RESOLUTION

ON MEASURES OF RESTRAINING INFLATION, STABILIZING MACRO ECONOMY AND ENSURING SOCIAL SECURITY AND SUSTAINABLE GROWTH

The world economy is undergoing complicated and unforeseeable changes. The prices of oil, foodstuff, food and most basic materials have sharply risen on the world market.

The United States’ economic decline has largely affected and resulted in the recession of many economies. Domestically, the historic prolonged cold snap in the northern and northern central regions has caused great material damage and exerted adverse impacts on agricultural production and people’s life. Severe consequences of natural disasters, epidemics and unfavorable global economic changes have caused negative impacts on the growth and price level of Vietnam’s economy which is still not highly competitive and in the early stage of the market mechanism in the process of deep and wide integration into the world economy.

Coping with this situation, the Government has agreed that the country’s central tasks at present are to restrain inflation, maintain macroeconomic stability and ensure social security and sustainable growth, of which inflation restraint is the top priority target. In order to fulfill the above tasks and targets, on the one hand, to step up the implementation of the Government’s Resolution No. 02/2008/NQ-CP dated January 9, 2008, on socio-economic administration in 2008, and on the other hand, to concentrate on directing the drastic and coordinated implementation of the following major solutions:

I. ADOPTING TIGHT MONETARY POLICIES

1. The State Bank of Vietnam must be proactive and flexible in using monetary policy instruments according to market principles, tightly control total payment instruments and credit debt balance, but ensure the liquidity of the economy and the operation of banks and credit institutions.

To flexibly use monetary policy instruments in order to gradually lower deposit interests toward a positive actual interest policy. To increase tight control and supervision of commercial banks' operation to ensure their observance of regulations on capital raising, lending and credit quality. To promptly detect and handle violations according to law to reduce risks in banking operations.

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II. TIGHTLY CONTROLLING AND RAISING THE EFFICIENCY OF PUBLIC SPENDING

1. To administer fiscal policies toward saving regular spending and raising the efficiency of state-invested capital; to tightly control investment of state enterprises, especially investment in projects in domains which are not their principal production or business lines; to strive for reducing the state budget deficit.

2. To reduce and rearrange the 2008 plan's capital construction investment from the state budget, government bonds, state investment credit and state enterprises' investment, firstly inefficiently invested or non-urgent works. The Ministry of Planning and Investment and the Ministry of Finance shall assume the prime responsibility for immediately implementing this content concerning the review and balancing of state budget capital sources. Ministers, presidents of provincial/municipal People’s committees, general directors and management board chairmen of state economic groups and corporations, shall, within their assigned functions and tasks, closely review investment items in order to cancel inefficiently invested works and concentrate capital on to-be-completed-soon works and commodity production investment works of all economic sectors for faster implementation and early operation.

3. Concerned ministries, especially the Ministry of Planning and Investment, the Ministry of Construction and the Ministry of Finance, shall promptly complete documents on construction investment and timely promulgate documents guiding the settlement of arising problems to speed up the disbursement of funds for works in order to put them into effective operation.

4. The Ministry of Planning and Investment shall assume the prime responsibility for considering switching a number of state budget-invested works to BOT (build-operate-transfer) investment with domestic and overseas capital, or selling, transferring capital-recoverable works to enterprises or individuals for exploitation or continued investment to raise their investment efficiency.

5. The Ministry of Finance shall assume the prime responsibility for reviewing and proposing measures to redress investment activities of state enterprises, economic groups and major corporations. To conduct preliminary review of the economic group model under the Resolution of the third plenum of the Party Central Committee, the IX^th congress. The Ministry of Planning and Investment shall coordinate with the Ministry of Finance in making preparations for the implementation of these measures in the fourth quarter of 2008.

6. To implement thrift practice policies in a coordinated, tight and strict manner at all levels, branches and the entire political system. To incorporate the content of practicing thrift in budget spending, production and life into the campaign on "Studying and following the moral example of President Ho Chi Minh" in 2008 and the following years. In 2008, apart from saving an average 10% of administrative expenses (except for wages, wage allowances and expenses for personnel according to regulations) of state budget-funded agencies, to cut spending on non-essential procurements, reduce to the utmost the number of national conferences, reduce travel expenses (especially travel by air); cut expenses for reception, impractical overseas business trips funded by originated from the state budget; to further save power and supplies. To reduce expenses for costly and wasteful festive activities, anniversaries and events on conferring medals or emulation titles. The Ministry of Finance shall assume the prime responsibility for allocating norms to, and guiding and organizing implementation contents for, units.

7. To strive for higher-than-planned state budget revenues in 2008. To increase reserves for spending on social security and handling of natural

disaster consequences, to further lower the 2008 state budget deficit percentage set by the National Assembly.

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1. The Ministry of Agriculture and Rural Development shall:

a/ Assume the prime responsibility for, and coordinate with localities in, handling consequences of natural disasters and epidemics to boost agricultural production, directing the development of subsidiary crops and animal raising in order to increase food supply sources, stabilize foodstuff and food prices, and prepare sufficient seeds for the summer-autumn and winter crops;

b/ Assume the prime responsibility for, and coordinate with functional agencies and local administrations of all levels in, early detecting, proactively implementing and guiding the implementation of, measures to actively, completely and effectively prevent, fight, stop and eliminate the avian influenza, blue-ear disease of pigs, foot-and-mouth disease of cattle and the type-A influenza (H5N1) in humans;

c/ Direct the improvement of reservoirs, dikes and irrigation works in order to proactively cope with natural disasters in the upcoming flood season and ensure safety for production and life.

2. The Ministers of planning and Investment; Industry and Trade; Natural and Trade; Natural Resources and Environment; and Agriculture and Rural Development, the State Bank of Vietnam Governor, and presidents of provincial/municipal People’s Committees shall drastically direct the prompt settlement of administrative procedure-related problems for faster access to and use of capital and land and market expansion in order to boost production development. Simultaneously to proactively lake appropriate measures to handle price fluctuation-related problems that affect enterprises' production and business activities, firstly prices used in the cost estimates of ongoing state-funded works to ensure their early completion and operation.

3. The Ministry of Planning and Investment shall assume the prime responsibility for scrutinizing and annulling irrelevant regulations that hinder investment and business activities in order to facilitate the development of economic sectors.

4. The Ministry of Industry and Trade shall work with concerned ministries, trade associations and enterprises to ensure commodity supply; and together government, shall control prices of essential goods such as foodstuff, medicine, petrol, gasoline, iron, steel, cement and fertilizer. To proactively propose and implement schemes to handle the power shortage and implement schemes to handle the power shortage and ensure sufficient power supply for production.

IV. BOOSTING EXPORTS, TIGHTLY CONTROLLING IMPORTS AND REDUCING TRADE DEFICIT

1. The Ministry of Industry and Trade shall assume the prime responsibility for:

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b/ Supporting trade promotion for exported goods; boosting promotion activities in traditional markets and seeking new markets to increase exports;

c/ Increasing solutions to encourage domestic production for import substitute, strongly promoting service and tourist activities;

d/ And coordinate with the Ministry of Agriculture and Rural Development in proposing mechanisms and policies to ensure foodstuff and food supply on the domestic market and food security and restrain sharp rises in prices of this commodity group; directing and limiting 2008 rice exports at 3.5 - 4 million tons.

2. The Slate Bank of Vietnam shall assume the prime responsibility for implementing monetary and exchange rate policies in conformity with the export promotion policy. To adopt mechanisms for and direct commercial banks to buy foreign currencies for export enterprises, to promptly handle credit-related problems and meet reasonable loan demands for export.

3. The Ministry of Finance shall proactively and flexibly use taxation instruments to rationally raise export tariff on coal and crude oil. To rationally raise import and special consumption taxes on a number of non-essential consumer goods such as automobiles, parts of under-12-seat automobiles, some electronic refrigeration goods, two-wheel motor vehicles and their parts, liquor and beer in order to reduce trade deficit while ensuring compliance with international integration commitments; to propose adjustments to tax mechanisms and policies and impose technical barriers and other necessary measures to restrict goods items the import of which is not encouraged in accordance with international commitments.

V. DRASTICALLY PRACTICING THRIFT IN PRODUCTION AND CONSUMPTION

Waste in production and consumption remains rampant in agencies, units and the population, the potential for saving in production and consumption remains large. Firstly, the Government shall instruct thrift practice and waste combat in state budget use. Units shall proactively use allocated funds to fulfill their tasks even in case of price increase. Not to supplement unplanned budget funds.

Enterprises shall review all expenses in order to cut production costs and circulation expenses. To intensify financial supervision of state enterprises, especially economic groups, Corporations 90 and 91, in order to promptly redress inefficient investment, investment outside principal production domains and improper investment structure of these units over the past time.

The Government calls for everybody and every family to absolutely save consumption, especially of fuel and power.

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1. The Ministry of Industry and Trade shall assume the prime responsibility for implementing solutions to ensure commodity supply-demand balance; at the same time, increasingly intensify market control to resolutely prevent the abuse of changes in goods supply and prices on the market for speculation and price hike, especially for important materials such as petrol, gasoline, power, cement, iron, steel, fertilizer, pesticide and essential consumer goods such as food and medicine. To coordinate with local administrations in directing functional agencies in intensifying measures to stop trade frauds, lax evasion and cross-border smuggling, especially smuggling of petrol, gasoline, minerals and foodstuff.

2. The Ministry of Finance shall increase supervision of the compliance of state regulations on prices and strictly handle violations.

3. Enterprises of all economic sectors shall strictly observe regulations on price management, regularly examine sale prices in their retail state networks and retail agents.

4. State corporations shall set an example meeting this requirement and be responsible before the Government for the operation of their retails sale networks and retail agents.

The Government requests trade associations to actively participate in the implementation of, and support, guidelines and solutions on price and market stabilization.

VII. INTENSIFYING SUPPORTIVE MEASURES TO STABILIZE PEOPLE’S LIFE AND PRODUCTION, EXPANDING THE IMPLEMENTATION OF SECURITY POLICIES

Based on their assigned functions and tasks, ministries, localities and concerned agencies shall increase measures to provide social security support and stabilize people's life by boosting efforts in hunger alleviation and poverty reduction and employment generation, providing support to stabilize people's life, especially of poor households, disaster-hit areas and laborers with low incomes.

1. The Ministry of Finance shall assume the prime responsibility for:

a/ And coordinate with concerned agencies in examining the implementation of the Government's policies on adjustment of minimum

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b/ Fully and effectively implementing policies to support ethnic minority people, policy beneficiary households, poor households, households living just below the poverty line and fishermen under the Prime Minister's Decision No. 289/QD-TTg dated March 18, 2008, including providing kerosene in areas having no or lacking electricity; raising scholarships for ethnic minority pupils in boarding schools; providing additional support for pupils of preschools and semi-boarding schools who come from poor households, raising health insurance levels for the poor and under-6 children; supporting interest for investment in energy-conserving machinery and insurance for equipment and humans. To continue studying policies to assure social security for submission to the Prime Minister.

c/ Reviewing and reducing fees collected from farmers;

d/ Together with the Ministry of Industry and Trade, supervising the implementation of the following contents from now to the end of June 2008: not increasing the prices of electricity, coal, petrol and gasoline yet; stabilizing the prices of cement, fertilizer, clean water, medicines, air, railway and bus fares; stabilizing the levels of school and hospital fees. At the same time, closely watching for inflation developments in order to propose appropriate subsequent measures to the Government.

2. The Ministry of Finance, the Ministry of Planning and Investment and the State Bank of Vietnam together with People's Committees of all levels shall increase low-cost capital sources for the Social Policy Bank for continued implementation of preferential credit programs for poor households and social policy beneficiaries.

3. Ministries and People's Committees of localities shall continue boosting the implementation of national target programs and other supportive solutions for difficulty- and natural disaster-hit areas. Simultaneously, to monitor and supervise price fluctuations and people's life in their localities and promptly settle pressing social problems; to increase the examination and supervision of and fully and properly implement the State's supportive policies for beneficiaries, ensuring that the State support is given to proper beneficiaries without loss and corruption.

VIII. PROMOTING COMMUNICATION AND PROPAGATION

1. The Ministry of Information and Communication shall direct communication and propagation work in order to create high consensus in all levels, branches, localities, enterprises and people of all social strata for the fulfillment of targets and solutions set to handle economic difficulties for stable development.

These tasks are heavy and challenges are tough, but opportunities, advantages and potential for Vietnam’s economic growth remain large and basic. The Government requests ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of provincial/municipal People’s Committees, based on their assigned functions and tasks, and the above tasks, targets and solutions, to adopt plans for implementation immediately in April 2008.

2. The mass media shall precisely report and support the State's guidelines and policies on this sensitive area and avoid untruthful information that is provocative or may cause public anxiety.

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ON BEHALF OF THE GOVERNMENT
PRIME MINISTER




Nguyen Tan Dung