Prime Minister Nguyen Tan Dung laid out a series of measures to deal with public debt and bad banking loans by 2020 in his address to lawmakers yesterday.

PM Nguyen Tan Dung.

He told deputies that public debt grew from 51.7 per cent of GDP in 2010 to 60.3 per cent in late 2014. It was predicted to account for 64 per cent of GDP in 2015, and would reach 64.9 per cent of GDP in 2016 which was still within the limit of 65 per cent set by the National Assembly. The rate would then start to fall in the following years.

By 2020, the amount of public debt should be cut to 60.2 per cent of GDP, and Government debt should account for no more than 46.6 per cent of GDP (less than 55 percent of GDP, as regulated), added the PM.

However, the high rate of public debt posed risks to the economy, he said.

"Public loans are essential for the development of socio-economic infrastructure," Dung said. "However, public debt has reached its limit, causing repayment pressures in the short term. A number of investment projects also remain ineffective, corruption and wastefulness still exist and State budget collection has fallen," he said.

In order to cut public debt to 60.2 per cent of GDP and spend approximately 20 per cent of the total State budget on debt repayments by 2020, the Government vowed to restructure and closely monitor its debt portfolio and new loans, including Government and locality backed loans.

Debt owed to foreign lenders was expected to account for 39.9 per cent and 46 per cent of GDP in 2014 and 2020, respectively, which was still lower than the 50 per cent limit. The amount of foreign debt payments due in 2014 accounted for 25.9 per cent of exports of goods and services. The Government would ask the State Bank to closely monitor all short-term loans taken out by credit institutions so that from 2015 onwards, the rate of foreign debt payments would be brought under the regulated limit of 25 per cent of annual exports of goods and services, the PM said.

The expenditure and collection of State budget should be revised towards increased domestic revenue collection, and the Government aimed to increase the contribution of domestic revenue to 80 per cent of the total budget by 2020.

In the meantime, necessary changes to the Laws on State Budget and Public Debt Management, as well as other relevant strategies would be made, making it easier to meet debt repayment deadlines.

"We have ways to address bad debt, but none of those involve mobilising the national budget," Dung said in response to a question raised by Deputy Than Duc Nam from the central city of Da Nang about whether the Government would turn to the national budget to deal with the problem.

Minister of Labour, Invalids and Social Affairs Pham Thi Hai Chuyen

The Government was also determined to improve the standards of its business climate, which were expected to surpass the ASEAN-6 average in 2015.

East Sea issues

Regarding the disputes with China in the East Sea, Deputy Le Nam of the central province of Thanh Hoa asked the Government for its viewpoints on China's illegal constructions on a number of islands which belong to Viet Nam, Dung said China had forcibly occupied the islands of Gac Ma (Johnson South) and Da Chu Thap (Fiery Cross Reef) in Viet Nam's Truong Sa (Spratly) archipelago since 1988.

"Viet Nam strongly opposes the illegal acts of China as they violate Article 5 of the Declaration on the Conduct of Parties in the East Sea (DOC), which was also signed by China," Dung stressed.

He said Viet Nam would act in accordance with the principle of sincere co-operation in its relationship with China in order to protect the country's independence and sovereignty while pursuing peace and stability in the region.

He was responding to a question from Deputy Thich Thanh Quyet about the Government's policies towards China, especially after China's illegal placement of the Haiyang Shiyou 981 oil rig within Viet Nam's continental shelf on May 2.

"We hope that Viet Nam and China can always be at peace and work together to bring prosperity to both countries," Dung said. "Any dispute between the two countries over sea and island sovereignty should be resolved in the respect of the 1982 agreement between the high-level leaders of the two countries. Accordingly, all parties should maintain the status quo and not complicate the situation or use the threat of force to settle disputes."

Employment questions

Minister of Labour, Invalids and Social Affairs Pham Thi Hai Chuyen.

During the morning Q&A session, Minister of Labour, Invalids and Social Affairs Pham Thi Hai Chuyen responded to questions about salary increases, job creation, management of foreign workers and social security.

Many deputies spoke about the need to build a salary increase roadmap to ensure minimum living conditions for workers. Minister Chuyen admitted that the current minimum wage met only 60 per cent of workers' minimum living conditions. She said salaries would be increased to a level that would ensure workers' basic needs for daily life during the 2015-16 period.

The salary increase was delayed due to State budget limitations. However, the National Assembly has approved a resolution that earmarks VND11 trillion (US$523 million) to increase the minimum wage for retirees, public cadres and army officers with low income starting January 1.

Answering deputies' questions about measures to improve human resources, Chuyen said the Prime Minister had approved a human resources development strategy under which 55 per cent of workers would be trained next year and 70 per cent by 2020.

The Government had also approved a master plan to develop 45 high-quality vocational training schools, including 10 meeting international standards, and approved a plan to improve vocational training, she said.

In response to a question from deputy Truong Minh Hoang from the southernmost province of Ca Mau on the ministry's responsibility for the high unemployment rate among university graduates, Chuyen blamed socio-economic difficulties, which forced many businesses to stop operation or go bankrupt while the number of trained workers remained limited. The ministry would work with the Ministry of Education and Training to guide job promotion centres to help young workers find jobs, she said. Additionally, the ministry would work with relevant ministries and agencies to make training relevant to market demand, retrain unemployed university graduates and support those working in remote and mountainous areas.

Deputy Do Thi Hoang from the northern province of Quang Ninh asked for ideas on how to manage foreign workers while many businesses went bankrupt and many university graduates were unemployed. There are currently 78,000 foreign workers in Viet Nam, the majority of whom are skilled workers.

Minister Chuyen said the Government had issued a circular stating that foreign workers needed by businesses in Viet Nam would be allowed to work in the country. However, apart from skilled foreign workers, there were also a number of unskilled foreign labourers.

The ministry was working with the Ministry of Public Security to manage foreign workers in Viet Nam. Those found violating Vietnamese laws and regulations would be strictly punished, she said.

Minister Chuyen also answered queries about ensuring social security for disadvantaged people and those who rendered services to the nation.

VNS/VNN