Mr. Vuong Dinh Hue, Politburo member, Deputy Prime Minister: Need to continuously maintain the financial-budgetary discipline

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2018 has gone by with many imprints and achievements in economic development. Could you, Deputy Prime Minister, please analyze and assess more clearly the economic bright spots in 2018?

Right from the beginning of the year, the Government determined the target set out was to prioritize controlling inflation, stabilizing the macro economy, promoting growth associated with restructuring the economy, improving productivity and quality, efficiency and competitiveness. Facing the complicated fluctuations in domestic and global situations, especially trade wars, risks in international financial and monetary markets, we have followed these closely and proactively responded to give appropriate harmonizing policies, increasing the adaptability of the economy, creating a stable macro environment for socio-economic development.

In the first day of 2018, the Government issued and drastically directed the implementation of Resolution 01/NQ-CP consisting of 9 groups with 56 solutions and 242 specific and comprehensive tasks in all fields, striving to achieve the highest targets.

In particular, right from the beginning of 2018, the Government set out and drastically implemented the motto "Discipline, integrity, action, creativity and efficiency"...

With the Government’s drastic direction and administration, the efforts of ministries, branches, localities, business community, and the people, last year the country completed and exceeded 12/12 targets on socio-economic development according to the Resolution of the National Assembly, in which there were 9 targets exceeding the plan. In particular, the economic sector achieved many outstanding results. The GDP growth increased to 7.08%, exceeding the target set by the National Assembly, doubling the consumer price index, which made the growth more meaningful; credit growth was quite good, focusing on priority areas; the State foreign exchange reserves reached a record of over 60 billion USD. The stock market developed quite stably, capitalization reached about 70% of GDP, equal to the target set for 2020. The gold and foreign currency markets were stable, which overcame a basic step of goldenization, dollarization of the economy.

Vietnam’s stock market was included in the list of follow-ups on the emerging markets, the international credit rating organizations (such as Fich ratings, Moody's...) upgraded Vietnam's credit to BB- and Ba3.

In particular, the total export and import turnover of the whole year reached over 480.16 billion USD, of which Vietnam continuously maintained a trade surplus greater than 7.2 billion USD, the largest one ever before. The structure shifted positively in the direction of reducing raw exports, increasing the proportion of processed and agricultural products and increasing the import of machinery, equipment and materials for production. At the same time, the domestic market focused on development; e-commerce increased on average 30% per year. The market and price management, smuggling prevention, trade fraud were strengthened...

The Government's goals were to achieve rapid economic growth, shorten the gap between Vietnam and other countries but to ensure sustainable growth according to the Party's, the National Assembly’s Resolutions, and the United Nations Sustainable Development Agenda to 2030. Therefore, in 2018 there was comprehensive economic growth in all three sectors of agriculture - industry, construction and services, and the quality of growth was significantly improved. The contribution of the total factor productivity (TFP) was estimated at 43.5%, while the previous period only had reached 33.6%, the labor productivity increased nearly 6% compared to 2017.

In 2018, the Finance sector continued to have many positive changes such as controlling price, public debt, budget revenue-expenditure...,how do you assess the financial and budgetary work last year, Deputy Prime Minister?

The financial and budgetary work in 2018 recognized many efforts of the Finance sector to strive to complete and exceed the targets assigned by the National Assembly and the Government. That was the state budget revenue exceeding 7% of the estimate, corresponding to more than 100,000 billion VND, exceeding the revenue at both the central and local budgets; more sustainable revenue structure; decreasing the proportion of revenue from export and import, crude oil; increasing domestic revenue, accounting for nearly 82% of total state budget revenue. Besides, the inspection, anti-revenue loss, anti-tax arrears, anti-price transfer were paid attention.

The State budget spending was controlled more strictly, economically and efficiently. The State budget deficit was about 3.67% of GDP, lower than the set target (3.7%); the number is expected to be 3.4% by 2020...

In particular, public debt problems were changing positively. From 2015 onwards, the average GDP increased by 6%, but the public debt increased by more than 18%, i.e. the rate of public debt growth was 3 times higher than GDP, and close to the ceiling of 65% in 2015, the pressure to pay debts was high with debt repayment rate accounting for 27.3% of the total budget revenue. Up to now, it was 61.4%, the ratio of Government debt and non-national debt were within the limits of the National Assembly’s Resolution, and the pressure to pay debt was reduced significantly, only about 18% of the total budget revenue.

In addition, the Finance sector continuously improved the institutions on financial policies, in which the Ministry of Finance has submitted to the National Assembly and the Government many laws, resolutions of the National Assembly, Decrees of the Government, Decision of Prime Minister. At the same time, the Ministry of Finance was also very aggressive in organizing and rearranging the apparatus in a streamlined, effective and efficient manner, especially in areas such as Tax, Customs, Treasury ...

Dear Deputy Prime Minister, what are the important reasons for achieving outstanding marks on the economic front in 2018?

This achievement stemmed from many reasons, but I think firstly, in 2018, for the first time, the Government organized the National Conference to implement the conclusions of the Central Government, the Resolution of the National Assembly on the socio-economic development plan in 2018 with the participation of the leaders of the Party, State, Vietnam Fatherland Front, political and social organizations, and especially for the first time, the General Secretary attended and gave a speech. At the same time, the Government also organized many seminars chaired by the Prime Minister and Deputy Prime Ministers to remove difficulties and obstacles in production and business activities, open up resources to promote socio-economic development.

Along with that, there was the drastic and effective implementation of the policy on reducing and simplifying administrative procedures, business conditions and specialized inspection procedures for import and export goods; reviewing and reducing business costs, especially capital costs, BOT fees, expenses for compliance with administrative procedures associated with effective implementation of policies to support business development; Vietnam was evaluated as one of the 10 most strongly committed countries in tax policy reform ...

Along with the efforts of the Government, ministries, branches and localities, it is impossible not to mention the determination and spirit of innovation, creativity, "dare to think, dare to do" of the business community, of every worker in factories, every farmer in fields.

With the efforts in the past year, the competitiveness of the economy increased. In the last 3 years, we got a high position of national competitive environmental ranking, many international organizations have evaluated Vietnam with good prospects, becoming one of the fastest growing economies in the region and the world.

But frankly, our economy still has many shortcomings and difficulties, according to you, Deputy Prime Minister, what are the unsatisfactory points that need to be overcome?

Basically, the important economic indicators in 2018 met and exceeded the plan. However, frankly, there were limitations that need to be overcome. That was the great pressure of inflation and macroeconomic stability. The autonomy of the economy has gradually been raised but has not met the requirements. Besides, disbursing public investment capital, equitizing state-owned enterprises, divesting in many ministries, branches and localities was still slow. The connection with the FDI sector and the capacity and operational efficiency of the domestic business sector, especially small and medium enterprises was limited. Some projects and works were behind schedule with poor quality. There were still shortcomings in mechanisms and policies; the business conditions, administrative procedures in some areas also caused difficulties for people and businesses.

Although many international organizations upgraded our country's rankings in many fields, especially the business environment, the World Economic Forum (WEF) ranked Vietnam's global competitiveness in 2018 by 3 levels lower compared to 2017 (77/140 compared to 74/135 countries and territories). The downgrade was due in part to fundamental changes in the assessment method, but it also showed that the capacity of innovation, research and development of enterprises, high-tech applications, skills... were low and we need to make more efforts to overcome them.

Restructuring the industry and sectors in some places was still confusing, not synchronized, not attached to the market. The labor productivity, competitiveness; localization rate of many sectors and fields was still low. Smuggling, trade frauds, illegal transportation of goods across borders still happened complicatedly...

In 2019, important goals for economic development were approved by the National Assembly, of which the gross domestic product (GDP) increased 6.6 - 6.8%. Recently, General Secretary and State President Nguyen Phu Trong also set out the requirement of economic growth at least equal to 7.08% of 2018. According to Deputy Prime Minister, what are the key solutions in the financial and budgetary field to contribute to achieving the goals set out?

In order to complete and exceed the economic targets of 2019, creating a premise to complete goals for the whole period of 2016-2020, the important solutions are set forth: Continuously consolidating the macro foundation, controlling inflation, improving the business investment environment, promoting economic growth; synchronously and drastically implementing strategic breakthroughs; creating clear changes in economic restructuring, innovating growth model, improving productivity, quality, efficiency and competitiveness...

For the financial-budgetary field, it is necessary to continuously maintain the financial-budgetary discipline; to strengthen management, prevent loss of revenue, tax arrears, and transfer pricing. To thoroughly save and fight wastefulness in state budget spending; to drastically cut spending on meetings, domestic business trips and abroad. To create clear changes in disbursing public investment capital, ordering public services; to strictly implement the legal regulations on bidding, widely apply online bidding, ensure the nature, openness and transparency.

To continuously restructure the state budget in the direction of increasing the proportion of domestic revenues, investment expenditures and reducing the proportion of regular expenditures; reduce state budget deficit; effective management and use the public debt, ensuring its safety. To strengthen management and effective use of public land and assets; effective control of the CPI ...

As you mentioned, the important contribution to economic development in 2018 included great efforts in reforming and simplifying administrative procedures, reducing the time for customs clearance of imports and exports. As the Chairman of the National Steering Committee for ASEAN-ASW Single Window, National Single Window and Trade Facilitation (Steering Committee 1899), how do you evaluate this work in 2018, Deputy Prime Minister?

The Government identified that reforming, simplifying administrative procedures, reducing the time for customs clearance of import and export goods were important solutions in trade facilitation, improving national competitiveness, especially in the context that our country has been deeply involved in international integration.

Under the direction of the Steering Committee 1899, ministries and agencies have made great efforts in implementing NSW, ASW and reforming specialized inspection.

In 2018, for the first time, we organized the online conference on "Promoting NSW, ASW and facilitating trade" with the lead of the Prime Minister; issued the Action Plan to promote NSW, ASW, reformed specialized inspection of exports and imports, and facilitated trade goods for the period 2018-2020.

As a result, 2018 recorded outstanding results, completed 88% (121/138 procedures) compared to the target set for 2020. Typically, the number of administrative procedures connecting NSW in 2018 was the most ever; since 1/1/2018 Vietnam has been 1 of 5 countries in the region implementing ASW; the specialized management has been significantly improved through reducing procedures, product lines; checking, cutting, simplifying 6,776 / 9.926 product lines that need the specialized inspection, equivalent to 68.2%; promoting management from "pre-check" to "post-check" based on application of managing risks, facilitating businesses, cutting business costs for businesses.

An important contribution to the above positive results is the important role of the Ministry of Finance and the General Department of Customs. As the Standing Agency of the National Steering Committee for ASW, NSW and trade facilitation, the General Department of Customs has made great efforts to effectively advise the Government, the National Steering Committee, and at the same time, directly build and operate effectively the National Single Window Portal and related works...

In addition to being downgraded according to the evaluation of the World Economic Forum, according to the 2019 Doing Business Report of the World Bank, although the total score of Vietnam has increased from 66.77 to 68.36, in term of rankings, Vietnam was down one rank, at 69 out of 190 economies. This proved that the recent reforms have not yet met the domestic demand and the reform pace of many countries. According to you, what should Vietnam do to improve this issue, Deputy Prime Minister?

The Government has also recognized this problem and is taking drastic instructions to improve the situation, especially in 2019. Therefore, the Government's content of the socio-economic operating theme in 2019 is "Speeding up", ensuring no leadership positions, public officials and civil servants in the administrative system are still hesitant, afraid of responsibility to perform their public duties.

Accordingly, we need to continuously and drastically improve the business investment environment, improve competitiveness, for speedy inclusion into the group of leading ASEAN countries, towards the standards of developed countries (OECD), further improving Vietnam's ranking.

The Government requires every ministry, branch and locality to have a program and action plan with specific objectives and solutions to quickly increase Vietnam's score and ranking competitiveness, especially those targets are ranked low...

For the implementation of NSW, ASW and trade facilitation, the Steering Committee 1899 required ministries and sectors to continuously grasp the spirit of reducing and simplifying administrative procedures. The reduction, simplification of administrative procedures, business conditions need to avoid formality, cutting out this procedure but creating another procedure, or plug in other documents... At the same time, to create maximum advantages for enterprises but must ensure the requirements of managing and combating trade frauds, protecting legitimate rights and interests of organizations and individuals. Evaluating the efficiency must be measured to save much time and cost of people and businesses. In particular, by 2020, it is necessary to complete the implementation of all administrative procedures for export, import and transit goods; people and transport means entering or transiting through NSW; 100% of administrative procedures that implement NSW are charged fees electronically...

In 2018, in addition to fulfilling the tasks of the Standing Committee of the Steering Committee 1899, the General Department of Customs has made efforts to successfully complete the key tasks, what is your evaluation of the work done by customs last year, Deputy Prime Minister?

In 2018, under the leadership and direction of the Government, directly the Ministry of Finance, the General Department of Customs made efforts and achieved positive results on all fields. Specifically, continuously reforming and simplifying administrative procedures effectively to facilitate import and export activities; improving the efficiency of state management on customs, especially leading in the application of information technology to professional activities.

In 2018, the General Department of Customs also successfully completed the task of collecting state budget when exceeding revenue estimates and targets, making an important contribution to ensuring the national financial potential.

In parallel with the reform of administrative procedures, trade facilitation, the General Department of Customs continues to effectively implement the prevention and combat of smuggling, trade frauds and illegal cross-border goods transportation. Prominently, timely detecting and arresting many prohibited goods such as drugs; weapons; wildlife and plants and its products; effectively handling the problem of waste that not eligible for import... Implementing these tasks effectively will contribute to preventing budget revenue loss, ensuring security and safety of the community.

Thank you, Deputy Prime Minister!