VietNamNet Bridge - According to the Resolution of the cabinet meeting in July 2013, the government agreed to issue a separate resolution on the issuance of international bonds.

Earlier, in the regular session of the Government dated July 30, the Finance Ministry presented the plan to issue Government bonds in the international capital market. "The government discussed and agreed to issue a separate resolution on this issue to implement under the provisions of the law", the Resolution issued on August 7 stated.

Thus, if it is implemented, this will be the third time the government issuing bonds in the international market, following the issuance of $750 million in 2005 and $1 billion in 2010, with the 10-year term.

With $750 million in the first time, the Vietnam Shipbuilding Industry Group (Vinashin) was re-lent, but due to inefficient use of capital, this group now has to perform restructuring. Meanwhile, the $1 billion in the second time in 2010 was invested in the Dung Quat oil refinery. To date, this project is said to operate effectively and ensure solvency.

The issuance of international bonds was mentioned when Vietnam’s public debt is at 54.1 percent of GDP in 2012, according to the government report. However, a report by the National Assembly’s Economic Committee released in May 5 2013 said that if loans by state-owned corporates and groups that are not guaranteed by the government are included, the debts may far exceed this figure.

According to the Vietnam Economic Times, the Ministry of Finance has calculated that for the period 2011-2015, government debts will continue to rise. In particular, foreign loans are estimated at about VND152.7 trillion and domestic loans of about VND868.4 trillion. The total debt payment in the balance of the state budget in this period will be about VND583.6 trillion. The agency has affirmed the outstanding debt balance will be still in the safety limits.

The Ministry of Finance is drafting a decree to set up and operate credit rating agencies in order to increase efficiency for the issuance and use bonds.

At the meeting, the Minister of Planning and Investment submitted to the Government the draft Law on Public Investment, focusing on adjustment of the principle on allocation of investment capital, conditions for capital allocation, authority and responsibility of the decision makers in order to help overcome wasteful and inefficient investment.

Related to the risk of reduction of dozens of trillion dong of the state budget, the government asked the Ministry of Finance to make the plan to balance the state budget in 2013 to submit to the government in August.

Regarding electricity, gas and coal prices, the Ministry of Industry and Trade will make adjustments according to the market prices on the spirit of openness and transparency.

Son Nam