PM approves economic restructuring plan centred on credit institutions and SOEs

A view of Bach Ho oil rig in Ba Ria-Vung Tau Province. Oil exploitation is one of the country’s key exports. State funding would represent 35-40 per cent of the total social investment, which is to make up 30-50 per cent of the nation’s gross domestic product (GDP) in the coming years. — VNA/VNS Photo Thanh Long

HA NOI (VNS)— State funding would represent 35-40 per cent of the total social investment, which is to make up 30-50 per cent of the nation’s gross domestic product (GDP) in the coming years, announced Prime Minister Nguyen Tan Dung.

This is to ensure resources are in place for the country’s continued development, the PM said as he approved an overall plan to restructure the economy between now and 2020, particularly credit institutions and State-owned enterprises (SOEs).

Major balances of the economy including investment, savings, consumption, State budget, public debt and trade and payment balances needed to be maintained at reasonable levels, he said.

Dung revealed that about 20-25 per cent of State budget spending will be extracted for development every year. Capital management methods should be renewed and massive investments should be avoided.

The scales for private investments will be expanded for the development of infrastructure and driving economic regions, he said.

The plan aimed to boost a market economy, drive social resources into manufacturing competitive products and help form a reasonable economic structure.

It would allow high-tech sectors to gradually replace low-level ones for rapid and sustainable economic growth, he said.

By 2015, the country would focus on cleaning up credit institutions with bad debt treatment being a top priority, the PM continued.

These institutions have to concentrate on their core business, assure payment capacity and enhance transparency in operations.

The credit institution system would be comprehensively restructured to ensure systematic safety, efficiency and sustainability as well as service quality; while State-run banks and commercial joint-stock banks with State controlling stakes would have to prove their driving roles in the system.

Fragile banks would be facilitated for merger and acquisition and foreign lending institutions would be stimulated to equally compete and co-operate in Viet Nam.

Dung urged State-run firms to concentrate on areas such as defence industry, manufacturing essential goods and providing key services and some basic high-tech sectors, and promptly withdraw capital from non-core lines of business.

He asked SOEs to speed up equitisation, apply modern management methods and follow market economy rules, while encouraging the development of private economic groups which could be competitive at both domestic and global markets.

He claimed that maintaining macro-economic stability was extremely important in the restructuring process. “Monetary policies must be carried out cautiously, flexibly, comprehensively and efficiently in order to fulfil the goal of controlling inflation, and ensuring reasonable growth.”

Monetary policies aim to reduce State budget overspending, control public debt and improve the nation’s financial health, he noted.

He asked authorities to create a better investment environment to attract more development capital and intensify supervision of the market and prices of essential goods, especially electricity, coal and petroleum.

Dung also requested the country speed up the restructuring of production and service sectors to increase products’ added value and domestic content, and prioritise the development of key economic regions and marine economic centres.

As for economic restructuring, Dung said the Government should minimise its interference with administrative measures with a view to accelerating reform for good governance. — VNS