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Performance of Vietnam’s socio-economic development in 2010*
10/3/2011 9:40' Send Print

The year 2010 is the final year to implement the 5 year Socio-economic Development Plan2006-2010. The 2010 Socio-economic Development Plan was implemented in the context of Vietnam having to face many difficulties and challenges stemming from unfavourable impacts of the financial crisis, natural disasters and epidemic diseases. However, thanks to the endeavours of the political and administrative system, the business community as well as the whole society, Vietnam has achieved the majority of targets in accordance with the Resolution of the National Assembly.

I. ACHIEVEMENTS

1. Prevented economic stagnation and recovered economic growth at a considerably high rate.

Despite the slow recovery of the global economy after the crisis, the Vietnamese economy quickly escaped from stagnatfon and attained comparatively high economic growth. In 2010, GDP increased by approximately 6.78%, which is higher than the target set by the National. Assembly. The agriculture sector has risen by 2.78%, the industrial and construction sector has gone up by 7.70%, while the service sector is 7.52% higher. With such results, the average GDP growth rate of the 5 year period, from 2006 to 2010, is aproximately 7% per year. In 2010, the GDP per capita is about l,160 USD.

The development investment of 2010 is estimated to rise by 12.9% compared with 2009, which is equivalent to 41% of GDP. There is also much progress in the disbursement of National budget capital, which is expected to achieve the yearr's target. Such improvements shall result in the early completion of many infrastructure projects and the establishment of new manufacturing factories and also contribute significantly to the shift in the economic structure and economic growth recovery.

In 2010, there are about 85,000 new private companies with total registered capital of 500,000 billion VND, equivalent to nearly 6 billion VND per company, increasing 125% compared with 2009. This makes a significant contibution to business development as well as job creation.

2. Improved macro economy and ensured the major economic balances

Despite many difficulties in business, including a huge deficit in the trade balance and in the national budget, which are at the highest levels of recent years, as well as the impacts of the economic stimulation package in 2009, it is a real challange to ensure the stability of the macroeconomy. However, with flexible and appropriate policies, we can witness much progess.

Total Government revenues in 2010 are expected to be 12.7% higher than planned and increase by 17.6% compared with 2009. This guarantees Government expenditure and contributes to the reduction of the national budget deficit to 5.8%, lower than the target set (6.2%). Until the end of 2010, Government debt is equivalent to approximately 44.5% of GDP, external debt is equal to 42.2% of GDP and public debt is equivalent to 56.7% of GDP, all within safe limits.

Monetary policy has contributed significantly to development and inflation control as well as to the achievement of set targets: means of payment to increase by about 20%; credit debt to go up by 25%; the exhange rate to be regulated flexibly in accordance with market principles; the interest rate to be controlled under the agreed mechanism towards a gradual decrease; further enhace the monitoring mechanism to ensure the security of credit organizations; bad debt to be controlled under 3%.

Total export revenue in 2010 is estimated to increase by 19.1 %, triple the set target. This has contributed considerably to the reduction of the deficit in the foreign balance of payments.

The balance between demand and supply is guaranteed in association with the price control and speculation solution, prices have been stablized in the market

3. Ensured social security and social benefits, even in such a difficult economic situation

Despite the task of reducing the national budget deficit, the Government still attaches much importance to cultural and social sectors. This contibutes significantly to stablizing and impoving people's standard of living. The average income per person has reached 1.365 million VND in a month, an increase of 8.9% (excluding price appreciation).

In 2010, about 1.6 million jobs have been created, 1.7 million people have received vocational training. The vocational training programme for rural labour has been actively implemented. It is expected that, by the end of 2010, about 40% of the labour force will have been trained.

Poverty reduction programmes, especially in the 63 poorest districts, have been implemented with practical supporting measures in production and everyday life. The number of poor households has declined by 1.85%, to 9.5%. The new rural village development programme has been actively accelerated. The support programmes for people with meritorious services and the social protection programme have been enhanced towards widening the targeted participants and increasing the benefits. The Government has spared more than 19,000 billion VND (more than twice that of 2009) to provide regular support to over 1.6 million people and supply thousands billions VND as well as thousands of tons of rice to people in emergencies, to recover from natural disasters and escape from hunger during difficult periods.

Policies for house development for workers in industrial zones, low-­income citizens in urban areas, poor people in rural areas and dormitories for students have been urgently constructed and have achieved encouraging results. The total preferable debt to execute social policies has reached 91,000 billion VND, an increase of 25% compared with 2009, of which 29,000 billion VND has been provided to pupils and students, increasing by 60%. Vietnam also continues salary reforms, in which the minimum wage has gone up since 1st May 2010.

The social and health insurance systems are under development. There has been a gradual increase in the number of participants, which contributes considerably to reducing the damage and difficulties of participants at risk.

More importance has been attached to health care, population, family planning, children protection and gender equality activities, which has brought about positive results and has basically satisfied the goals set by the National Assembly. Some new dangerous epidemic diseases have been successfully controlled and prevented. Local healthcare centres have been improved. The implementation of hospital construction and upgrade programmes, as well as staff transfer and healthcare socialization programmes have been accelerated, thus, further enhancing the capacity and quality of the healthcare system, especially at grass-roots levels. To date, 80% of total number of communes satisfy healthcare standards (the figure was 65.36% in 2009). Many hospitals have applied new high-tech medical treatment methods. The National Sanitary and Phytosanitary network has been established.

Education and training also witnessed much progress. Educational management and the finance mechanism are under comprehensive reform, in accordance with the development of educational staff and new teaching methods. Along with the increase in national investment, educational infrastructure development, from kindergartens to universities, has been socialized. All secondary schools have been connected to the Internet. There is a rapid increase in the number of kindergartens and secondary schools, to meet the national standard. 100% of provinces now meet the standards of universal secondary education; the number of students dropping out of school has decreased dramatically; all exams are also executed in a strict manner. Tight regulations have been set in establishing new universities; further accelerating the socialization and cooperation in education with international universities.

The culture, information and sport sectors have also achieved much impovement. The press have contributed significantly to the dissemination of information about the Party and Government's policies, as well as reporting citizens' views in all areas of politics, economics and the society of the nation.

Creative arts and literature activities have enjoyed further development, contributing to the increase in the diversification of art and literature products. More attention has been paid to cultural heritage preservation and development activities. In 2010, two more world cultural heritages of Vietnam have been recognized. Popular sports for all and professional sports have been enhanced with diversified forms. The Hanoi - Thang Long 1000 years ceremony has been organized in solemnity and deeply imbued with her national identity manner, helping to strengthen patriotism and good traditions as well as the pride of citizens toward a heroic capital.

4. Achieved positive progress in science, technology and environmental protection.

All science and applied technology organizations and enterprises are encouraged to develop and be independent. In 2010, there are more than 300 new science and technology enterprises, twice that of 2009. The technology market has gradually developed with a remakable increase in the value of transactions, compared with the previous year. The number of registered inventions by Vietnamese has doubled, with patents increasing by 15%; Vietnamese agricultural scientists have created 30 new varieties with high productivity and quality.

Natural resource and mineral management, in association with environmental preservation activities, has been strictly regulated. The legal framework for mineral management is nearing completion. The inspection and monitoring mechanism for mineral exploitation licensing has been strengthened. Vietnam has also established its strategy for mineral exploitation and utilization to ensure socio-economic effectiveness as well as national security and environmental protection. Land and water management has been attached with more importance. To date, Vietnam has virtually completed granting land use rights certificates and is actively evaluating the implementation of the land legal framework for further amendment.

The Government has attached much importance to environmental protection with a focus on comprehensive measures, from institutional framework development to pollution prevention measures and inspection and monitoring mechanisms against law violations. Hundreds of environmental law violations have been tackled, many of which have been serious cases. Also, the application of environmental impact assessment as well as pollution solutions is strictly controlled in new investment projects. The treatment of urban solid waste and health care solid waste has been accelerated. The supply of clean water to households has been improved and, to date, 83% of the population has access to clean water. Forest planting and protection has been improved. At the end of 2010, forest coverage accounts for 39.5% of the country. Targeted programmes and national action plans to combat climate change are being actively executed.

5. Continued to focus on administration reform, anti-corruption and thrift practices and achieved positive progress in these areas.

Administration reform is still considered essential in furthering development, with main features including institutional enhancement, organizational mechanisms and administrative procedure simplification. The Government has submitted 16 draft laws and ordinances to the National Assembly and the National Assembly Standing Committee in accordance with the set target. Thirty projects simplifying administrative procedures have been implemented comprehensively; the national database on administrative procedures has been published, in which procedures at all levels have been standardized and unified; 258 central government agencies' procedures have been simplified with a focus on land, housing, construction, tax and customs procedures. The establishment of new procedures is strictly controlled to respecf the principles of openness and transparency to provide favourable conditions to citizens and enterprises. The "one stop shop" mechanism and the application of information technology have proved effective. The monitoring of the implementation of legal documents is being strengthened. Continue to develop the model of one ministry managing multi sectors. The pilot model of not organizing people's committee at district and ward levels has been strictly controlled.

Much progress has been witnessed in anti-corruption, including institution development, organization enhancement and the implementation of monitoring, inspection; investigation, prosecution and judgment. The Prime Minister has also approved the action plan to implement the UN convention on anti-corruption. All central and provincial governmental agencies have issued and implemented the action plan for the national strategy on anti­corruption. The campaign "Study and follow the examples of Ho Chi Minh", along with propaganda and education campaigns on political thinking have helped raise cadres, Party members and citizens' awareness of anti-corruption programmes.

The practice of thrift is mainly focused on areas including governmental expense, construction, public assets, land and natural resources management. The implementation of administrative expense lump sum payment mechanisms and financial independence mechanisms, the application of information technology, administration procedure reform, etc have all contributed significantly to national budget and social resource savings.

6. Ensured political and social stability and national security; achieved encouraging results in external cooperation, and enhanced Vietnam's position in the international arena.

The quality and potential of the military and police forces have been gradually upgraded to ensure national sovereignty and security. Those forces responsible are active in acknowledging the situation and discovering and fighting against plots of rival forces. All important national political, economic, and social events have been safely organized. All crime fighting activities including prevention and regulation, have been effectively implemented. Many prisoners have been granted a special reprieve for self­improvement, especially in the preparation period for reintegration into society.

The need to satisfactorily address citizens' complaints and denunciations has also received much attention. The coordination among responsible agencies as well as the strengthening of dialogue between administrative offices and complainants has contributed to many difficult cases being addressed.

External affairs have been executed comprehensively and synchronously in political, diplomatic, economic and cultural sectors; combining Communist Party diplomacy with the State and citizens' diplomacy. Party leaders and the Government have enhanced the relationship between Vietnam and many partners through their foreign affairs dealings, providing favourable conditions for further cooperation in many areas of mutual benefit, establishing a new position for Vi et Nam on the international arena. Notable outstanding results include the 16th ASEAN Summit, ASEAN Regional Forum (ARF) and the ASEAN Defense Ministerial Meeting plus (ADMM+), the ASEAN Ministerial meetings on economic, cultural and social pillars; and Vietnam holds the chairmanship of ASEAN, AIPA and was the host of the East Asia World Economic Forum. Such events have been highly appreciated by the international community and domestic public opinion. International integration has been actively accelerated with positive results. More importance is now attached to policies towards Oversea Vietnamese. Such progress has contributed to the enhancement of Vietnamese prestige and its position in the world, and thus created a favourable and important resource for socio-economic development.

II. SHORTCOMINGS AND WEAKNESSES

Despite the above-mentioned achievements, in 2010, the economy has displayed certain constraints and weaknesses:

1. Economic growth lacks sustainability; slow in economic structure transfer; poor infrastructure; less investment effectiveness; investment in agriculture and rural areas are not equivalent to their strategic importance in the economy; supporting industries has yet to be developed, resulting in low value added to products; electricity generation is not sufficient to satisfy huge demand. The effectiveness of the investment and development rate of SOEs is not equivalent with the size and share of the resources held by these enterprises as a majority of state capital, assets, land and resources; SOE privatization is slow; there exists drawbacks in SOEs relating to the implementation of governmental management rights and ownership rights.

2. Incomprehensive market mechanisms and long-term subsidies in electricity and coal prices discourage endeavours to save energy and limit the capital mobilization from different economic sectors to invest in electricity generation. Prices of specific products, including milk and medicine, have yet to come under adequate control. Major macro balances are unstable; too much interference in tax policies; loss of tax revenue; huge national budget deficit; wasteful governmental expenditure; high trade gap; deficit in total balance of payments; reduction in foreign reserves; high interest rates. There is a lack of comprehensive cooperation between financial polices and monetary policies.

The relationship between stabilizing the macroeconomy and development has yet to be harmonized. The economic growth rate, despite considerable increase, has generated new difficulties to macroeconomic stability.

3. Poverty reduction results are not stable; the proportion of households near the poverty line and households returning to poverty is still high. There have had been few major changes in dealing with unemployment and increasing the quality of the labour force. The salary mechanism, especially in the administrative sector is unreasonable. Many difficulties and drawbacks occur in the health care sector. Sanitary and phytosanitary measures have not been well implemented.

The development of more civilized lifestyles has not generated any improvement in enhancing positive factors and preventing negative ones. Traditional festival organization is not managed properly resulting in spontaneous, flaunting, and wasteful activities. Social evils are complicated. HIV infection prevention is unstable with an implicit risk of new infections being on the rise. Traffic accidents and traffic jams are still hot issues.

4. Governmental management of education and training is inadequate. The quality of education is uneven throughout the country; the contents of vocational training curricula are often outdated. There are many limitations in education in areas with special difficulties, resulting in low proportions of students attending high schools, universities and colleges. There exists an increasing trend in moral violations at school.

5. Research in basic and applied science has not really brought about outstanding results which can contribute to increased productivity and quality of products. The effectiveness of national budget investments in this area is still low and the Government has yet to develop an appropriate mechanism to mobilize resources to invest in science and technology development.

Weaknesses and shortcomings can be witnessed in environmental protection, natural mineral management, including weak governmental management effectiveness; poor environmental protection awareness amongst society and a resource shortage for environmental protection activities. Some environmental protection targets have not been achieved.

6. A lack of transparency in some institutions and policies has restricted the effectiveness of governmental management, which may give rise to corruption. There is a lack of an appropriate master plan on governmental management decentralization as well as of a monitoring and investigation mechanism. Such absences can result in arbitrary investment leading to overlapping, dispersive, ineffective investment and thus a wasteful use of resources. There exists overlapping in investigation activities. A number of cadres and officials with low capacity can abuse their rights to execute law violations. The results of anti corruption and thrift practice are limited.

Although the above-mentioned situation stems from many external factors, many subjective shortcomings in governmental management at all levels are direct and main reasons, which require urgent solutions.

In general, thanks to the leadership of the Communist Party and the effective management of the State, as well as drastic guidance from the Government and administrative agencies at all levels, the endeavours of the political system, business community and all citizens, we have achieved quite comprehensive successes,' in principal completing the general targets set for 2010. The economy has recovered and gained a considerably high growth rate.

The macroeconomy is basically stable. Cultural and social areas have experienced much progress. The society and politics are stable; national and social security has been guaranteed. Foreign affairs and international integration have witnessed important achievements. The prestige and position of Vietnam in the international arena continues to be enhanced.

Such results have significantly contributed to the completion of all targets and tasks stipulated in the 5 year Socio-economic Development Plan 2006-2010, creating a favourable environment for further development in the next period./.
 
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* Source: The Part 1 of the Vietnam Government Report to the Consultative Group Meeting "Stabilizing the macroeconomy and focusing on sustaibnable development". Hanoi, 7-8 December 2010.
 
 
Source: The Vietnam’s Socio-Economic Development Review - No.64, December 2010