| THE PRIME MINISTER -------- No. 958/QĐ-TTg | THE SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ---------------- Hanoi, July 27, 2012 |
DECISION
APPROVING THE PUBLIC DEBT AND NATIONAL FOREIGN DEBT STRATEGY IN THE PERIOD 2011 – 2020 AND THE ORIENTATION TOWARDS 2030
THE PRIME MINISTER
Pursuant to the Law on Government organization on December 25, 2011;
Pursuant to the Law on Public debt management on June17, 2009;
Pursuant to the Government's Decree No. 79/2010/NĐ-CP on July 14, 2010 on public debt management on June17, 2009;
Pursuant to the Government's Decree No. 118/2008/NĐ-CP of November 27, 2008 on defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
At the proposal of the Minister of Finance,
DECIDES:
Article 1. Approving the public debt and national foreign debt strategy in the period 2011 – 2020 and the orientation towards 2030 as follows:
I. VIEWPOINTS, TARGETS AND SPECIFIC NORMS
1. Viewpoints
The development and implementation of the public debt and national foreign debt strategy in the period 2020 – 2030 and the orientation towards 2030 are attached two the following primary viewpoints:
a) While the capital demand for socio-economic development is increasing that the internal resources is not yet able to satisfy, the capital raised from domestic and foreign loans are necessary and plays an major role.
b) The loans and repayments must be kept within the safety limit of public debts, government debts, national foreign debts and must assure national financial security.
c) Actively innovating public debt management tools, diversifying the loans with reasonable costs, shifting the loan structure towards increasing domestic loans, decreasing foreign loans and limiting Government guarantees
d) The Government shall uniformly manage the mobilization, distribution and use of loans, the repayment of debts, the public debt and national foreign debt management efficiently and safely.
2. Targets
Organizing capital mobilization with appropriate costs and level of risk, satisfying the requirements for balancing State budget and investment in socio-economic development in each period; the distribution and use of loaned capital must be proper and efficient that ensure the solvency; keeping the indices of public debts, government debts, national foreign debts within the safety limit; ensuring the national financial security in accordance with Vietnam’s conditions and international practice.
3. Specific norms
a) Mobilizing capital to satisfy the expenditure demand of the State budget and invest in the programs and projects of building infrastructure, traffic, health, education and key programs under the National Assembly’s Resolution in each period.
- Taking out loans to offset the State budget deficit towards gradually reducing the State budget deficit to under 4.5% of GDP by 2015 (including Government bonds), 4% of GDP over the period 2016 – 2020, and 3% of GDP after 2020.
- Issuing Government bonds to implement the programs for investment in constructions of traffic, irrigation, health and education for the purpose of fundamentally satisfying the bond capital in the period 2011 – 2015 being totally 225,000 billion VND, averagely 45,000 billion VND/year; issuing at least 500,000 billion in the period 2016 - 2020, 350,000 billion VND thereof is invested in development and the rest is used for refinancing.
- Mobilizing 550,000 billion VND of loaned capital, averagely 55,000 billion VND for supporting the execution of the projects of synchronous infrastructural system serving the national industrialization and modernization 2011 – 2012.
- Fulfilling the objectives of investment credit, export credit and State policy credit in a selective manner.
- Municipal loans and repayment for investing in socio-economic development belonging to local budget expenditure must be kept within the line of annual loan as prescribed by the Law on State budget and the Law on Public debt management.
- Assisting enterprises in approaching foreign capital by re-lending programs, and providing Government guarantees for some important programs and projects prioritized by the Government in a reasonable way within the safety limit of public debts approved by the National Assembly.
- The foreign loans taken by enterprises and credit institutions must be kept within the limit of annual national foreign loan decided by the Prime Minister.
b) The list of debts, loan conditions and loan purposes must be adjusted towards increasing domestic debts and gradually reducing the dependence on national foreign debts, improving the efficiency and ensuring the solvency with reasonable costs and level of risks.
- The foreign debt balance of the Government in the total debt balance of the Government may reduce to under 50%, ensuring the minimum ODA debt balance reaching 60% of the total debt balance of the Government in 2020.
- Minimizing the risk of capital redistribution, liquidation, exchange rates, and currency. Formulating a mechanism for expediting the development of the Government bond market and striving to extend the loan term by issuing Government bonds domestically to 4 – 6 years in the period 2011 – 2015, and to 6 - 8 years in the period 2016 - 2020.
- Fulfilling the debt liability, avoiding overdue debt that affecting the Government’s international commitments.
c) Keeping the indices of public debts, government debts and national foreign debts within the safety limit approved by the National Assembly in each period and in conformity with international practice.
- Public debts (including Government debts, debts guaranteed by the Government and municipal debts) may not exceeding 65% of GDP by 2020, the Government debt balance thereof may not exceed 55% of GDP and national foreign debt may not exceed 50% GDP.
- The Government’s direct debt liability (excluding re-lending) in the annual total State budget revenue may not exceed 25%, and the annual national foreign debt liability may not exceed 25% of the total value of exported goods and services.
- The ratio of State reserves if foreign currency to annual short-term foreign debt balance must be sustained at over 200%.
