VietNamNet Bridge – The Government has issued Resolution 01/NQ-CP on socio-economic management and State budget estimates this year, and one important part of the resolution is the gradual removal of subsidies for State public service units.

The resolution dated January 3, 2015 stipulates that the Ministry of Finance, other ministries and localities should continue improving the financially-dependent mechanism for public service units based on their capacities and human resources as well as services and demand as part of a road map to remove subsidies for these entities.

The Government wants public services to be provided by enterprises of other economic sectors, including healthcare and education that are now controlled by the Government, and a level playing field for providers in both State and non-State sectors.

The State will directly support those in need such as the poor and secure fairness between public and non-public units.

As fund allocation will be replaced by a mechanism of placing orders with the State public service units, ministries and localities should work out a road map for price calculations for public services provided under this form this year.

The resolution requires faster restructuring State-owned enterprises via equitization and capital divestments to help realize the target for SOE equitization in 2014-2015 as approved by the Government.

As targeted, 289 SOEs will have to go public this year after 143 were equitized last year.

The Government also wants the restructuring of the banking system to move on with a focus on enhancing governance and risk management and the restructuring the local stock market to attract investments and support equitization and bad debt settlement.

Banks are required to keep their bad debt ratio below 3% by the end of this year. Besides, it is important to complete a legal framework for the bad debt trading market, encourage local and foreign investors to settle bad debt, enhance the financial capability and role of Vietnam Asset Management Company (VAMC).

Monetary policy will be flexibly executed this year, and interest and exchange rates will be adjusted in tune with macro-economic and inflation developments.

Credit quality and outstanding loan management are also a focus of the resolution.

The State Bank of Vietnam (SBV) and relevant agencies should consider measures to mobilize gold resources to fuel socio-economic development when the market conditions are ripe.

The Government will implement this year’s fiscal policy in a way that strictly limits unnecessary spending in order to minimize overspending.

The Government will also continue drastic measures to control prices, boost exports, restrict trade deficit, and ease hospital overloads.

This year, the Government expected gross domestic product (GDP) to expand by 6.2%, exports by 10% and consumer price index by 5%.

SGT