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Overview of the socio-economic situation in 2010 and tasks of 2011
14/2/2011 15:20' Send Print

2010 was the last year of the 5-year plan (2006-2010) and the 10-year Socio-Economic Development Strategy (2001-2010). It was also the year when many important events of the country were organized. It is necessary for the country to review the socio-economic situation in 2010 to further its development.

I. Overview of the socio-economic situation in 2010

Achievements

The 2010 Socio-Economic Development Plan started at a time when the country was facing numerous difficulties and challenges as a result of the global financial crisis and economic recession, natural disasters and epidemics. However, with synergies of the political system, branches, levels, people and business community, most of the norms and criteria adopted by the National Assembly were achieved.

1. Recession was stalled, the economy recovered and recorded relatively high growth rate

Despite slow recovery of the world economy after the crisis, Vietnam’s economy got out of the recession early and achieved a relatively high growth rate. The country’s GDP in 2010 increased to 6.78%, higher than the rate approved by the National Assembly. The agricultural sector expanded by 2.6%, industry and construction by 7.6%, and service by 7.5%. Given these achievements, per capita GDP in the 2006-2010 period was 7%. Per capita income in 2010 was 1,160 USD.

The development investment capital in 2010 was 12.9% higher than that of 2009, accounting for 41% of GDP. Due to high disbursement rate of State budget was due to strict management of the state budget, it is believed that the disbursement plan will be fulfilled. Thanks to this, many infrastructure projects will be completed, new production establishments are created; the economic restructure will be accelerated and the economy will recover. In 2010, about 85,000 businesses with a total registered capital of 500,000 billion VND were set up, an increase of 150% as compared with that of 2009. This is an important contribution to production and business as it helps generate more jobs.

2. Macro economy was improved which basically ensured major demands of the economy

Difficulties in 2010 which included high trade deficit, the highest ever budget over expenditure in years and side effects of the economic stimulus package in 2009 posed great challenges to macro economic stabilization. Nevertheless, due to flexible and appropriate measures taken, the situation was gradually improved. The total state budget revenue in 2010 expected to be 12.7% higher than estimated and 17.6% higher than in 2009 thus ensuring sufficient fund for expenditure requirements, and helping reduce the state budget overspending to below 6%, lower than the target of 6.2%. By the end of 2010, Government outstanding was equal to 44.5% of GDP; national external outstanding was 42.2% of GDP and public debt outstanding was 56.7% of GDP which was within the safe limit.  

The monetary policies contributed to promote growth and inflation control. Total means of payment expanded to 20% and credit outstanding increased by 25%. Exchange rates were regulated by the market. Interest rates were levied on the basis of consensus. Auditing was strengthened to ensure safe operation of credit entities. Bad debt was kept under 3%. The total export turnover in 2010 is estimated to increase by 19.1%, three times higher than planned, contributing to control import and international payment deficit.

3. Social security and welfare were strengthened despites difficult economic conditions

 Though the State budget was strictly controlled, the cultural and social areas still received much care and investment to stabilize and improve the people’s life. Per capita income reached 1,365,000 dong per month, an increase of 8.9% (price increase excluding). About 1.6 million jobs were created in 2010 while 1.7 million people, 430,000 of them were farmers, received job training.

 Practical solutions were taken to reduce poverty, particularly in 62 poorest districts. The percentage of poor households lowered from 1.85% to 9.5%. Policies on assisting people who made great merit to the country and social sponsorship were improved. The number of entitled recipients was expanded with higher allowances. Policies on housing development for workers in concentrated industrial zone, low-income earners in urban areas, poor people in rural areas and campus for students were implemented with positive results. Outstanding of preferential loans for implementation of social policies reached 91,000 billion dong, 25% higher than in 2009. Outstanding of credit for 1.9 million students were 29,000 billion dong, an increase of 60%. Salary increase roadmap and some other related policies were strictly followed. The minimum salary baseline was raised from May 1, 2010.

 The social and health insurance systems continued to develop. The number of people took part in social and health insurance schemes were higher. This resulted in reducing difficulties and damage to insurance holders at risks. More attention was given to public healthcare and protection, population and family planning work, childcare and protection and gender equality. In these areas, many development goals set out by the National Assembly were achieved.

 New developments were seen in education and training. Mechanisms on education management and finance were renovated. Capacity building for teachers and educational managers were organized. Teaching methods were improved. In addition to State investment, other sources were mobilized to upgrade educational infrastructure and develop education and training institutions from pre-school to university. All schools were connected to the internet. Control on the establishment of new university was stepped up. Training on demand and cooperation with foreign universities on advanced training programs was strengthened.

4- Positive achievements were made in science, technology and environment protection.

The mechanisms of self-reliance and responsibility of public scientific and technological organizations have brought about initial results. Scientific and technological businesses and research institutions were encouraged to develop. In 2010, more than 300 scientific and technological businesses were established, twice as much as of 2009. Progresses were recognized in technological market. Values of technology transaction and sale were higher than in 2009. The number of inventions registered for patents and licenses by Vietnamese increased by two folds. The number of issued patents increased by 15%. Vietnamese scientists created more than 30 new species with higher output and quality.

Resource and mineral management in close association with environment protection were strengthened. The legal framework on resources and minerals were improved. By now, almost all of the Certificates of the right to land use were issued. Review of the implementation of the Law on Land was underway for improvement. Importance was attached to development of legislations and policies on environmental protection, and implementation of solutions to prevent pollution. Supervision and inspection was stepped up to prevent violations. Environmental impact assessment was carried out and measures to prevent pollution were taken by new investment projects. Process of urban and medical solid waste was strictly controlled. Attention was given to ensure sufficient water supply to households. As a result 83% of the rural population and 76% of the urban population have had access to safe water. Progress was made in afforestation and forest protection. By the end of 2010, forest coverage reached 39.5%. The Target Program and the National Action Plan on Response to Climate Change have been actively implemented.

5. Practical results were recorded in administration reform, corruption prevention, and practice of thrift

 Administration reform has been considered a breakthrough in developing the legal framework, organizational structure and administrative procedures. The Government submitted to the National Assembly, the Standing Committee of the National Assembly 16 bills as scheduled and at the same time promulgated documents which regulate the implementation of the passed laws. The Project 30 on simplifying administration reform was further enhanced. It issued the National Database for Administrative Procedures in State Management for the central offices, provinces, districts and communes.About simplified 258 procedures belonged to ministries and branches which manage land, housing, construction, taxes, and customs. The promulgation of new administrative procedures has come under strict control to increase transparency, reduce troubles and create favourable conditions for people and enterprises. The mechanism of “one-stop shop” and the application of information technology have proved effective. The monitoring and supervision of the implementation of legislation was strengthened. The organizational model of multi-functional ministry has been implemented. The abolishment of People’s Councils at district and ward levels has been strictly piloted.

6. The socio-political situation was stable. National defense and security were maintained. Achievements were made in external relations and international cooperation. Our country’s status in the international arena was heightened.

 We have gradually increased the quality and potential of the army and public security forces to firmly defend national sovereignty and security. Guidance was given to settlement of citizens’ complaints and denunciations. The enhanced coordination among levels and functional branches and dialogues between administrative offices and citizens has contributed to solve many cases, including complicated and pending ones.

External relations have been expanded with the three pillars of political, economic and cultural diplomacy and the joint forces of the Party’s external relations, State’s diplomacy and people-to-people diplomacy. The Party and State high-level external relation activities helped elevate Vietnam’s relations with counterparts, expand multi-faceted cooperation for mutual benefit and facilitate its projection in the region and the world. Prominent achievements were the 16 ASEAN Summit, the ASEAN Regional Forum (ARF), the Expanded ASEAN Defense Ministers Meeting (ADNN+), and the ASEAN Ministers Meeting (AMM). Vietnam as the ASEAN Chairman, AIPA Chairman and the host country of the East Asia Economic Forum was highly appraised. Vietnam has quickened its international integration. All these results have contributed to enhance its prestige and profile in the world, and brought about more favorable conditions and important resources for socio-economic development and national defense.

Weaknesses and constraints

 First, economic growth was not sustainable. Economic restructuring was slow. Infrastructure was still in poor conditions. Investment effectiveness was low. Investment in agriculture and rural areas was not in par with their strategic role. Support industries were less developed. Added value of product was also low. Electricity production fell short of demand. Though the State enterprises held a major share of national capital, asset, land and resources, their investment effectiveness and growth were not as expected. Equitization and renovation of state enterprises were slow. There were problems in state management and ownership of state enterprises.

Second, the market economy mechanisms were not complete. Long lasting state subsidy to electricity and coal prices did not encourage energy saving and hampered capital investment of economic sectors into electricity production. Prices of some commodities namely milk and medicine were out of control. Macro balances were not sustainable. State budget revenue recorded losses. State budget was overspend and wasteful. Import was high. There was deficit in balance of payment. Foreign currency reserve decreased. Interest rates were high. Coordination between financial and monetary policies was not harmonious. Relations between macro-economic stability and growth were not conformed. The relatively high economic growth rate brought about new difficulties to macro-economic stability.

Third, poverty reduction was not sustainable as the percentage of household at poverty line and poverty relapse were high. Job generation and labor force’s quality were problems of much concern. Payment scale was not appropriate, especially in public administration sector. There were constraints in public health care and treatment; food security and hygiene were poor. There was not much progress in building cultural lifestyle and in eradicating bad practices. Social ills were complicated in some localities. HIV spread was not checked. Traffic accidents and jams were common.

Fourth, there were still deficiencies in state management of education. Education quality though out the country was not at the same level and slow to change; vocation training content and programs as well as teaching and learning methods were renovated slowly. There were limitations in education in difficult areas. Ethical mishaps in some schools caused great social concern.

Fifth, scientific and technological research and application did not make a breakthrough to improve product’s output and quality. State budget turnover in this sector was low. Appropriate mechanism was not in place to mobilize resources to scientific development and technology renovation. There were weaknesses in environmental protection and mineral resource management. State management in these sectors was ineffective and inefficient. Some environmental criteria were not achieved.

 Sixth, legislations and policies were not compatible. This limited management effectiveness gave rise to corruption and other negative activities. Disciplines and orders were not stringent. State management was decentralization was not coupled with appropriate plan, supervision and monitoring. This led to arbitrary implementation, overlapping investment, poor effectiveness and waste of resources. Sometimes, supervisions were of low quality. Results of anti-corruption and practice of thrift were limited.

There were objective reasons to this situation. However, the main and direct causes were subjective constraints in management and operation at all levels and branches.

II- Tasks in 2011

It is forecast that, in 2011, the world economy’s recovery is unstable and there are still a lot of difficulties. The Vietnamese economy faces with many challenges caused by external factors. That is why, if sustainable internal synergy is not generated to take advantage of opportunities and overcome difficulties, the country’s macro stability and growth will be affected.

In early 2011, the 11th National Congress of the Party will adopt important documents which will define viewpoints, objectives and guidelines for national development in the new stage. These are fundamental advantages. However, there remain elements that cause high inflation and unstable macro-economy. Weaknesses in institutional system, infrastructure, resources, natural disaster, epidemic, and climate change are also big obstacles.

1. Overall objectives:

Maintain macro economic stability and inflation control in combination with renovation of growth model and economic structure transformation; achieve a growth rate higher than that of 2010; enhance economic quality, efficiency and competitiveness; ensure social security and welfare; improve people’s life; safeguard political stability; ensure national defense, security and social safety; heighten external relation effectiveness and deepen international integration.

2. Major criteria:

Economic criteria:

- GDP is expected to grow at 7% - 7.5% against 2010

- Total export turnover in 2011 rises 10% against 2010. Trade deficit to be kept

under 18% of the total export value

- Total social investment is equivalent to 40% of the GDP.

- Consumer price index (CPI) is less than 7%

Social criteria:

- University and college’s enrolment rises to 6.5%; technical and professional secondary schools to 10%; vocational and secondary schools to 16.5%

- Birthrate decreases by 0.2‰.

- Job generation for 1.6 million laborers, 87,000 of them work abroad.

- Percentage of poor household is below 2% according to newly issued poverty baseline; percentage of poor district reduces by 4%.

- In 2011, 4% of commune achieve new criteria for rural development

- Under-five malnutrition rate reduces to below 17.3%

- Twenty one hospital bed per 10,000 population (excluding beds at communal health station)

- Per capita housing space in urban area: 12 m2

Environmental criteria:

- Percentage of rural population has access to hygienic water : 86%

- Percentage of urban population having access to clean water: 78%.

- Percentage of establishments that cause serious environmental population and are subjected to punishment: 69%

- Percentage of treated solid waste: 82%

- Percentage of industrial, export and processing zones with concentrated waste water treatment system of environmental standards: 55%

- Percentage of urban solid waste collected: 83%

- Forest coverage: 40%

3. Major tasks and solutions:

To achieve development goals in 2011, efforts should focus on implementing important tasks of the five-year plan (2011-2015); preparing conditions for implementation of programs and plans: (1) Complete the market economy under socialist orientation; (2) Develop human resources, especially high quality human resources; (3) Build and complete the socio-economic infrastructure with some modern and large-scale projects.

Main solutions are:

First, maintain socio-economic stability, ensure major balances in the economy for economic development. Take measures to increase export and control import. Major balances, namely commodity demand and supply should go in hand with consumption orientation. The campaign “The Vietnamese use Vietnamese commodities” is to be stepped up to be more effective. Balance between thrifty and investment is to be maintained.

Closely coordinate financial and monetary policies, with the monetary policies being regulated with flexibility and caution. Total means of payment is to be increased to implement macro criteria. Measures are taken to regulate interest rate in keeping with market operation and to create favorable conditions for production and business.

Strictly control the bullion market and foreign currency. Implement the roadmap to adjust prices of some commodities and services under State management like electricity, coal, healthcare, and education services according to the market economy. Policies are to be promulgated to support people with great merit and entitled families and poor people.

Control and restructure public debt; stabilize money value and ensure national financial security. Percentage of mobilization to State budget against GDP must be reduced. State budget revenue loss must be prevented. Policies on and mechanism on State budget expenditure must be renovated to ensure correct and effective spending, thrift and waste cut .

Second, it is necessary to accelerate economic structure including first of all investment structure in each branch and sectors, capital structure to reduce investment of State budget and to mobilize other sources of investment capital. State capital is mainly for important projects of socio-economic effectiveness. Decentralization goes hand in hand with strengthened guidance, supervision and monitoring. Capital resources are integrated. Focal points of national target programmes and target-supporting programmes are set up. These measures are to overcome the consequences of scattered investment.

Adjust the industrial structure to improve added value. Promulgate and implement policies on developing support industries to increase the competitiveness of domestic production branches to reduce import. Mechanisms and policies on foreign investment mobilization, investment in sectors of high quality, high technology, energy saving, environmental friendly and export potential sectors. Promulgate mechanisms, policies and measures to produce a breakthrough in infrastructure, investment increase in agriculture and rural development. These policies also support farmers to buy insurance for high-yield products which closely associate with farmers’ life and production.

Attach importance to developing driving economic zones, coastal economic areas and industrial and economic zones. Continue to complete and improve planning quality and management planned development and ensure inter-regional planning. Restructure State enterprises, first of all concentrate on strengthening capacity and sustainable development of economic group and State corporation on the basis of reviewing, evaluating, readjusting and reorganizing these organizations. Heighten their self-reliance and responsibility while perfecting management mechanism and stepping up control and supervision of state organizations. Complete legal framework to encourage and develop non-state economic sector.

Third, implement in time policies to ensure social welfare and security, focusing on solving some urgent social and environmental problems. Control and supervise promulgated social welfare and security policies to ensure that they serve the right target groups. Issue new poverty line. Heighten the effectiveness of integrated poverty reduction programmes. Scale up efforts to reduce poverty in regions with high percentage of poor households. Ensure sustainable poverty reduction and eradication. Build roadmap to help ease overload hospitals at the central and provincial levels, especially for specialized hospitals. Discover and provide medical treatment to epidemics. Continue research to complete and improve policies and legal documents concerning people with great merit, and entitled target groups. Increase investment in environment, anti-pollution. Balance investment in overcoming consequences and in disaster preparedness and prevention. Strictly control the issue of permission to exploit minerals, to energy and resources-intensive projects. Permissions are not given to new investment projects which do not meet requirements of environmental protection.

Fourth, speed up administration reform by simplifying procedures, and imposing administrative fines. Uphold individual responsibility and punishing law violations. Continue the pilot project of not organizing People’s Councils at district and ward levels as stipulated in the Resolution No 26/2008/UBTVQH12 of the National Assembly on November 15, 2020 and the Resolution No 724/2009/UBTVQH12 of the Standing Committee of the National Assembly on January 16/2009 until the National Assembly issue new resolution on this issue.

Fifth, consolidate education and build high quality human resource to meet the socio-economic development demands in the new stage. Renovate and complete policies on building human resource, focusing on vocational training to turn out a contingent of trained labor force. Link training with demands for human resource. Coordinate human resource users with training establishments. Step up training though training contract with labour users. Adjust training to meet demands of socio-economic development.

Sixth, consolidate and strengthen national and security potentials. Expand external relations and international integration. Give priority to ensuring resources for building up national defense and security. Implement comprehensive and effective solutions to create synergy for safeguarding national independence, sovereignty, territorial integrity especially sea areas and islands.

Revise and supplement regulations on foreign-invested afforestation projects which belong to the conditional investment project group. Withdraw Investment Licenses of foreign-invested projects in national defense and security sensitive areas. Allocate forest land in these areas to people and armed forces. Associate socio-economic development to national defense and security.

Expend external relations and international cooperation. Create peaceful and stable environment and make full use of foreign-assisted resources to develop and defense the country. Promote international integration and honor international commitment. Bring into play and mobilize resources from the Overseas Vietnamese communities for national development./.

Vo Hong Phuc