Assessing the implementation of financial and budgetary works in the 2001-2005 period at the meeting of the finance sector held in Hanoi on November 23, Vietnam’s Finance Minister Nguyen Sinh Hung affirmed that the financial legal policy and mechanism system has been gradually renewed and improved, contributing to the stabilisation of the macro-economy, the facilitation of the business environment and equality in business, production and exploitation of all resources for investment and development.
National savings were raised from 27.2 per cent of GDP in 2000 to 29.9 per cent in 2005 while the total social investment increased from 32.9 per cent of GDP in 2000 to 38.2 per cent in 2005, exceeding the National Congress’s target of 31-32 per cent of GDP.
Deputy Minister of Finance Tran Van Ta said Vietnam has witnessed various unforeseen difficulties in implementing State budgetary tasks. Natural calamities (droughts, floods and storms) and avian flu return on a large scale has caused huge damage while skyrocketing prices of oil and other key materials have strongly affected the Vietnamese socio-economy. However, all sectors, enterprises and the financial sector have strived to overcome difficulties to excessively fulfil socio-economic targets and State budget and financial targets in 2005. Mr. Ta said that in the first ten months of this year, the financial sector has collected VND167,963 billion (US$10.5 billion) for the State Budget and targeted to rake in VND210,400 billion (US$13.15 billion) for the State Budget in 2005, exceeding 15 per cent of the plan, or VND27,000 billion (US$1.69 billion) and presenting an increase of 16 per cent against 2004. Of this sum, the State-run economic sector contributed VND37,800 billion (US$2.36 billion), up 15.9 per cent against 2004 and the foreign-invested sector made up VND20,500 billion (US$1.28 billion), exceeding 14.2 per cent or VND2,550 billion (US$160 million), of the initial estimation. In 2005, the investment environment continued to improve. The Government has implemented sound policies to attract investment, streamline business-licensing formalities, reduce fees and speed up the roadmap of narrowing price and fee differentials between domestic and foreign investors. Thus, the registered foreign direct investment capital has reached over US$5.3 billion, an increase of 55.8 per cent against 2004.
In addition, import and export activities contributed an estimated VND51,500 billion (US$3.23 billion) to the State coffers in 2005, up 13 per cent on year. This year, import expenses are predicted to reach US$37.3 billion, up 16.9 per cent compared with 2004. Many heavily taxed imports including auto parts and accessories, motorbike components and electronics parts are on the rise. At the same time, export revenues are up 20 per cent.
Mr. Ta said the State Budget expenditures were VND191,110 billion (US$11.95 billion) in the first ten months of this year and are estimated at VND258,470 billion (US$16.15 billion), up 12.5 per cent (VND28,720 billion (US$1.8 billion) compared with initial estimations. Of this total, the expenditure on investment and development are VND83,300 billion (US$5.21 billion), or 10 per cent of GDP. This money is spent on key social and economic infrastructure projects (allocating nearly VND4,000 billion (US$250 million) for construction debts), on important transport and irrigation projects (mobilising VND10,500 billion (US$656.25 million) from government bond sales for these projects and residential resettlement project for the Son La Hydropower Plant), on natural disaster resistance projects, on education-training and social-cultural projects (mobilising VND2,800 billion (US$175 million) from education bond sales to reinforce schools, and on increases in investment for mountainous and remote areas.
According to financial and budgetary goals and tasks in the 2006-2010 period, the Government has submitted a budgetary plan for 2006 to the National Assembly for approval. Accordingly, the State Budget will see an injection of some VND237,900 billion (US$14.87 billion) in 2006, up 13 per cent against 2005. The State Budge expenditures in 2006 are estimated at VND294,400 (US$18.4 billion), up 28 per cent against the estimated expenditure for 2005 and up 13.9 per cent against actual volume in 2005.
In order to realise the above targets, the Ministry of Finance has introduced 19 solutions in five major groups, Ta said. Accordingly, expenditures to speed up urban and land planning and land use right certification will be ensured. The renewal of the real estate management and development mechanism will be researched. Government and education bonds (worth of VND15,000-18,000 (US$0.94-1.13 billion) will be issued to raise money for national key transport and irrigation projects. In addition, the ministry will conduct research on the construction of the tax management law, which will provide liabilities of taxpayers, taxation offices, individuals and organisations. The ministry also cooperate with other organisations to implement the investment and bidding laws after they are ratified by the National Assembly.
Quynh Chi
Vietnamese
