RESOLUTION

ECONOMIC RESTRUCTURING PLAN 2016 - 2020

NATIONAL ASSEMBLY OF THE SOCIALIST REPUBLIC OF VIETNAM

Pursuant to the Constitution of the Socialist Republic of Vietnam;

In consideration of the Document No.459/TTr-CP dated by October 18, 2016 by the Government, verification report No.137/BC-UBKT14 dated October 19, 2016 by the Economic Committee; reports by relevant authorities and opinions of congress persons

HEREBY MAKE DECISIONS ON

I. Assessment of implementation of economic restructuring in the period 2011 - 2015

The National Assembly generally agrees with assessment of economic restructuring in the period of 2011-2015 as specified in the Government’s Statement; besides the achievements; however, limitations still exist and 03 key targets have not yet to be achieved. The investment structure still remains rigid and ineffective. The progress of restructuring of State-owned enterprises is still slow and the capacity for administration is limited. The business efficiency of State-owned enterprises is low and some economic sectors remain dependent on FDI enterprises. SMEs are not awarded incentives for development; the downside of collective economy still exists. The restructuring of commercial banks are ineffective, there are a lot of difficulties in settling bad debts. The restructuring of economic sectors fails to meet requirements for international integration and climate change response. The restructuring of economic regions is not concentrated, the development of economic regions is still divided according to the localities; regulations on cooperation between localities in economic regions and between economic regions. The development of human resources, in respect of quantity and qualifications, is not in line with the economic restructuring.

These above-mentioned limitations are mainly caused by subjective factors. Specifically, the implementation of economic restructuring policies is infectively, slowly and passively carried out and local and personal interests are more concerned; it lacks the cooperation between local authorities. There is no breakthrough in market regulations, especially production market; market regulation reforms are not synchronously conducted; several local authorities are not make their best effort to implement to restructure the economy; regulatory authorities and citizens do not uphold their role in supervising the economic restructuring.

II. ECONOMIC RESTRUCTURING PLAN 2016 - 2020

1. Economic restructuring standpoints

The National Assembly agrees with the standpoints of economic restructuring in 2016-2020 proposed by the Government and focuses on the following viewpoints:

- Comply with the Communist Party’s policies and guidelines, especially those stipulated in the Resolution No.05-NQ/TW dated November 01, 2016 by the Central Committee of the Communist Party (13^th National Assembly); develop growth models based on productivity, quality and competitiveness; mobilize, distribute and utilize of resources and market mechanism . Improve quality of economic growth, develop growth models based on investment, export and domestic market instead of those on the basis of investment and export; focus on productivity, labor qualifications, science –technology and innovations instead of production input. Utilize and uphold domestic resources, attract and effectively take advantage of external resources. Stabilize the macro-economy, remain the economic growth in line with social development, implement social justice; ensure national defense and security; preserve the ecological environment; apply science and technology; improve human resource qualifications; change the labor structure according to the economic structure; improve the quality of citizens' life.

- Focus on implementation of solutions and policies which are specific, measureable and have positively significant impacts on the market; concentrate on private sectors as a driving forces for economic development. Redistribute the State's resources to high value sectors and regions and other economic sectors according to market. Abolish the thinking of subsidies; punctually addressing limitations to prevent negative impacts on other sectors and socio-economic achievements.

- Implement the economic restructuring in line with the government structure; organize simplified and effective administrative structures, give the priority to the meritocracy; step up administrative reforms and enhance the public service quality.

- Effectively implement free trade agreements and proactively take advantage of international integrity and the fourth industrial revolution.

- Ensure the economic growth in line with environmental protection and remediation according to the green economic model and adapt to climate change.

2. Objectives of economic restructuring

- The State budget deficit is expected to be reduced to less than 3.5% GDP by 2020. The annual national debt is expected not to exceed 65% GDP in 2016-2020, the government debt and national foreign debts is expected not to exceed 54% and 50% GDP, respectively. The public investment management institution is expected to be strengthened to nearly meet that of 04 most developed countries in ASEAN (hereinafter referred to as ASEAN -4 countries”). The portion of the State investment is expected to account for approximately 31-34% of the total investment.

- The number of enterprises annually participating in innovation is expected to account for 30 -35% of the number of total enterprises. The annual average growth rate of productivity is expected to exceed 5.5%; the intra-industry growth rate is expected to account for above 60% of the growth of productivity in 2020.By 2020, it is expected to have approximately 25% of number of workers completing training courses of 03 months or longer; the percentage of agricultural workers is expected to reduce to less than 40%.

- Total-factor productivity is expected to contribute to 30-35% of the average growth rate in 2016 - 2020. Narrow the competiveness gap with ASEAN-4 countries.

- It is expected that the credit institutions’ bad debts are reduced to less than 3%. Reduce average interest rates on domestic loans to increase the competitiveness in compared to that of ASEAN-4 countries. Enhance the efficiency of stock markets, government bond markets and corporate bond markets. The market capitalization is expected to account for approximately 70% of GDP and outstanding debt of bond markets is expected to account for 30% of GDP.

- Withdraw the state capital from enterprises in sectors where 50% state owned charter capital is not required, keep the state capital at minimum level for sectors whose investment is rearranged and restructured by the State. By 2020, it is expected to have at least 1 million enterprises; 15,000 effective cooperatives and agricultural cooperative federations.

3. Key tasks for economic restructuring

3.1. Focus on accomplishment of restructuring of 03 primary sectors namely public investment, State-owned enterprises and credit institutions

Effectively implement mid-term public investment plans in line with 5-year financial plans in the period of 2016-2020, and public loan and repayment plans. Promulgate public investment institutions according to the international practice; give priority to innovation in the ways of verification, assessment and selection of projects. Restructure public investment in line with public finance; restructure the State budget and public debts.

Boost the restructuring of State-owned enterprises, especially state-owned corporations and groups. Assess and boost the privatization and divestment of the State capital according to the market mechanism; intensify inspection, supervision and auditing to prevent losses of capital and public assets; develop the models for management of state-owned enterprises and mechanism to control sources of finance for purchase and acquisition of enterprises; attract potential strategic investors. Privatized enterprises shall go public within 01 year from the date of initial public offering. Set and declare specific objectives of divesting state capital of enterprises. Thoroughly settle losses of state-owned enterprises and ineffective projects invested by state-owned enterprises according to market mechanism and principles; carry out procedures for bankruptcy for state-owned enterprises under regulations on bankruptcy.

Generally complete the restructuring of credit institutions, step up settlement of bad debts and gradually apply Base II to credit institutions. By 2020, it is expected that commercial banks have their own capital satisfactory to the Base II including at least 12 – 15 commercial banks Base II is successfully applied. Promulgate regulations of laws regarding assistance and acceleration of the restructuring of credit institution and settlement of bad debts; enhance the capacity of asset management corporations of credit institutions to buy and sell debts at market prices in combination with settlement of pledged assets, protection of creditors and arrange proper resources for thoroughly and quickly settle bad debts. Settle and eliminate the cross- investment and cross- ownership; accelerate the divestment of capital of related sectors by commercial banks.

Accomplish the restructuring of 03 above-mentioned key sectors before 2019 prior to restructuring of others.

3.2. Restructure state budgets and public sectors

Accelerate the restructuring of revenue and expenditures of the State budget; ensure the security of public debts and national finance. Comply with the Law on the State budget, laws on taxation, fees and charges. Practice thrift and frugality according to the economy. Intensify management and utilization of loans, only applies for loans within the solvency; strictly control loans by local authorities and state-owned enterprises. Exercise disciplines on budget collection and spending in authorities at all ranks. Promulgate laws on management of finance, assets, investment and state capital.

Innovate and improve the efficiency and capacity for state management of economy by developing e-government for the management. Conduct acquisition and dissolution of ineffective organizations, downsize the payroll and reform the governmental structure and salary policies. Continue to conduct administrative reforms and dramatically improve the business environment. Basically innovate management methods and change officials’ work attitudes, manifest the State management and exercise disciplines on officials. Strictly deal with violations against regulations of laws and ethical conducts for officials.

In order to carry out the burdens of accountability and social responsibilities; continue to re-structure service pubic providers; do accounting for eligible public service providers as for enterprises, privatize eligible public service providers, except for schools and hospitals; dissolve ineffective public service providers. Fully and accurately include reasonable costs in the prices of essential public services, adjust public service prices according to the market mechanism; have the itinerary for applying market prices to education and healthcare in line with assistance for the poor and beneficiaries of preferential policies. Encourage the involvement of various economic ownerships in development and provision of public services; develop public service markets under the management and adjustment of the State. Set a clear legal doctrine for the operation of public service providers according to the market mechanism, reduce the government’s subsidies and encourage financial independence.

3.3. Concentrate on developing domestic private sectors and attracting foreign direct investment

Promote the establishment and development of private corporations that are powerful and have state-of-the art technologies as a driving force for the economic development, and promote domestic SMEs and enhance the competitiveness of domestic enterprises. Selectively attract foreign-invested projects and powerful multinational corporations in line with environmental protection. Create favorable, equal and competitive business environment, reduce enterprises’ expenses in relation to state management and risks. Establish the liaison between domestic enterprises with regions having foreign direct investment. Develop policies and mechanism for SME assistance. Speed up the implementation of PPP projects, stipulate mechanism for management, supervise and utilization of investments of specific projects.

3.4. Modernize economic sector planning and structuring towards improving productivity, quality and efficiency in line with international integration

Promulgates laws on planning and management, overcome local management difficulties Study to develop relevant regulations applied to economic regions and administrative-economic zones, promote socio-economic development. Study, review and adjust functions and missions of local authorities and develop regulations on coordination of economic development by region. Cooperate to promulgate and implement policies on investment attraction and promotion, give priority to potential and advantaged economic sectors. Develop the models of urban economic growth, organize structures of urban authorities and define their functions, missions and management methods; give priority to smart cities.

Dramatically restructure the agricultural sector in line with development of new rural areas having high quality and added value and adapting to the climate change, especially changes in plant and domestic animal and plant varieties in climate-affected regions; adjust land use planning according to new agricultural production models. Continue to renovate and expand effective production models, intensify association and cooperation in production and sale of agricultural products by value chain, and create connection between domestic and overseas retail chains. Establish and develop new cooperative models according to the Law on Cooperatives and policies on attraction of investment in rural and agricultural sectors; apply information technologies to production. Step up the establishment of brands of Vietnamese agricultural or fishery products.

Restructure agricultural sector, promote intensive and refined processing of agricultural, forestry and fishery products and manufacturing industry; dramatically enhance intra-industry productivity, apply technology to production and enhance the regional value content. Concentrate on key industries which have competitive advantages and significant impact on sustainable development in line with environmental protection. Focus on development of industrial sectors specialized in manufacturing components and knock-down kits, promote products contributing to the production network, value chain and global distribution network. Facilitate the project proposal for economic restructuring by enterprises.

Restructure service sectors; maintain the service growth rate higher than GDP growth rate. Concentrate on development of services which have advantages, high intellectual and technological content. Cooperate to implement the national tourism program and develop tourism into a spearhead sector by 2020; enhance the quality of tourism and its level of professionalism; encourage enterprises to invest in tourism and focus on forest, marine and island tourism.

Promulgate relevant regulations and enhance the capacity for enforcing laws on environment; basically tackle environmental pollution, especially in important regions, supervise and response to cross-border pollution and effectively respond to climate change.

Develop the national program for implementing new generation free-trade agreement which specifies compulsory missions and requirements for economic sectors; be ready for integration and promote domestic economic reform.

3.5. Synchronously develop the financial market, land use right market, labor market and science and technology market.

Accomplish the restructuring and development of strategies for financial market stabilization and growth, achieve balance between the monetary market and capital market to reduce the pressure for grant of loans by credit institutions; achieve balance between the share market and bond market, between the government bond and corporate bond to meet the demands for mid-term and long-term capital and between the credit service and non-credit services, develop the venture capital market, derivative securities market and consumer credit market. Restructure the organization in charge of managing monetary and securities market to meet new development requirements. Protect financial service users.

Assess the actual effectiveness of growth models, gain experience in land assembly, attract investments in agricultural sectors, develop new cooperative models and stipulate proper policies and regulations. Encourage and facilitate the farm land assembly; develop legal doctrines applicable to primary and secondary land use right markets, especially for farm land.

Considerably enhance the quality of higher education and vocational education. Concentrate on developing and finding solutions for extending and classifying vocational education for the demand of employment; introduce incentive policies on training of personnel in science and engineering; significantly innovate training program towards increasing the practice in line with the demand of the market and enterprises. Reform vocational education towards autonomy and competiveness. By 2020, it is expected e 40 vocational schools will be recognized by ASEAN-4 countries or the international organization.

Introduce solutions for increasing the annual science and technology market value. It is expected that the quantity of inventions registered for protection in 216 – 2020 will double that in 2011- 2015 and focus on the quantity of inventions in relation with the national science and technology programs.

III. IMPLEMENTATION

1. The Government shall give instructions on economic restructuring in the period 2016-2020, prepare the action programs by April 2017 under the National Assembly’s Resolution ; annually submit a report on implementation and include it in the annual socio-economic development plan; arrange and allocate budget with 5-year financial plan 2016-2020 and mid-term public investment plan.

Review and propose to promulgate new laws or make amendments and supplement to current laws regarding economic restructuring and report at the third meeting of the 14^th National Assembly. Prepare and ratify key schemes by the fourth quarter of 2017 and implement them at the beginning of 2018. Innovate methods of management, supervision and assessment of economic restructuring by regulatory authority; enhance capacity and sense of discipline in economic restructuring.

Disseminate and encourage private sectors and foreign-invested sectors to proactively participate in economic restructuring. State –owned sector shall actively restructure upon request.

2. The Standing committee of the National Assembly of the Socialist Republic of Vietnam, Nationalities Councils, and congress persons shall supervise the implementation of this Resolution.

3. The Supreme People’s Court, Supreme People’s Procuracy and State Auditors shall, according to functions and mission, effectively implement the National Assembly’s Resolution.

4. The Central Committee of Vietnamese Fatherland Front, its members and citizens shall implement this Resolution.

This Resolution is ratified on November 08, 2016 by the second meeting session of the 14^th National Assembly of the Socialist Republic of Vietnam