DIRECTIVE

ON ENHANCING THE MANAGEMENT OF THE DEVELOPMENT INVESTMENT PLAN IN THE YEAR 2000

In the recent past, the investment and construction work has been given due care by the ministries, branches and People’s Committees of the provinces and centrally-run cities, which have guided its realization along the objective of the plan. Many sources of capital have been mobilized for development investment. However, the economic restructure has not yet met the need because the resources for development are still limited and there has been a lack of compatibility and uniformity in the directional planning for the areas of priority development; the planning and forecasting of development in each branch and region still show many shortcomings and a high level of subjectivism and voluntarism, and hastiness for development which result in too many priority domains and spearhead projects..., as well as the slow readjustment when many changes have taken place in each domain. On the other hand, in the localities there has developed a tendency to concentrate development investment on those branches which would create major sources of revenue with a view to balancing the local budgets such as beer, cigarettes, cement, sugar... while not paying adequate attention to the balance, the demand of the market and economic efficiency.

With a view to overcoming the above mentioned shortcomings, right in the plan for the year 2000 and in the next five-year plan, capital must be concentrated on the efficacious projects and constructions, those branches and domains having many advantages that can develop the resources and intellect of the Vietnamese...At the same time, we have to carefully reckon with competitiveness in international integration and the change in the demand-supply relations not only in the world and the region but also right on the domestic market.

Pursuant to Decision No. 240/1999/QD-TTg of December 29, 1999 of the Prime Minister on the assignment of the plan targets and the draft State budget for the year 2000, the Prime Minister instructs the ministries, branches, People’s Committees of the provinces and centrally-run cities and Corporations to carry out the following urgent tasks:

1. To continue readjusting the investment structure, to concentrate capital on the projects which are efficient economically and socially, which affect many economic branches and have high export rates.

- Besides devoting an appropriate capital to overcoming the consequences of the floods in the central provinces and other areas we should focus attention on examining and readjusting the plan of building infrastructures in the areas prone to natural disasters, especially storms and floods, aimed at limiting the damage and losses.

- To revise the programs and projects of investment from the State budget, to assure concentrated investment and priority investment according to the objectives of the plan.

The newly started projects in Groups B and C must conform with the branch and regional plans already adopted, must fill all the procedures as currently prescribed. Investment capital must be categorically refused to any project which does not fill in all the prescribed procedures or which does not portend efficacy. The projects that are incorporated into plans must assure the guaranteed sources of capital, concentrated funding and the prescribed progress tempo.

- The allocation of capital for projects in Group B must be concentrated, the time of implementation of a project must not exceed 4 years. Capital allocation to projects in Group C must comply with the principle of adequate investment capital in order to ensure that the projects could be completed within 2 years. To restrict the starting of projects in Group C which are not yet really necessary.

- The sources of budget capital reserved for investment by the ministries, branches, provinces and centrally-run cities must be closely planned and brought into the investment plan right from the beginning of the year.

- To reserve capital to prepare for new investment and continued investment in a number of important projects in the five-year plan 2001-2005 and the subsequent years in the national economic branches.

2. To allocate enough reciprocal capital for the ODA projects aimed at ensuring the tempo agreed in the signed agreements, especially those projects to be completed in the years 2000 and 2001.

3. To amend and supplement immediately the inappropriate stipulations in Decree No. 52/1999/ND- CP of July 8, 1999 on the management of investment in capital construction and Decree No. 88/1999/ND-CP of September 1st, 1999 on the Regulation on Bidding aimed at removing difficulties and obstacles in order to quickly step up the implementation of the investment plan.

4. Where it is necessary to build working offices, the heads of the ministries, branches, the Presidents of the People’s Committees of all levels shall have to calculate and balance the projects within the capabilities of the capital allocated for the construction. If the investment capital falls short of the need, the shortfall must be found by themselves from other legal sources and they shall have to take responsibility for these sources of capital. The construction of working offices must strictly comply with the stipulations on the management of investment and construction.

5. With regard to the credit sources of the State.

- To concentrate these sources on transitional projects in order to increase the production capacity and develop the effect of these projects and increase their competitiveness right in the year 2000.

With regard to the transitional projects including projects in Groups A, B and C which are being implemented at various sources of loan, the investors are allowed to sign new loan contracts with these sources until completion of the projects. The State Bank of Vietnam shall guide the commercial banks to mobilize enough capital for loan as required by the progress tempo of the projects which are taking loans. The State shall continue to apply the system of compensation for the difference in interest rates for the lending organizations according to the real debit balance.

- The projects which have just started shall be divided into two groups: the projects in Group A shall be assigned by the Prime Minister, the projects in Groups B and C shall be announced on the basis of the common orientation for the objects and forms of credit. The investors shall hold detailed discussion with the Development Assistance Fund to sign credit contracts irrespective of economic sectors. To devote an appropriate credit to the sector of medium and small enterprises.

To create favorable conditions for the investors, the investment partners to get access to the source of investment credit of the State right from the beginning of the year, the Development Assistance Fund should stabilize immediately its organizational apparatus for operation, work out the capital mobilization and lending plan, the process of evaluating the financial projects, the borrowing and repayment plan of the investors when starting a new investment plan, announce the result of the evaluation and guide the investors in signing the capital borrowing contracts according to regulations. To make an integrated report on the situation and report monthly to the Prime Minister.

6. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the provinces and centrally-run cities, the chairmen of the Managing Boards and the General Directors of the Corporations shall have to direct and organize the implementation of this Directive and make the monthly, quarterly, biannual and annual reports as prescribed in Decree No. 52/1999/ND-CP of July 8, 1999 of the Government.

In particular for the projects in Group B and Group C belonging to the capital source of the budget, after working out their plans the ministries, branches and localities must send them to the Ministry of Planning and Investment and the Ministry of Finance on February 28, 2000 at the latest in order to monitor, promote and inspect their implementation. The Ministry of Planning and Investment shall assume the prime responsibility and coordinate with the Ministry of Finance, the Ministry of Construction, the State Bank of Vietnam and the Government Office in performing the function of periodically inspecting the investment plans in the branches and localities, ensuring the concentrated investment along the objective of the plan and a rational investment structure.

---------------

This document is handled by Vinas Doc. Document reference purposes only. Any comments, please send to email: [email protected]