The PM has approved an overall plan to restructure the economy between now and 2020, particularly credit institutions and State-owned enterprises (SOEs).

Under the plan, State funding would represent 35-40 percent of the total social investment, which is to make up 30-50 percent of the nation’s gross domestic product (GDP) in the coming years.

This is to ensure resources are in place for the country’s continued development.

Major balances of the economy including investment, savings, consumption, State budget, public debt and trade and payment balances need to be maintained at reasonable levels.

About 20-25 percent of State budget spending will be designated for development every year. Capital management methods should be renewed and massive investments should be avoided.

Photo for illustration. vneconomy.vn

The scales for private investments will be expanded for the development of infrastructure and driving economic regions.

The plan aims to boost a market economy, drive social resources into manufacturing competitive products and help form a reasonable economic structure.

It would allow high-tech sectors to gradually replace low-level ones for rapid and sustainable economic growth.

By 2015, the country would focus on cleaning up credit institutions with bad debt treatment being a top priority.

These institutions have to concentrate on their core business, assure payment capacity and enhance transparency in operations.

The credit institution system would be comprehensively restructured to ensure systematic safety, efficiency and sustainability as well as service quality; while State-run banks and commercial joint-stock banks with State controlling stakes would have to prove their driving roles in the system.

Fragile banks would be facilitated for merger and acquisition and foreign lending institutions would be stimulated to equally compete and cooperate in Vietnam.

State-run firms will concentrate on areas such as defence industry, manufacturing essential goods and providing key services and some basic high-tech sectors, and promptly withdraw capital from non-core lines of business.

SOEs will speed up equitisation, apply modern management methods and follow market economy rules, while private economic groups which could be competitive at both domestic and global markets will be encouraged to develop.

The plan affirms that maintaining macro-economic stability is extremely important in the restructuring process. Monetary policies must be carried out cautiously, flexibly, comprehensively and efficiently in order to fulfil the goal of controlling inflation, and ensuring reasonable growth.

Authorities are required to create a better investment environment to attract more development capital and intensify supervision of the market and prices of essential goods, especially electricity, coal and petroleum.

The restructuring of production and service sectors will be accelerated to increase products’ added value and domestic content, with priority given to the development of key economic regions and marine economic centres.

Source: VNA