(VOVworld)- Cabinet members on Sunday proposed a series of solutions to improve the real estate market, and ensure a balance between revenue and spending in order to help the Vietnamese economy recover more quickly and sustainably.
Vietnam’s socio-economic development has been on the right track developing steadily in all areas, but growth has not been as strong as expected. The economic recovery remains weak and unsustainable. Revenues have been lower than planned. The market and purchasing power have seen some improvement but both were weaker than last year and business and production activities are facing new difficulties. The number of enterprises that have suspended their operation is high.
Minister and Head of Government Office Vu Duc Dam |
In this context, the government needs to be more resolute about preventing waste and practicing thrift. Minister and Head of the Government Office Vu Duc Dam said this year’s surplus spending approved by the National Assembly was 4.8% of the GDP. The budget for civil construction was more than 9.2 billion USD (185 trillion VND) in addition to 2.2 billion USD (45 trillion VND) worth of government bonds. It is calculated that 1% increase of surplus spending, the government has another 2 billion USD (40 trillion VND) from the state budge. To achieve an economic growth rate of between 5.5% and 5.8%, the government estimates that 12.7 billion USD (255 trillion dong) is needed for development investment.
In addition to policies on deferring, reducing or delaying taxes to stimulate investment, business and production, it is necessary to prevent and strictly deal with trade frauds and evasion and continue to apply the market price mechanism on essential goods including petroleum, oil and electricity. Minister of Transport Dinh La Thang said:“ It is necessary to resolutely apply the market price mechanism on gas and oil and gas groups. For example, the State has held 60% of Phu My Fertilizer Factory’s equities since it was equitized, but the factory still receives state subsidies. So, the state can only get 60% of its 150 million to 200 million USD (3 to 4 trillion VND) of annual profit. It is not profit from production but from state subsidies. If we are resolute with the market price mechanism, we can collect additional billions of USD (tens of trillions of VND) every year”.
Minister of Construction Trinh Dinh Dung urged localities to convert commercial housing projects to social housing projects, deal effectively with debts in civil construction, and accelerate the disbursement of an aid package worth 1.5 billion USD (30 trillion dong) to stimulate growth. Minister Dung stressed the need to review state investment projects to prevent waste in civil construction: “We need to continue to review investment projects at both central and local levels. To do this, it is necessary to strengthen cooperation between relevant ministries to decide whether projects can continue or should be suspended or adjusted to make them more effective”.
Minister Dung asked the State Bank and relevant ministries and sectors to work with the Ministry of Finance to implement financial and budget tasks, balance revenue and spending, maintain the approved surplus spending, and avoid ineffective investment, bad debts and waste.
In regard to SOEs restructuring, Minister Dam said the government is accelerating the equitisation of SOEs on the basis of transparency and international norms.“There are many types of enterprises in which the State doesn’t need to hold a majority of equity but in the regulation of these enterprises and in law it is stipulated that if the state holds even 1% of the company’s equity, the state has the right to decide. The equitization of SOE doesn’t run counter to our orientations, platforms and the revised 1992 Constitution but makes them more effective in order to fulfill its task of guiding the national economy”.
The effective implementation of the cabinet members’ proposals will contribute to the fulfillment of this year’s targets set by the National Assembly as well as to the recovery of the Vietnamese economy.