and defence. Restructuring each corporation and economic group; reviewing for approval the organisation and operation principles; identifying the mandates and core business areas; withdrawing capital from non-core businesses; promoting equitization; reforming corporate governance; enhancing internal control and personnel management. Restructuring the Vinashin and the Vinalines. Operational effectiveness and competitiveness of the state-owned enterprises have been gradually improved. The state-owned enterprises have basically fulfilled their assigned tasks and roles; state governance and ownership in SOEs continues to be completed in line with the market economy institutions and the demand for international integration.

The economic structure continues to shift toward industrialization and modernization. The industrial and construction sector has focused on developing high-tech and high value-added industries, export and support industries and agriculture and aquaculture processing industry. The ratio of the processing and manufacturing industries rose from 60.2% in 2010 to 78% in 2013. Urban management has been strengthened. The urbanization rate increased from 30.5% in 2010 to 33.4% in 2013.

The Plan on restructuring the agricultural sector towards greater value-added and sustainable development has been implemented with the focus on transforming the crop and animal structure, promoting application of technology, building large-scale and industrial crop zones and high-tech agricultural zones, linking production with product processing, preservation and distribution, and integrating into the global production network and value chain. Many new production models that meet production capacity and market requirements while balancing interests were formed and gradually multiplied.

The New Rural Area Construction program (NRAC) was actively implemented. The rural area has seen many changes, especially on the socio-economic infrastructure; people's material and mental wellbeing continues to be improved. The rural economic and labor structure has experienced positive changes. The ratio of agriculture, forestry and fishery in the rural economy has declined. The agricultural labor ratio in the rural area has declined from 49.5% in 2010 to 47% in 2013. Agriculture and the rural area continue to make important contributions to the stability and socioeconomic development of our country.

In the service sector, each industry and business has restructured itself toward increasing efficiency and competitiveness while focusing on potential, advantageous, high-tech and high value-added areas such as information technology, communication, finance and banking, transportation, logistics, tourism, trade, distribution, etc. The service sector has seen relatively high growth over the last 3 years.

4. Uniform implementation of the three strategic breakthroughs resulted in intial achievements

The market economy institutions and the socialist law-governed State continue to be perfected, creating a favorable environment for socioeconomic development and the promotion of people's ownership. The people's consultation on the Constitution amendment was well organized. The construction of laws and ordinances was basically completed. The government, the Prime Minister and ministries, ministerial level agencies have promulgated over 2,200 legal normative documents. The quality and promulgation speed of these documents have also improved.

The Public Administrative Reform Master Program continues to be promoted. The clear definition of the functions, responsibilities and institutional structure of ministries, agencies and localities continues to be perfected. Public service and public servant reform has been carried to increase transparency, leader's responsibility and accountability. Application of information technology has been promoted. The one-stop shop and one-stop shop message mechanisms have been widely implemented at the district level. Over 3,600 administrative procedures were simplified. The reform on citizen procedures and documentation continues along with the completion of resident management databases.

On human resource development: Human resource development planning, institutions and policies continue to be implemented and perfected. The proposal on issuing the Resolution on basic and comprehensive education and training reform was submitted to the Party Central Committee. Network and scale of the education and training expanded with improved quality. The development of education and training in difficult, mountainous and minority areas and for policy beneficiaries has been prioritized. The content and method of education and training has been gradually adjusted. Forms of training were diversified in accordance with market needs. Testing, quality evaluation, information technology application, and foreign language teaching and learning have made progress. Investment in teaching and learning facilities has been promoted. The teaching staffs have grown in both size and quality. The autonomy of training institutions has been increased. Inspection and monitor have been improved. Preferential credit policy for poor students has been effectively implemented. Many students have gained prestigious prizes at regional and international competitions. Vocational training has been further promoted, especially for rural labor to develop the labor market and attract high quality labor. The ratio of trained labor increased from 40% in 2010 to 49% in 2013.

The Party Central Committee's resolutions, laws, strategies and programs on science and technology have been actively implemented. State management of science technology has experienced reform. Our scientific and technological capability has made one step forward. The number of internationally published and cited scientific research has increased 28% from 2011 to 2012. Two telecommunication satellites and one remote sensing satellite were put into operation. The science and technology market has expanded, with 11,700 transactions totaling VND 5,680 billion in 3 years. The application of science and technology inventions has been widely expanded, especially in agriculture, construction, information, and healthcare, making substantive contributions to national construction and defense.

On infrastructure construction: We have assessed and added to the infrastructure development plan following a comprehensive and long-term vision. We have focused on reducing scattered and ineffective public investments. The attraction of non-state investment sources through multiple forms (BOT, BT, BOO, PPP) for infrastructure development has been promoted. Many transportation, water resource, energy, telecommunication, and urban infrastructure projects have been effectively put to use. We continue to invest in the construction of many new and important projects.

5. Social and cultural progress; guaranteed social security; improvement in people's wellbeing

Job creation measures, especially vocational training and credit support, were harmoniously implemented. It was estimated that 1.54 million jobs were created last year, and 4.6 million over the last 3 years, including 253 thousand export jobs. The urban unemployment rate was kept below 4%, and currently at around 3.48%.

The wage policy was gradually changed following market principles. Minimum wage was adjusted upward in accordance with national socioeconomic conditions. Income per capita also increased. Working conditions and relations were also improved, along with a sharp reduction in work conflicts and strikes.

The number of social security participants has increased. The National Target Program on sustainable poverty reduction has acquired positive results. The poverty rate was reduced from 14.2% in 2010 to 9.6% in late 2012 and expected to reach 7.8% by the end of 2013. Viet Nam's achievements on poverty reduction and social security were highly appreciated by the international community.

The support policies for people with meritorious contributions to the revolutions and policy beneficiaries were successfully implemented. Over 98% of families with meritorious contributions enjoy average or above average living conditions. The number of regular social welfare beneficiaries rose from 1.7 million in late 2010 to over 2.5 million in 2013. The size and scope of support for minorities were also increased. Minority and extremely poor students have received free rice. Minority and poor children in needy areas have also received tuition and accommodation supports. Emergency aid and natural disaster relief have seen positive results. Social housing, Mekong Delta residential clusters and Central Coastal flood-proof housing programs were actively implemented. Outstanding credit balance for social policies up to the end of September 2013 was VND 118.5 trillion, a 32.4% increase from the end-of-2010 level.

Healthcare network and facilities continue to grow. The quality of health protection, care and treatment was also enhanced. Preventive healthcare received great attention, hence the containment of large epidemics. Many measures to reduce hospital overload were implemented, especially at highly congested hospitals and central and higher-level ones. Many provincial and district hospitals were constructed and put to use. The control and management of medicine, drug prices and food hygiene and safety were promoted. Health insurance participation rate rose from 63% in 2010 to 71.2% in 2013. The HIV/AIDS prevalence rate was contained below 0.3% of the population.

Population growth was kept under control. Efforts on elder care, child protection, care and education, family, gender equality, and women progress have shown improvements.

Culture and sports development was paid due attention. The 15-year implementation of the Central Decision on the development of a progressive Vietnamese culture imbued with national identity was concluded. We have focused on developing well-rounded Vietnamese individuals while preserving and promoting our people's cultural values. The "All people united to build up cultural life" movement was promoted in conjunction with the New Rural Area Construction Program. Many tangible and intangible cultural heritages were recognized national and international cultural heritages. Multiple literature and art development measures were implemented. Festival management was improved. Public, elite and professional sports have all made developments. Social exchange and international sport activities have been increased. Information and communication have experienced rapid developments, meeting people's diverse information needs.

6. Improvements in resource management, environmental protection and active response to climate change

Resource management improvement, environmental protection and active response to climate change measures were harmoniously implemented. The Resolution on continued land laws and policy reform and the Resolution on active response to climate change, resource management improvement and environmental protection were submitted to the Party Central Committee. The amended land Law was submitted to the National Assembly. The issue of land use right certificate was basically completed. Effective rice-planting-land management and use measures were implemented. We have actively carried out the government Strategy and Resolution on environmental protection and the national strategy on green and sustainable growth. Severe pollution sources were strictly punished. The plan on environmental protection at certain river basins was completed. National target programs on clean water, rural environment hygiene, pollution relief, environmental improvement and climate change were implemented. Our capacity to prevent and reduce natural disaster was improved. The inspection and supervision of conformation with the law as well as the punishment of violations were further strengthened. 

7. Corruption prevention, thrift practicing and wastefulness prevention acquired positive results

The task of corruption prevention continues to be implemented in conjunction with the Resolution of the 11^th Party  Central Committee’s 4^th Plenum on “the current urgent issues on Party building” and the study of Ho Chi Minh’s moral examples. Review of the implementation of the Resolution of the Party Central Committee’s 3^rd Plenum and the Law on Corruption Prevention has been conducted. We continued to perfect our institutional and organizational system while performing various measures to prevent corruption and wastefulness with focus on areas where negative behaviours may easily occur. Guidance and promotion of monitoring, inspection and disclosing results in handling corruption cases has been enhanced. Over the last 3 years, over 319 corruption cases involving 517 individuals have been reported, 111 cases and 235 individuals have been forwarded to  investigating agencies, 52 leaders have been handled.

The effectiveness of citizen reception, complaints and denunciation settlement improved. Dialogues, complaints and denunciation settlement at grassroot level have been strengthened while new exceeding-level complaints are limited. Focus have been made on reviewing and making final decision according to legal regulations on 466 out of 528 unresolved cases, ensuring transparency and the legitimate interest of the citizens.

8. National defense, security, national sovereignty are ensured; external relations obtained positive outcomes

The power of the national defense and people-based defense strategy has been strengthened. The synergy and ready-for-battle ability of the People’s Army have been improved to become a revolutionary, regular, well-trained and modernized force. We are speeding up the process of modernizing some essential force with strategic vision.

Political security and social order and safety are ensured. The people-based public security strategy and forces are strengthened to firmly protect our country’s important goals and events. We have ensured security and order in strategic areas of critical importance and prevented schemes and activities aimed at violating national security. Complicated cases are properly addressed.

Crime and social evils prevention are fostered. We have controlled order-violated crimes, razed various organized criminal groups, namely violation-related crimes, drug-trafficking crimes, economic crimes and high-tech crimes. Traffic orders and safety have made positive progress with decline in traffic accidents and improvement over traffic congestions in Hanoi and Ho Chi Minh city.

The task of foreign affairs are promoted on a comprehensive basis through a close coordination between Party, State and people’s diplomacy, thus resulting in various important achievements. We have been actively and consistently involving in the fight to assert and protect our sovereignty, and legitimate right of the country and citizens.

We have fostered international cooperation and increased strategic dialogues with important partners. Bilateral relations with some partners have been upgraded to strategic partnerships or comprehensive cooperation partnerships. Relations with leading and traditional partners have deepened. Viet Nam has actively and responsibly engaged in activities of ASEAN, and other regional and international forums and organizations, through which we have been able to make substantial contribution to resolving regional and global issues towards peace, cooperation and development. Complicated situations and emerging issues in the East Sea are properly addressed. We have gained sympathy and increasing supports from the international community over the struggle to protect our maritime and island sovereignty.

We are making the best use of opportunities while trying to overcome obstacles during the implementation of signed agreements on trade and investment. At the same time, we also actively engage in negotiations of other free trade agreements to expand our market, mobilize resources for socio-economic development and enhance the autonomy of our economy.

In recent years, through effective measures and coordination, the tasks of defense, security and foreign affairs have facilitated the environment and created favourable conditions for national protection and development while elevating Viet Nam’s position in international arena.

Reflected on the implementation of 2013 Plan, among 15 targets which were ratified by the National Assembly, 11 targets were acquired and beyond expectation, 2 targets were nearly obtained and 2 targets were not accomplished. In the midst of global economic slow-down with the domestic economy facing numerous challenges in controlling inflation, stabilizing macro-economy, ensuring social welfare, security and defense, such achievements required a great amount of efforts from the political system as a whole, from the Party, to the people and army.

II. WEAKNESSES AND RESTRICTIONS

Apart from achievements, socio-economic restrictions and weaknesses are still existed, namely:

1.     The macro economy is basically stable and inflation is controlled but not yet sustainable. Budget balancing has been difficult, government spending exceeds projected level. The progress to apply market pricing roadmap to some necessity goods and services has been slow and not able to create high level of social consensus. The operations of some credit institutions are unqualified. The housing and stock markets remain inactive. Total investment fund for social development in terms of GDP has not reached projected level. The efficiency and competitiveness of the economy are poor.

2.     Business operations have faced tremendous difficulties with high level of bad debts and close-down businesses. GDP growth rate is under projected level (5.4% compared to 5.5% projected). Industrial growth is considerably slow. Agricultural exports face numerous difficulties with low efficiency. There are many restrictions to disaster prevention and mitigation with regards to life and production, especially agricultural production.

3.     Economic restructuring and growth model transformation are implemented slower than requirement. Many sectors and projects are still low-value added, not yet able to connect with the global production network and value chain. Technological innovation is carried out slowly. The efficiency of investment capital allocation remains low. Debt settlement in construction sector is basically underperformed. Reforms of state owned enterprises and credit institutions are making slow progress. There’s a lack of innovative corporate governance and business productivity is very low. Planning quality and management face many restrictions. Reforms of agriculture and rural construction are slow with limited government budget and lack of social resources.

4.     The implementation of three strategic breakthroughs was carried out slowly. Institutional reforms were inconsistent without a policy mechanism to boost development. The procedures for legal development, quality control, and policy enforcement were still inadequate.

Public administration reform has not met requirements. Administrative discipline is not strictly implemented. The task of supervision, inspection is restricted. Education and human resources qualities cannot satisfy requirements. Training structure is irrational, with a lack of high quality labor, retraining and advanced training. The task of attracting highly qualified people for state administrative apparatus also faces many obstacles. Contribution of science and technology to socio-economic development is limited. Infrastructure system has not been able to meet with the requirements for development. There’s still lack of an effective policy mechanism to attract funds from outside the state sector.

5.     here are weaknesses and limitations in the area of social and culture. Job settlement is underperformed. The poverty and near poor rate remain high, especially in ethnic minorities areas. The gap between rich and poor household is wide. People’s healthcare and protection are still limited in some aspects, evidencing by some pressing incidents recently. Improving hospital congestion is progressing very slowly. State management over food hygiene and safety is still weak. The development of an advanced culture imbued with national identity is not yet satisfied; the side effects of market mechanism and international integration have not been effectively prevented; negative behaviors relating to morality and lifestyle are still existed in society. Management of information and media, especially the internet, is still inadequate.

6.     Management of natural resources, environmental protection is limited and weak. Discipline in management, exploitation and use of land, mineral resources has not been strictly enforced. Some hydroelectric projects have not appropriately applied the required regulations on safety and environmental protection. Environmental pollutions in many areas, industrial zones, villages, manufacturing facilities, watersheds have not yet improved. The ability to cope with climate change remains limited. Flooding situations in some major cities are slowly tackled.

7.     Corruption and wastefulness prevention are unsatisfied in comparison with the goal to prevent and gradually remove. The level of corruption and wastefulness are high. The task of monitoring, inspection and testing is poorly performed with very small number of corruption cases detected and slowly responded. Publicly pressing harassment cases by a small number of officials and servants remain unsolved. Time and resources wastage is large. Saving consciousness is not sufficiently promoted.

8.     National sovereignty protection still faces numerous challenges. Political security, social order and safety still hidden factors that can cause instability in some areas. Assurance of security over cyber information is still insufficient. The tasks to overcome leaking of state confidential information and prevent the use of internet detrimental to the country are not yet effective. Crime and social evils remain urgent issues. Traffic accidents show complicated development. Land-related lawsuits remain high.

III . CAUSES AND EXPERIENCE

1. Causes

The above limitations and weaknesses are caused by both objective subjective reasons. In addition to newly emerging problems, there are matters that already existed many years ago.

1.     Developments in the world are complicated and unpredictable with acceleration of science and technology, fierce competition in the global market, rapid process of globalization, the growing interdependence among economies. The process of international integration in our country takes place at a deeper level. External shocks will have direct and immediate impact on domestic socio-economic situation. However, our development thoughts and ability to capture, analyze and forecast are not yet satisfied the requirements, leading to outdated and inappropriate policies and measures.

2.     Awareness on a number of issues on development policy and perspectives remains different, lead to hesitant and inconsistent institutional reforms and policies on a number of issues, such as the role of the  state and state planned economy within a context of market economy, protection of people's sovereignty, ownership and land use rights, prices of essential goods and public services. These issues have not created any breakthrough to strongly mobilize all the resources for development. The governing method by leaders of the party cells and authorities is not clear and sufficient to meet the requirements of a market economy and international integration.

3.     There are still weak aspects in state management. Enforcement of Party and State’s policies has seen some efforts but progressed slowly and ineffectively. Time and resources are not yet allocated effectively to deal the extremely heavy impact of the financial crisis and global economic downturn.

2. Some initial experience after 3-year implementing the plan

Firstly, in a new context, we need a breakthrough in innovating development thinking by making national interests our highest priority. From this, we will develop policies to mobilize domestic and foreign resources for national development and defense. At the same time, we should promote the spirit of respecting laws, strictly complying discipline, focusing on the completion of a market economy and legally socialist state.

Secondly, we should pay close attention to actual situation, capture emerging developments and enhance evaluation and forecasting capacity to immediately determine the appropriate targets, policies and measures. At the same time, we shall be persistent and creative in implementing the right policy of the Party and State.

Thirdly, in the task of coordination and management, we need to focus highest priority which is to control inflation, stabilize the macro economy, and ensure the necessary conditions for sustainable growth. In a difficult economic condition, we must still prioritize resources for social security, agricultural and rural development and strengthening national defense and security. Economic development must be linked to social and cultural development and environmental protection.

Fourthly, amid difficult social and economic contexts, we still need to effectively allocate and use domestic resources, while increasingly engaging in international integration to attract external resources and create favourable conditions for national development and defense.

Fifthly, the whole political system has to perform effectively the information and communication task, promote the role of the Fatherland Front and mass organizations, strengthen national unity, and create social consensus in the development and implementation of the Party and State’s policies in maintaining social and political stability.

PART II

OBJECTIVES, TASKS AND SOLUTIONS FOR SOCIO-ECONOMIC DEVELOPMENT IN 2014-2015

The world situation continues to witness complicated and unpredictable developments. Competition among major nations in Asia – Pacific and sovereignty disputes in the sea and island areas have been fierce. The world economy recovered slowly and still witnessed difficulties. International economic integration, particularly in the region, continued to undergo profound changes towards more cooperation and competition through various Free Trade Agreements. The formation of the ASEAN Community in 2015, the Trans-Pacific Partnership (TPP), the Free Trade Agreements with the EU and other major partners will open up new favourable conditions and new development opportunities yet challenges and difficulties for our country.

Domestically, the political and social situations are stable. There have been some active progresses going on in the right direction. The leadership, management experience have step by step been improved. However, there are various difficulties, shortcomings, limitations and weaknesses as mentioned above, particularly the weak competitiveness of the economy. The demands for resources to implement the three strategic breakthroughs, and restructure the economy and ensure social security and national defence and security are vast while the budget is limited. We have to reserve our efforts to cope with ever more severe natural disasters.

1.     The overall objectives

Continue to maintain macro-economic stability, control inflation, recover growth and improve competitiveness efficiency; accelerate the implementation of the three strategic breakthroughs, promote economic restructuring together with renewing the growth model. Improve social security and people’s life. Protect the natural resources and the environment and take measures to better respond to climate change. Accelerate the public administrative reform, combat corruption, wastefulness, improve the business climate. Ensure national defence and political security, social order and safety. Improve the efficiency of the external affairs and international integration.

In 2014, focus on maintaining macro-economic stability, controlling inflation while taking advantage of the opportunities, and removing business barriers and striving to reach the higher growth rate compared to 2013.

2.     Major objectives for 2014-2015

Strive to attain the average growth rate of 6% per year; GDP per capita reaching US$ 2,200-2,300 by 2015; CPI increasing 7% per year; exports growing by 10% per year; the total investment accounting for 31% - 32% of the GDP; creating jobs for 3 – 3.2 million people; reducing urban unemployment down to below 4%; trained workers reaching 55% by 2015; the poor household decreasing 1.5-2% per year on average, and 4% exclusively for poor districts; the forest coverage reaching 42% by 2015.

3.     Major targets for 2014

In the economic areas: the economic growth stands about 5.8%. CPI increases by nearly 7%, exports grow by 10%. Trade deficit stands at approximately 6%. Total investment accounts for approximately 30% of the GDP. Budget deficit stands at 5.3% of the GDP.

In the social areas: Poor households reduce by 1.7-2%, particularly by 4% in poor districts. Create jobs for 1.6 million people; reduce urban unemployment rate to below 4%. Increase trained workers rate to 52%. Reduce the under 5 malnutrition to below 15.5%. Attain 22.5 hospital beds per 10,000 peoples (excluding beds in commune clinics). 

On environment: The rate of facilities seriously polluting the environment being handled reaches 85%. The rate of industrial parks and processing facilities having waste water treatment systems meeting the environmental standards reaches 80%. Forest coverage reaches 41.5%. The rate of rural population using clean water reaches 84%. The rate of urban population using clean water reaches 80%. The rate of solid waste collected in urban areas reaches 84.5%.

4. Major tasks and solutions

1) Enhance macro-economic stability, control inflation

Consistently implement the goal of maintaining macroeconomic stability, controlling inflation. Continue to implement flexible monetary policies and tightened fiscal policies. Regulate the interest rate in accordance with the objective of controlling inflation. Increase credit balance and ensure the credit quality. Effectively manage the foreign exchange rate and market, gold market, secure the value of the Viet Nam Dong. Strengthen export, control import. Increase foreign exchange reserve. Enhance the capital market development, stock market.

Enhance the State budget management, combat tax revenue loss, practice thrift, and cut down unnecessary expenses. The National Assembly is requested to consider accepting the State overspending rate in 2013-2014 of 5.3% of the GDP, and this rate will be reduced gradually from 2015. Reserve the budget overspending for development investment and debt repayment. Ensure that the total investment capital from the State budget and Government’s bonds in 2014 are not less than those of 2013 in order to promote economic restructuring, implement three strategic breakthroughs and restore growth. Issue additional Government’s bonds within the acceptable public debt ceiling (65% of GDP). Closely control public debt, government debt, external debt, make sure that they are at safe limit. Use dividends, which have not been transferred to the STATE CAPITAL INVESTMENT CORPORATION (SCIC), from enterprises where the State holds equity to supplement infrastructure finance in the 2 years of 2013-2014.

Continue to implement the market price mechanism for the necessary public commodities and utilities such as electricity, coal, gasoline, water, healthcare services, etc. in accordance with the relevant roadmap, ensure the requirements for inflation control, ensure transparency and provide support for policy beneficiaries  and the poor people. Enhance the regulation of the markets and prices.

2) Focus on removing business barriers, ensuring reasonable growth

Increase aggregate demand and support the development of the domestic market. Continue to implement the campaign “Vietnamese people use Vietnamese products”. Comprehensively implement measures and effectively explore the opportunities, preferences in international commitments to expand the export market.

Limit the arising and accelerate the settlement of bad debt in accordance with the approved Scheme; promote the responsibilities of credit organizations and bring into full play the role of The Vietnam Asset Management Company (VAMC). Preserve credit capitals to agriculture, rural areas, the production of export products, SMEs, supporting industries, high-technology areas. Regulate lending interest and facilitate the access of businesses to finance.

Simplify the administrative procedures, particularly in terms of tax, customs, land, and establishment and dissolution of enterprises, create favourable conditions and reduce costs for business and production. Perfect the supporting mechanisms and policies to strengthen SMEs. Effectively implement the social housing support and solutions to remove difficulties for the real estate market.

Implement measures aimed at supporting business and production in accordance with the nature of each profession, i