PM clarifies socio-economic issues at Legislature's session
11:57 | 14/11/2012

VGP – Prime Minister Nguyen Tan Dung on Wednesday morning presented an accountability report and spent time to explain more about issues raised by the NA deputies, at the 4th on-going session of the 13th National Assembly.

The following is the translation of the report



at the 4th session of the 13th National Assembly


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

National Assembly deputies,

Revolutionary veterans and guests,

Comrades and compatriots,

First of all, on behalf of the Government, I would like to thank National Assembly (NA) for basically agreeing with the Government’s reports and approved a Resolution on the socio-economic development plan for 2013.

At this session, NA deputies have sent 175 interrogation notes with 247 questions to the Prime Minister and Cabinet members, of the figures, five notes with 11 questions for the Prime Minister. The Prime Minister assigned and required Cabinet members, within their authorized competence, to provide written answers to the NA deputies. Over the past two days, Deputy Prime Minister Nguyen Xuan Phuc presented a Report on the implementation of NA’s Resolution on interpellations and answers at the 2nd and 3rd sessions with four Ministers directly providing answers and three others complementing the answers.

On behalf of the Government, I would like to explain more about some of the issues that the National Assembly and compatriots want to interrogate. They are also the tasks that the Government will focus on in the coming time.


1. At the beginning of the session, the Government reported to the National Assembly about socio-economic picture in the first nine months and forecast for the whole year. In October and first half of November, socio-economic situation continued to record positive changes. October’s consumer price index increased by 0.85%, much lower than that of September­­, the index rose 6.02% in the first ten months. Budget collection reached 76.2% and expenditure touched 78.8% in the reviewed period. Export climbed 18.4% in ten months; import went up 6.8%. Payment balance continued to improve, exchange rate was stable, foreign reserve increased. Industrial production index rose 5.8% in ten months (compared to 4.6% in September); it is estimated that the total value of agriculture-forestry and aquaculture production may reach 3.9% for the whole year, rice export is estimated at 7.5 million tons, the highest figure so far. Total retail sales of goods and services went up 17.1% (6.8% if price factors are excluded). International arrivals reached 5.35 million and it is estimated that the figure will increase to 6.5 million this year, or up 8.1%. Nearly 1.2 million jobs were created, or 80% of the whole-year plan. More progress was recorded in cultural and social areas; national defense, security, social order and safety continued to be ensured, diplomatic work continued to get positive outcomes.

The above achievements will create favorable conditions for us to strive for the fulfillment of the objectives and targets that the Government had reported to the National Assembly at its opening session.

Obviously, in the context of global and domestic challenges, our country has to cope with numerous challenges. Global economy still contains risks. The recent meeting of developed and emerging economies (G-20) issued negative evaluation of the global economic outlook in 2013 and said that recent growth-stimulus measures are not enough for the global economy to quickly get out of recession. Public debt is still the menace for growth, not just in the European Union but also in Japan and the US, which may further push the global economy into more difficult plight.

Domestically, macro-economic stability and inflation curbing are still not stable, production faces numerous difficulties, total demand falls, inventories and non-performing loans are high. If they are not effectively settled, the economy may become sluggish, adversely impacting employment and people’s life. Many problems in the fields of culture, society, national defense and security, foreign affairs need more attention and investments. The tropical storm Son-Tinh caused severe damages to some of Northern coastal localities.

2. The above plight requires us to promote advantages and achievements, to be consistent with measures which have proved effective while closely monitoring the realities, take drastic and quick actions to timely address emerging difficulties and challenges, and strive to successfully realize the targets for 2013 and prepare well for the implementation of tasks for 2013, focusing on stabilizing macro-economy, removing difficulties, speeding up production and business, strictly-effectively-thriftily managing budget collection and expenditure, ceasing expenditure items which are not urgent, reducing visits to foreign countries and meetings, saving up time for direction and inspection of task deployment, enhancing market and price management, proactively balancing supply-demand to ensure the availability of key goods and during the Lunar New Year holiday, avoiding unwanted market and price changes, fruitfully carrying out social welfare programs; quickly providing assistance to flood-hit areas to overcome the consequences and restore production, stabilize their life, well preparing for every citizen, particularly poor households, policy beneficiaries and people in flood-hit areas to enjoy a healthy, safe and thrift Lunar New Year holiday.  


The Government will drastically implement tasks and solutions mentioned in the National Assembly’s Resolution on the Socio-economic Development Plan 2013. It is necessary to insist on solutions to enhance macro-economic stability and rein in inflation; create breakthroughs in lifting difficulties for enterprises, promoting business and production activities, generating more jobs and securing growth. The Government will direct the compilation of specific and practical action plans and programs; tighten discipline and heighten leaders’ responsibility in realizing these plans and programs. It is essential to actively carry out information and communication work, so as to form consensus and determination in fulfilling all tasks in 2013. In this spirit, the Government shall center of the following tasks:


High inventories and bad debts in the context of the falling total demand are tight knots in the economy. Many NA deputies have shown their concern about the situation. The Government is fully aware of this. The Government’s 13th Resolution in 2012 has brought about some positive effects but still insufficient. Therefore, it is necessary to take stronger solutions in terms of mechanisms, policies and resources with the view that the total resources should be distributed properly in specific phases of investment in order to help the economy overcome its inactivity and get out of all difficulties. The Government shall focus on the following solutions:

1. Clearing inventories

(1) Rapidly increasing the economy’s total demand. Credits for production and consumption will be expanded, the economy’s outstanding loans increased. While speeding up the disbursement of projects listed in the investment plan 2012, it is necessary to distribute capital and accelerate the schedule of projects in the plan 2013, especially those with high influence, those on rural development, social housing, and dormitories for students. Cements and steel will be provided to repairing, upgrading and building transport and irrigation works in rural areas and houses for poor families, while mobilizing contributions from local residents. The support from the budget will be based on specific conditions of each locality. This solution has been carried out effectively in many localities and should be popularized.

The National Assembly’s Resolution on State budget estimates for 2013 will be put into reality, in which the benchmark salary will be raised from VND 1.05 million to VND 1.15 million and the retirement pension and allowances for those having great contributions to the country will be raised equivalent to the benchmark salary since July 1, 2013 on. However, it is essential to take all measures to balance the resources so as to be able to further improve salaries in line with the set roadmap, prioritizing beneficiaries of social policies and low-income people in order to reduce their difficulties, improve their livelihood and promote consumption.

(2) Assisting businesses to expand markets. Different solutions should be conducted in uniform to expand domestic and export markets. The Government will assist enterprises to sell their goods, pay due attention to the selling of domestically-made products right in domestic markets, especially rurla areas. To guarantee the program’s efficiency, it is necessary to set up criteria for receiving assistance on the basis of results. Enterprises are encouraged to cooperate together in selling domestically-made products.

The cross-border trade must be strictly controlled. Competent forces must try best to prevent all forms of smuggling, especially from now to the Lunar New Year Festival. The import, production and trading in goods which can harm health and environment or can spread epidemics will be strictly punished. All localities, organizations and individuals who tolerate or screen smuggling and relax the control over cross-border trading activities will be chastised.

(3) Reducing business and production costs, helping businesses to lower cost prices and sell out their products.

Interest rates will be further reduced in conformity with the decrease of inflation. Favorable conditions will be created for enterprises to access credits. A new mechanism on credit guarantee will be established for small and medium enterprises. Debt re-schedule and guarantee will be applied for successful enterprises which are facing some momentary difficulties. While regulations on the ceiling interest rates are still valid, it is necessary to continue applying the ceiling interest rate of lending to some prioritized products and regions. Credit limits will be raised for agriculture, rural areas and farmer households. Mass organizations in rural areas should be encouraged to play a key role in guaranteeing loans and collecting debts.

It is necessary to maintain sources of income in order to raise revenues later. Measures on tax and fees as well as packages of aid should be applied right in the first half of the year, with larger scale and longer duration, in order to lighten enterprises’ burdens.

Simplification of administrative procedures (customs, taxation, land, credits, investment, business registration) should be sped up to save time and costs for enterprises and people. The best examples of management in different fields should be institutionalized as standards which will be applied for the entire industry and the whole country under the public supervision.

All the above-mentioned packages of solutions require financial sources, thus it is important to further prevent the loss of revenue and observe absolute thrift practice. The Government will introduce more strict regulation on curbing budget spendings in 2013.

2. Clearing bad debts

In the second half of 2011, bad debts in credit organizations tended to rapidly increase. According to inspections by the State Bank, bad debts accounted for 8.82% of the economy’s total credit at the moment of inspection, equivalent to VND 250 trillion, of which 73% was guaranteed and credit organization deducted about VND 75 trillion for risk reserve funds.

Bad debts are blocking credit flows to enterprises and become a danger for the stability of the banking system and financial markets. The clearance of bad debts is an urgent task which must be promptly and drastically conducted with a proper roadmap and a strict process, requiring the concentrated direction, multi-channels of action, and various measures, including clearing inventories and supporting enterprises’ production and business activities. Apart from the solutions to support enterprises as mentioned, the Government has been directing the realization of the following solutions:

(1) To review and re-assess accurately the total bad debt; to classify bad debts in line with different forms of enterprises, credit organizations and guarantees (bad debts in real properties and in capital construction);

(2) Credit organizations are required to actively restructure their debts in proper forms, allocate sufficiently money to set up risk reserve funds and use these funds to clear bad debts. The organizations who cannot acquire sufficient allocation must mobilize other suitable sources, including their charter capital, and must reduce their growth rate of credit in order to secure safety;

(3) Credit organizations (creditors) and enterprises bearing debts are requested to promptly deal with guarantees in order to clear bad debts.

Experience from the international community prove that, though various measures are needed, the State must play a decisive role in settling bad debts. The Government has asked the State Bank to work with the Ministry of Finance to design a scenario for establishing the debt trading company, issue legal documents as the foundation for clearing bad debts, clearly define the company’s operations in conformity with Viet Nam’s specific conditions and international practices.

One of issues to be dealt with is State budget debts in capital construction. Currently the total sum of these debts is around VND 90 trillion, in which debts in completed projects are around VND 20 trillion and interim projects, nearly VND 70 trillion. Most of debts in capital construction exist at local levels as a result of decentralization of investment. Accordingly, many projects were decided and approved by local authorities while the central government was responsible for capital sources. In fact, local authorities wanted to speed up infrastructure construction for developing production and improving people’s livelihood. Enterprises taking part in projects have been very active in advancing capital for the construction in spite of limited corresponding capital. This is a mechanism and policy gap which both central and local authorities must be responsible for. The Government has required local governments to set up specific scenarios for promptly dealing with debts in capital construction relating to the projects decided by them. The Government has also assigned the Ministry of Planning and Investment to sum up and submit to the Prime Minister the general scenario for clearing debts in capital construction nationwide.

Those synchronized measures all aim to bring bad debts down to 3-4% in late 2015.

3. Removing obstacles for real estate market

The real estate market, particularly housing, is a special inventory, which has direct relation to and accounts for a huge proportion of the total bad debt. Due to weak management, lack of proper planning, the housing market has experienced hot development with improper structure and speculation causing abundant supply, particularly high-quality segment that the majority of people can not afford. In the context of tight monetary and fiscal policies, the total demand fell, making the real estate market freeze, leading to huge inventories of construction materials. Besides measures to increase the total demand, including housing and construction materials, the Prime Minister assigned a Deputy Prime Minister to direct the Ministry of Construction, the State Bank of Viet Nam, the Ministry of Natural Resources and Environment, and the Ministry of Finance, etc to coordinate with localities to evaluate the real status  of and design specific measures to remove obstacles for the real estate market, while implementing the following solutions:

 (1) Expand house purchase loans, encourage credit organizations to cooperate with investors of projects to provide long-term loans to people who have demand for housing. People’s Committees of provinces and centrally-governed cities seeks proper capital sources to re-purchase resettlement blocks, social housing and hostels, etc. Some localities like Ho Chi Minh City has introduced this solution and gained initial positive results.

 (2) Review projects in order to identify which ones will be cancelled or continue, or adjusted; require investors to strictly follow. Apartments are allowed to be divided into smaller ones in accordance with planning; encourage the lowering of prices so that more people can afford to buy.

 (3) Accelerate attraction of foreign direct investment in order to increase the demand for offices and houses for lease; study the amendments to policies of selling houses to foreigners who have long-term investment projects in Viet Nam.

 (4) Enhance State management over the real estate market. Review planning schemes and plans for housing development in accordance with the specific conditions and socio-economic development strategy of each localities. Effectively deploying the approved housing strategy, speeding up social housing development.

The Government will continue to propose amendments to perfect the legal system for urban management and real estate business. Design new financial institutions like Housing Fund, Real Estate Investment Fund, etc to support the market. Perfect tax policies to reduce speculation and encourage thrift use of land.

Dealing with inventories, bad debts and removing difficulties for the real estate market have close relations, thus they require synchronous measures. The Government considers it a key tasks in the time to come.


The issue drew much attention from many NA deputies, who laid stress on the giving of priority to curbing inflation, stabilizing the macro-economy and combining economic restructuring with implementation of three strategic breakthroughs. After listening to these comments, the Government provided additional explanations to make the issue clearer as follow:

The Government had already composed an overall project on economic restructuring in combination with growth model renovation with a view to improving the quality, effectiveness and competitiveness of the economy. The project will be implemented synchronously in all industries and sectors and throughout the country.

Since the beginning of 2012, the Government has focused on restructuring the three fields, including investment, especially public investment; State owned enterprises, focusing on economic groups and general corporations; and credit organizations.

1. Investment restructuring

The Government and relevant agencies have recently deployed a number of measures, which have brought in initial outcomes. The Government will continue instructing concerned ministries and agencies to perfect the legal system on investment and propose the National Assembly to amend the State Budget Law and issue the Law on Public Investment. The Government will implement the Conclusions of the Third Plenum of the Party Central Committee (11 tenure) and the PM’s Directive on strengthening management of investment sourced from the State budget and government bonds and closely monitor the investments of SOEs. Public investment structure will be adjusted gradually towards decreasing density and raising effectiveness in a resolute bid to put an end to investment scattering. Mechanisms will be perfected to ensure that investors, contractors and consultancy supervisors will take on higher responsibilities for guaranteeing the quality and construction tempo of projects and tough punishments will be imposed on infringements. The mechanism on investment allocation will be renovated to ensure investments will be balanced in the medium-term plan; investment capital will be intensely concentrated on projects which are important, urgent, and near completion in a bid to put them into effective use as soon as possible. Capital allocation will be prioritized for projects which have completed and must be finished by 2013 and for use as responding capital in ODA projects. Newly-deployed projects must be put under close supervision to ensure investment procedures and investment sources are adequately clarified. Projects funded by the State budget or government bonds facing a lack of investment will have their investment formula averted or temporarily suspended.

The mechanism on decentralized management of investments, firstly those from the State budget and Government bonds, will be unceasingly improved to guarantee the unified management of the central government on goals and portfolio of programs and projects in line with the planning. The quality of planning work will be bettered to provide a foundation for the shaping of medium and long-term investment plans and programs.

The capital demand for socio-economic infrastructure construction is expected to boom in the coming years in the context of limited State budget and declining ODA when Viet Nam becomes a medium-income country. Hence, besides restructuring and raising the effectiveness of public investment, it is necessary to adopt measures to lure more investments from the non-state sector. Efforts are made to further raise the efficiency of ODA use to serve the mobilization of more funds. Investment mechanisms in forms of BT, BOT and PPP and policies on fees, taxes and site clearance will be amended and the attraction of FDI over the past 25 years will be reviewed in order to offer more attractive policies and mechanisms to lure more non-state investments in building infrastructure, improving productivity and accelerating economic structure transformation.   

2. Restructuring State-owned enterprises 

In July 2012, the Prime Minister ratified the Project on restructuring State-owned enterprises (SOEs), focusing on economic groups and corporations. To seriously realize the Conclusion of the 6th plenary session of the 11th Communist Party of Viet Nam Central Committee (CPVCC) on arranging, renovating and improving the effectiveness of SOEs, the Government is now:

Reviewing and classifying enterprises to decide the proportion of State capital; adjusting the SOEs structure, concentrating on crucial industries, sectors and areas.

Re-arranging and equitizing enterprises based on approved plans; pursuing a roadmap to withdraw State capital from joint-stock companies that the State should not control.

Re-organizing SOEs in a more suitable model; applying advanced administration; implementing transparancy in SOEs’ activities based on criteria of listed companies, placing SOEs in a fair competitive environment with enterprises of other economic sectors, implementing State’s ordering mechanism and market-based accounting for businesses in performing functions of macro-regulation and social welfare.

Besides ending pilot establishment of economic groups, the Government is directing to check and evaluate groups and ask them to withdraw capital from non-core business lines, and approve restructuring plan of each economic group or corporation.

While thoroughly researching into the establishment of an agency which is responsible for united ownership of SOEs, the Government is quickly finalizing a new Decree on allocating and assigning rights, responsibilities and obligations of the owners of SOEs and State capital in enterprises. The Decree will clearly stipulate specific rights, responsibilities and obligations of the Government, the Prime Minister, ministries, provincial People’s Committees, Members’ Councils and representatives of State capital.

The Government will promulgate a separate decree on operation and organization of each economic group and corporation, review the implementation of the 2005 Law on Enterprises and establish a proper legal framework to manage SOEs effectively. 

The Government will strengthen Party building work and Party leadership in businesses; renovate recruitment process, clearly identify rights and responsibilities of organizations and individuals in relation to the selection of key leaders in SOEs. 

3. Restructuring credit organizations

The Prime Minister approved a Project on restructuring credit organization system with specific roadmap to achieve the goal of formulating a system of credit organizations which are diversified in terms of ownership, scale and type; operate safely, effectively, competitively and on the basis of market rules and international practices and standards. Between 2011 and 2015, the Government will focus on cleaning up financial status, enhancing capacity and improving credit organizations’ safety and effectiveness. 

Introducing synchronous restructuring solutions to each credit organization model (State commercial banks, joint stock commercial banks, financial companies, financial leasing companies, people’s credit funds and foreign credit organizations). The solutions will be suitable with the financial status of each credit organization (healthy, temporary lack of liquidity and poor).

Having supervised activities, comprehensively inspected and compulsorily audited nine weak joint stock commercial banks, asking each of them to establish and launch restructuring plan in accordance with legal regulations and with specific roadmap. Until now, six banks have been re-arranged and their operations have been stabilized; rights of depositors are guaranteed; the State doest not provide money to these credit organizations.

The Government will direct the completion of management criteria for credit organizations towards international standards, strengthen supervision and inspection of activities of credit organizations, strictly deal with activities infringing the law and guarantee the safety of the system.

NA deputies,

At this session, NA deputies and voters have raised a number of questions in relation to social issues on poverty reduction, job creation, education and training, healthcare, environmental protection, settlement of complaints and denunciations, anti-corruption, anti-wastefulness, thrift practice and social order and safety, which still remain limited. In the near future, the Government will do its utmost to synchronously and effectively carry out development strategies, national target programs and preset plans to overcome shortcomings and make progress in each of the areas.

The forthcoming missions are huge. Welcoming comments from NA deputies, the Government will quickly deploy and strive to realize the Party and NA’s Resolutions. The Government proposes the NA strengthen supervision and each NA deputy makes practical contributions to the fulfillment of the set goals.

Thanks for your attention,

Now, I would like to answer your questions./.

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