DIRECTIVE

ON DRAWING UP THE PLAN FOR SOCIO-ECONOMIC DEVELOPMENT AND DRAFTING THE 2001 STATE BUDGET

The socio-economic situation in the first six months of 2000 has shown positive changes.
To develop the results already achieved and overcome the limitations and weaknesses with a view to successfully completing the tasks of the plan for socio-economic development in 2000, the Prime Minister requires that the heads of the ministries, branches and localities concentrate efforts on carrying out well the measures of socio-economic development already charted out in the Resolutions of the regular sessions of the Government in 2000. At the same time, it is necessary to draw up the 2001 plan with the following main requirements and contents:

I. GUIDING IDEA AND MAIN TASKS OF THE 2001 PLAN FOR SOCIO- ECONOMIC DEVELOPMENT

The drawing up and successful implementation of the 2001 plan shall be a favorable first step to achieve the targets of the 5-year plan of 2001-2005 and the 10-year socio-economic development strategy in 2001-2010. The Prime Minister requires that the ministries, branches and localities thoroughly understand the orientation and tasks of the 5-year plan 2001-2005 of the entire country, and reflect them concretely and practically in the 2001 plan of every branch and locality. It is necessary to concentrate efforts on carrying out well the following main tasks:

1. To strive to achieve an economic growth rate higher than in 2000, to ensure that the economy develops in a stable and sustainable manner so as to create conditions for achieving higher targets of development in the subsequent years.

a/ To strongly restructure agricultural production and the rural economy. To take measures to support production and consumption of a number of important agricultural products. To raise the efficiency of agricultural production, to encourage the wide application of scientific and technical advances to agricultural production, concentrate investment on the process of breeding, especially in aquaculture, post-harvest technology, processing technology and craft villages in the countryside. To take the initiative in coping with the adverse effects of the changing weather.

b/ To maintain industrial development at a high tempo, on the basis of the continued intensive investment and renewal of equipment and technology, to give priority to investing in the development of those industrial products having consumption outlets and exportable, and the processing industries in service of agriculture. To attach importance to developing the forms of medium-sized and small-sized enterprises which can draw a large amount of labor forces; to actively seek for and expand the markets for goods in order to promote the development of production. To accelerate the equitization of the State enterprises, while creating all conditions for the equitized enterprises to embark on stable production.

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2. To raise the efficiency of economic relations with other countries; to create favorable conditions to draw foreign direct investment, attract ODA funds; to maintain a high growth rate in export, limit trade deficit, to expand the export market, especially for those products for which our country has great potentials but which are meeting with difficulties in consumption.

3. To make effective use of the national finance. To continue restructuring the State budget in order to help making the financial and monetary system healthier; thoroughly practice thrift along with raising the efficiency of the use of State capital and properties. To strengthen and heighten the quality of the operations of the banking system.

To mobilize to the maximum the various sources of capital in the country, to rapidly raise the capacity of disbursement and of attracting foreign capital in order to secure the source of concentrated investment in efficacious projects which impact on many economic branches and which have a high export rate; the State budget shall support those regions which still meet with difficulties and devote a sizable part to the education and training, environmental science, culture and public welfare.

4. To continue to renovate and develop the education and training, to develop the job-training system. To deploy the implementation of the program on universalization of junior secondary education, first of all in the areas with conditions. To promote scientific and technological activities, to rapidly apply the results of research to production. To strengthen the protection and improvement of the environment.

5. To promptly solve urgent social questions, first of all jobs for laboring people. To continue carrying out well the program of hunger eradication and poverty alleviation, to raise gradually the living standard of different strata of the population. To effect a synchronous system of mechanisms and policies in order to develop and raise the quality of cultural and social activities, activities in education and public health, and to organize the good socialization in these domains.

6. To strengthen national defense and security, combining national defense and security with socio-economic development.

7. To step up the administrative reforms, restructuring and renovation of the State apparatus at various branches and levels.

II. TASKS OF STATE BUDGET IN 2001

1. Draft State budget revenues shall be determined on the basis of accurate and full accounting of all the revenues as prescribed by the tax laws and the current collection regime, to carry out measures to improve the management of revenues, to increase the fight against under-collection, smuggling and trade fraud; to carry out fully the mechanisms already promulgated on encouraging production and business, increasing exports and expanding the market; to take into account the process of economic integration in the region and in the world. Draft revenues must be positive and firm; to strive for a mobilization of State budget revenues in 2001 at 18-19% of GDP.

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State budget capital shall be spent mostly on investment in infrastructural works without profitability and without possibility of capital recovery, with priority given to key constructions of the State and those works which shall be put into operation within the year and the works which have filled in all procedures for construction.

Expenditures in support of production and business shall be concentrated on the following domains: production of key products and in key branches; raising the quality of products, especially agricultural products for export; improving and propagating plant varieties and animal breeds, restructuring the crops and livestock; reforming and rearranging State enterprises; supporting export activities, expanding the markets and search for new outlets, and supplying market information.

The State budget shall prioritize the subsidies for price hikes and the wage reform for the salaried persons, allowances for persons with meritorious services to the revolution, and social welfare covered by the State budget; to carry out the program on hunger eradication and poverty alleviation; to ensure the programs on education and training, sciences, environment and technology according to the resolution of the Second Plenum of the Party Central Committee, and the programs on culture and information according to the Resolution of the Fifth Plenum of the Party Central Committee, to carry out the national defense and security task. To step up the socialization of education, public health, culture and physical training and sports in order to mobilize more social forces and reduce the pressure on State budget expenditures for these domains, contributing to changing the spending structure of the State budget.

To effect the new mechanism of financial-budgetary management in a number of non-business units having revenues; to change a number of administrative and public-service units eligible for the self-financing mechanism. The expenditures on scientific research, public health and training activities of the State enterprises shall be accounted for in the expenditures for production and business according to the prescribed regime, no assistance shall be allocated from the State budget (except by specific decisions of the Prime Minister).

Reserve expenditures and supplementary expenditures for the financial reserve funds of the various budgetary levels shall comply with current prescriptions.

3. To balance the State budget by ensuring that tax and charges revenues shall meet regular expenditures at a reasonable level, payment of the due debts and make adequate accumulation for development investment.

The deficit of the State budget shall be kept at below 5% of GDP, in conformity with our capacity for domestic borrowing and preferential loans from abroad. There shall be no commercial borrowings from abroad, no issue of bank notes and limitation of short-term domestic borrowings at high interest rates to make up for the budget deficit.

4. On the drafting of local budgets:

The draft budgets of the localities shall be made on the principle of stability for three years (2000-2002), in which the supplement from the central State budget to the local budgets is planned to increase by 3% compared to the figure in 2000 (not including the targeted supplements to solve the difficulties in 2000). In assigning the budget expenditure task for 2001, it is necessary to prioritize the expenditure tasks in building the infrastructures, in the improvement of plant varieties and animal breeds, in restructuring the crops and livestock.

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Rewards for excessive revenues in 2001 shall comply with the State Budget Law.

III. TEMPO IN ELABORATING THE PLAN AND ASSIGNMENT OF IMPLEMENTATION RESPONSIBILITIES

1. On tempo

- Within July 2000, the Ministry of Planning and Investment shall guide the frame plan for 2001 for the ministries, branches and localities as basis to elaborate their plans.

- Before August 30, 2000 the ministries, branches, corporations 91, the People�s Committees of the provinces and the centrally-run cities shall report on their socio-economic development plans and their draft State budgets for 2001 to the Ministry of Planning and Investment and the Ministry of Finance for synthesization to submit to the Government.

- The Ministry of Planning and Investment and the Ministry of Finance shall discuss with the ministries, branches and localities in order to synthesize in time the plans and submit them to the leading agencies of the Party and the State, at the same time make projections for the allocation of the plan targets and budgets for submission to the Standing Committee of the National Assembly.

2. Assignment of implementation responsibilities

a/ The Ministry of Planning and Investment: shall assume the main responsibility and coordinate with the Ministry of Finance in making calculations and elaborating the plan, and major balances as guidance to the ministries, branches and localities to draw up their 2001 plans. It shall also guide the elaboration and synthesization of the plan for socio-economic development in 2001; assume the main responsibility and coordinate with the Ministry of Finance in drafting the plan for development investment and allocation of investments in capital construction; assume the main responsibility and together with the Ministry of Finance, related ministries and localities evaluate the results in implementing the target programs in the period 1996-2000; to make suggestions on the tasks of the target programs in the period 2001-2005 and the previous target programs which have been integrated into the regular spending tasks of the ministries, central agencies, provinces and centrally-run cities, for submission to the Prime Minister for decision in August, 2000.

b/ The Ministry of Finance shall guide other ministries, central agencies and the localities in evaluating the situation in carrying out the draft State budget for 2000; build the budget draft and announce the control figures on the draft State budget revenues and expenditures in 2001 to the ministries, central agencies and localities, determine the rate of distribution of revenues and supplements to the budgets in the provinces and cities for submission to the competent authority for decision; to assume the main responsibility and coordinate with the Ministry of Planning and Investment and related agencies in building and integrating the draft State budgets for 2001; to discuss with the other ministries, the central agencies and the localities on the draft budgets, to coordinate with the related ministries to submit to the Prime Minister for decision on what public-service units with revenues to be allowed to apply the new financial management mechanism in the three years 2001-2003; and what administrative and public-service units to carry out the mode of self coverage of expenditures, including wages.

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The Ministries and State agencies shall, depending on their functions and on the basis of calculating the exploitable resources, draw up their socio-economic targets, suggest solutions and new policy mechanisms and regimes or propose amendments and supplements to the current regimes and policies as basis to build the plan and draft budget and notify them to the Ministry of Planning and Investment, the Ministry of Finance and related ministries and agencies before the time of formulating their draft budgets.

d/ The People�s Committees of the provinces and centrally-run cities shall guide, organize and direct the provincial/municipal Planning and Investment Services and the Finance and Pricing Services to closely coordinate with the other services, sectors and branches in building the plans for socio-economic development and the draft State budgets for submission to the competent authorities for decision.

FOR THE PRIME MINISTER
DEPUTY PRIME MINISTER




Nguyen Tan Dung