Outcomes of socio-economic development in 2011-2013, tasks for 2014-2015
12:22 | 22/10/2013

VGP - PM Nguyen Tan Dung on Monday presented a Report on the socio-economic situation in 2013, results of the first three-year implementation of the five-year plan in 2011-2015 and the tasks for 2014-2015 at the 6th session of the 13th National Assembly.

The following is the translated version of the report:

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 11th 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 11th 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 4th 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 months 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%).

Money supply and outstanding credit 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 exchange 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. The 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. Bank 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