## _cr06340 — Viet Nam: Growth and Poverty Reduction Annual Progress Report 2004–2005 (selected parts)

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### H3 — Foreword: overview and stated achievements
- Average annual GDP growth during 2001-2005: 7.5%.
- Total social investment compared to GDP: 37.5%/year.
- Industry sector value increased at an approximate average of 15.7%/year.
- Agricultural production annual growth: 5.45%.
- Services sector average growth rate: approximately 6.9%/year.
- Exports: annual increase of the volume of export of 17%.
- Poverty incidence by international criteria: reduced from 37.4% in 1998 down to 24.1% in 2004.
- Foreword priorities:
  - Continue economic reform and mobilize maximum financial resources.
  - Improve competitiveness and effectiveness.
  - Strengthen donor and international organization support.
  - Use report to guide support during 2006-2010.

### H3 — Part I: Evaluation on Growth and Poverty Reduction (2003–2005) — macro and sectoral outcomes
- Aggregate growth and structure
  - Three-year average GDP growth rate: 7.8%.
  - Annual GDP growth rates: 2003: 7.34%; 2004: 7.8%; 2005: about 8.4%.
  - Sector shares of GDP (2005 estimates): Agriculture, forestry and fishery: about 20.7%; Industry: 40.8%; Services: 38.5%.
  - State-owned sector contribution to GDP in 2005: about 38%.
- Sectoral performance (selected figures)
  - Agriculture, forestry and fishery: value increased by an average of 5.5% per year during 2003-2005; food productivity in 2005 over 40 million tones; rice export approximately 4.5 million tones.
  - Industry: average growth rate of industrial production during 2003-2005: 16.4%; industrial production value increased 16.5% in 2005; value-added of industrial and construction sector increased by 10.7% in 2005.
  - Services: average value-added increase during 2003-2005: about 8.1%; services value-added increased 8.4% in 2005.
- External sector and finance
  - Total export value in 2005: about 31.8 billion USD.
  - Average export volume per month in 2005: above 2.6 billion USD.
  - Growth rate of exports in 2005: more than 20%.
  - Total import value in 2005: approximately 37.3 billion USD; imports up 16.7% compared to 2004.
  - Total export value during 2003-2005: USD 78.5 billion.
  - Total import value for 2003-2005: about USD 94.5 billion.
  - Total ODA committed for 2001-2005: 14.7 billion USD; estimated ODA disbursed: about 7.8 billion USD.
  - FDI attracted in registered projects during 2001-2005: more than 18.1 billion USD; total realized FDI: about 13.6 billion USD.
- Public finance and investment
  - Annual average rate of funding mobilization to the State budget: approximately more than 24% of the GDP.
  - Rate of mobilization of investment resources in GDP: 2001: 35.5%; 2003: 37.8%; 2005: 38.2%.
  - Total investment utilized in 2003-2005 (price level 2000): approximately 642.2 thousand billion VND.
  - Investment resource shares (2003-2005 totals): State budget 22.5%; State credit and social investment 13.3%; State-owned enterprises 18.3%; Population (household) 26.6%; FDI 16.6%; Other sources 2.7%.
- Poverty, employment and human capital
  - National poverty rate (national poverty line 2001-2005): 2001: 17.5%; 2004: 8.3%; 2005: 7%.
  - Poverty incidence by international (MDG) standard: 1993: 58.1%; 2004: 24.1%.
  - Employment created during 2003-2005: 4.7 million (average more than 1.5 million per year); jobs created in 2005: 1.6 million.
  - Proportion of workforce (2005): Agriculture 57%; Industry and construction 18%; Services 25%.
  - Education and health indicators (selected): under-five malnutrition rate 2004: 26.6%; estimated 2005: 25%; rate of complete vaccination (2004): 93.3%; estimated 2005: >95.
- Key constraints highlighted
  - Modest economic scale, low competitiveness, slow and low-quality structural adjustment.
  - High production costs due to imported inputs, low domestic value capture in manufacturing exports.
  - Technology and human resource skill gaps.
  - Infrastructure insufficiencies and environmental pollution.

### H3 — Part II: Implementation of incentive policies (2004–2005) — reforms and policy measures
- Legal and institutional reforms
  - Major legal actions: amendments and new laws (examples cited): amended Law on State Enterprises; amended Law on Land; Law on Competition; Law on Labour; amendments in tax laws (VAT reduced to 3 rates 0%, 5%, 10%; corporate income tax reduced from 32% to 28%).
  - Draft laws submitted: Law on Investment, Law on Enterprises, Law on Bidding, Law on Anti-Corruption, Law on Savings and Waste Prevention.
- Market development and SOE reform
  - Capital market and non-banking financial mechanisms developing.
  - SOE restructuring: in 2005, 730 enterprises classified and more than 600 enterprises equitized; target projects and pilot equitizations noted.
  - Equitization measures under Decree number 187/2004/ND-CP to increase transparency and auction sale mechanisms.
- Macroeconomic management
  - Fiscal targets: control budget deficit below 5% of the GDP; Government’s debts surplus about 36% of the GDP at end-2005; national debts surplus about 32% of the GDP.
  - Monetary policy: emphasis on macro stability, inflation control, flexible interest rate and reserve management; compulsory reserves increased for below 12 month deposits.
  - CPI: increased 9.5% in 2004 and estimated 8% in 2005.
- Investment and FDI promotion
  - Directive No 13/CT-TTg dated April 8, 2005 on measures to attract FDI; administrative reforms to speed project approvals and land procedures; personal income tax for foreigners adjusted (declined to 40% with the level of taxed income risen to above 5 millions).
- Trade and export support
  - Measures: VAT exemption for export goods, preferential credit programs, Export Assistance Credit Fund, market development directives, tariff rate quota management, export promotion programs.
  - International integration: concluded bilateral negotiations with multiple WTO members; ongoing WTO accession engagements.

### H3 — Part II: Infrastructure, environment and governance — investments, safeguards and constraints
- Investment priorities and measured capacity increases (2005)
  - Electricity supplies increased by 1,075 MW.
  - Coal increased by 0.8 million tons/year.
  - Rolled steel increased by 600,000 tons.
  - Cement increased by 3.2 million tons.
  - Irrigation capacity increased by 150,000 ha; drainage capacity increased by 60,000 ha.
  - New forest plantations: 200,000 ha.
  - Construction/rehabilitation of national roads: 2,484 km; rural roads: 26,191 km.
- Resource mobilization for large-scale infrastructure
  - Ministry of Transportation invested in 22 projects with total investment of 54,000 billion VND; BOT enterprises contracted significant shares in completed and ongoing projects.
  - Prime Minister Decision 182/2003/QD-TTg ratified investment for 38 projects total 71,640 billion VND; State budget contribution 7,832 billion VND; mobilized through Government bonds: 63,064 billion VND.
  - Anticipated bond issuance to meet needs: equivalent value of 110.000 billion VND (due to cost escalations).
  - Footnote breakdown of needed funding: Transportation projects 76,035 billion VND; Irrigation projects 22,080 billion VND; Displacement costs 8,085 billion VND.
- Environmental and social safeguards
  - Decree 16/2005/ND-CP requires environmental impact analysis and assessments as part of investment construction project reports.
  - Social safeguards: compensation principles for displaced households; training assistance and job priority for affected agricultural workforces.
  - Enforcement gaps: environmental/social impact reports often neglected by investors; penalties for non-submission noted (fee ranges from 1 to 2 million VND).
- Infrastructure constraints and preservation needs
  - Preservation/restoration funding increased from 592 billion VND in 2002 to 946 billion VND in 2004 but covers only 45.9% of needs.
  - Risks if funding unchanged: in next 10 years road degradation projected with 34% severely damaged; proportion of good road reduced to 10% (*).
  - Suggested measures: increase preservation funding, fully calculate fees/incomes, incorporate preservation costs into operations, mobilize non-budget sources.

### H3 — Part II: Social policies, poverty-targeted programs and results (2001–2005)
- National target programs and direct support
  - Concessionary credit by Bank of Social Policies: by 31 December 2005 about 3.2 million households given loans; average credit 3.6 million VND per household (up from 2.2 million VND in 2001).
  - By 30 September 2005 total credit given by the Bank of Social Policies: 16,590 billion VND; 81% (13,375 billion VND) given to poor households.
  - State subsidy for interest rate gap: 1,782 billion VND. Overdue debt proportion: 4%.
  - Estimated coverage: about 75% of poor households, or 15.8% of households nationwide, are given loans.
- Small-scale projects and settlement outcomes
  - Total funding for specified small-scale projects: 170 billion VND (9% central State budget).
  - Income of project households increased by 16-19% annually; 19-20% of project households escaped poverty.
  - Settlement projects: 311 billion VND spent to relocate 106,000 households (631,000 people).
  - Housing assistance: by December 2004, 293,137 poor households assisted; estimated by end-2005 350,000 houses repaired/reconstructed.
- Program 135 and ethnic/minority outcomes
  - More than 25,000 infrastructure facilities built; 498 communal clusters developed; more than 95% of extremely disadvantaged communes have autoroutes connected to communal centres.
  - Poverty rate in extremely disadvantaged communes reduced from 50-60% to 23.1% on average; average poverty reduction more than 5% per year in many areas.
  - Coverage of direct assistance to ethnic minority households: about 140,000 households in 42 provinces during 2001-2005.
- Education and health targeted support
  - Education: annually over 3 million poor and ethnic students given fee exemption/reduction; 2.5 million ethnic poor pupils receive textbooks and notebooks worth over 100 billion VND.
  - Health (Decision 139): in 2001-2004, 14 million poor patients given free diagnosis and treatment; total fund for poor patient treatment in 2003-2005: 2,304 billion VND.
  - Implementation weaknesses: slow identification of beneficiaries, delays in issuing health insurance cards, refunding problems, limited quality at commune level; only 8.9% commune health stations refund treatment expenditure to patients with health insurance cards (national survey).

### H3 — Part III: CPRGS implementation process — capacity building, planning and M&E
- Capacity building and pilot activities
  - MPI and CPRGS Inter-Ministerial Working Group conducted training, seminars and pilot planning at district/commune/village levels to introduce planning tools (pairwise comparison, issue trees, SWOT).
  - Manual on intertwining CPRGS with local socio-economic plans drafted; seminar held November 14, 2005 for inputs.
  - Pilot MTEF prepared with Ministry of Finance and pilot ministries/provinces (Ministry of Training and Education, Ministry of Health, Ministry of Transportation and Communication; Ha Noi, Phu Tho, Binh Duong and Vinh Long).
- Public consultation and plan formulation
  - Renovations per Directive #33/2004/CT-TTg included adding social and poverty reduction contents to 2006-2010 plan.
  - Public consultations held in Hanoi, Ho Chi Minh city, Da Nang and selected provinces; consultations with donors and NGOs.
- M&E improvements and statistical foundations
  - Statistical Law and Decree 40/2004/ND-CP to strengthen legal environment.
  - National statistical indicator system to be submitted to Prime Minister in 2005.
  - VDD 1990-2003 and VietInfo 4.0 (DevInfo 4.0) used to provide MDG and VDG indicator database.
  - Poverty line for 2006-2010 plan defined jointly by MOLISA and GSO and approved by Prime Minister to ensure nationwide consistency.
- Key implementation challenges noted
  - Awareness and ownership gaps among ministries and localities in integrating CPRGS.
  - Capacity shortfalls in planning staff, especially at provincial/district/commune levels.
  - Insufficient and uneven central support and lack of local dynamism; localities sometimes wait for central/donor support.

### H3 — Part IV: Challenges and solutions for 2006–2010 — targets, policy directions and M&E
- Strategic goals and targets (2006–2010)
  - Overall objective: accelerate growth, improve economic efficiency and sustainability, escape low-income status, and establish foundations for industrialization and modernization.
  - Income projection/aim: raise GDP per capita from "640 currently" to "950-1000 USD in 1010" (text preserved as in source).
  - Note: some projections expect low-income country criterion in 2010 to rise to 900 USD per capita; Vietnam can achieve middle-income with GDP per capita of 1,050-1,100 USD.
- Poverty reduction target (new poverty line)
  - Contribute to reduce the poverty incidence from 22% in 2005 to 10-11% in 2010 (new poverty line).
  - Proposed program pillars:
    - Access to production services (incentive credits, land allocation, job training, infrastructure upgrades).
    - Access to social services (health care, education, housing, water).
    - Capacity building for civil servants, information diffusion, strengthened monitoring and evaluation.
  - Targeting and modalities:
    - More resources to poor communes in mountainous areas based on the number of poor people and poverty index.
    - Facilitate people’s participation; provide direct state support (medical insurance cards, fee exemptions); decentralize implementation authority.
- Implementation arrangements and lead responsibilities (2006–2010)
  - MPI: lead coordination on resource mobilization, balances, and formulation of the consolidated 5-year plan.
  - MOF: coordinate resource mobilization, national financial balance, government/national debt planning.
  - GSO: define planned and calculated indicators for quality guidance in formulation of 5-year plans.
  - Ministries/sectors and People’s Committees: formulate sectoral and local 5-year plans and execute monitoring and reporting.
- M&E and statistical arrangements (selected indicators)
  - Economic growth targets: Economic growth %: 7.8 (2004), 8.4 (Estimated 2005).
  - Export-import (selected): Total export turnover Bil. USD: 26.5 (2004), 31.8 (Estimated 2005); Total import turnover Bil. USD: 32.0 (2004), 37.3 (Estimated 2005).
  - Social targets (selected): Proportion of poor households (old standards) %: 8.3 (2004), 7 (Estimated 2005); Under-five malnutrition rate %: 26.6 (2004), 25 (Estimated 2005); Proportion of communes with health care stations %: 99 (2004), 100 (Estimated 2005).
  - Jobs: Create jobs for about 1.4 to 1.5 million people/year; Mil. People: 1.56 (2004), 1.6 (Estimated 2005).

### H3 — Selected quantitative tables and indicator series (high-frequency reference items)
- Annual GDP growth series: 2001 6.9; 2002 7.08; 2003 7.34; 2004 7.8; Est. 2005 8.4.
- Export and import series (US$ million):
  - Total export turnover: 2001 15,029; 2002 16,706; 2003 20,149; 2004 26,500; Est. 2005 31,800.
  - Total import turnover: 2001 16,218; 2002 19,745; 2003 25,227; 2004 32,000; Est. 2005 37,300.
- Investment mobilization and composition (Total social development investment capital, current price):
  - Total (Thou. bil. VND): 2001 170.5; 2002 199.1; 2003 231.6; 2004 275; Est. 2005 320.
  - % GDP: 2001 35.4; 2002 37.2; 2003 37.8; 2004 38.4; Est. 2005 38.2.
  - Investment by private sector and the public (Thou. Bil. VND): 2001 38.5; 2002 52.1; 2003 68.7; 2004 82.0; Est. 2005 105.0.
- Poverty and social outcomes (selected regional and national snapshots)
  - Poverty incidence by national line (regional table for 2005 as reported by provinces in August 2005): North Eastern 8.0; North West 12.0; Red River Delta 5.15; Northern Central 10.50; Southern Central Coast 8.0; Central Highlands 11.0; Southern East 1.70; Mekong Delta 6.78; National 7.0.
  - According to the new poverty line, by end-2005 whole country has approximately 3.9 million poor households.

### H3 — Policy recommendations and implementation priorities (as stated)
- Continue and deepen Doi moi, structural adjustment and SOE equitization with transparency and market rules.
- Mobilize domestic resources (including those “lying hidden within the people”) and external resources (ODA, FDI) for infrastructure and poverty-reduction investments.
- Improve competitiveness: technology transfer, reduction of production costs, human capital upgrading, and promotion of high value-added services.
- Strengthen legal framework: complete and enforce laws on Investment, Enterprises, Bidding, Anti-Corruption, Competition, Planning, and Statistical Law to support M&E.
- Improve planning, MTEF adoption, and results-based M&E: enhance local capacity, public consultation, and data/statistical systems (VietInfo, VDD) for MDGs and VDGs monitoring.
- Prioritize poverty-targeted measures: incentive credit, land allocation, job training, health and education access, infrastructure for extremely poor communes, and strengthened targeting and decentralization.
- Reinforce environmental safeguards and integrate environmental impact assessment in project appraisal and approval; allocate budgetary resources for preservation and restoration of infrastructure.

*Source: _cr06340 — Viet Nam Growth and Poverty Reduction Annual Progress Report 2004–2005 (excerpts compiled from FOREWORD, Part I, Part II, Part III, Part IV as provided).*

### FOREWORD

### FOREWORD

### Overview and recent achievements
- Viet Nam has adopted effective policies and measures to accelerate its economic growth rate and to reduce poverty, aligned with the Five year Socio-economic Development Plan 2001-2005.
- Achievements credited to efforts of line ministries and agencies, all level authorities, and international donors and organizations.
- Economic growth and poverty reduction outcomes described as "encouraging and notable"; economy described as remaining at high speed and stable with advancing competitiveness and effectiveness.
- Social sectors (training and education, science and technology, health care, culture) continue development momentum with "positive changes".
- Poverty reduction: "Remarkable results have been seen in poverty reduction, poverty incidence reduces sharply, and people life has been improved step by step."

### Key quantitative outcomes and sectoral performance (as stated)
- Total social investment compared to GDP: 37.5%/year.
- Average annual GDP growth during 2001-2005: 7.5%.
- Industry sector value increased at an approximate average of 15.7%/year.
- Agricultural production annual growth: 5.45%.
- Services sector average growth rate: approximately 6.9%/year.
- Exports: annual increase of the volume of export of 17%.
- Poverty incidence by international criteria: reduced from 37.4% in 1998 down to 24.1% in 2004.

### Drivers and policy context
- Achievements attributed to reform policies undertaken across sectors and progressive establishment of a socialist-oriented market economy mechanism.
- New mechanisms and policies promulgated to create an appropriate legal framework to promote growth, realize social objectives, and protect the environment.
- Emphasis on mobilizing significant funding for economic growth and poverty reduction.

### Remaining weaknesses and challenges
- Viet Nam remains a low-income country with a small economy, underdeveloped technology, high production costs, and low competitiveness.
- Economic development is "not fully sustained" and competitiveness and effectiveness "is still low".
- Structural reform of the economy remains slow and the socialist-oriented market economy mechanism is not yet finalized.
- Social sector issues include:
  - Degrading quality of education and training.
  - Scientific and technological research not meeting development requirements.
  - Low incomes and living conditions, especially in rural and natural-disaster areas.
  - Persistent social problems and high number of traffic accidents.
  - Slow administrative reform and instability of social security in certain areas.
- The country needs to "push up its reform process", maximize resources for growth, improve effectiveness and competitiveness, and secure further cooperation and assistance from the international donor community and organizations.

### Report purpose and structure
- The annual report "Viet Nam, economic growth and poverty reduction" 2004-2005 updates, analyses, and evaluates Viet Nam’s economic and poverty reduction achievements under the Comprehensive Poverty Reduction and Growth Strategy (CPRGS), and evaluates CPRGS implementation for 2003-2005.
- The report is organized into four main parts:
  - Part I: Evaluation on growth and poverty reduction of 2004-2005 and overall evaluation for the period 2003-2005.
  - Part II: The implementation of incentive policies to promote growth and poverty reduction in 2004-2005.
  - Part III: CPRGS implementation process of 2004-2005 (capacity building, planning, monitoring, challenges, recommendations).
  - Part IV: Challenges and solutions to growth and poverty reduction for 2006-2010 and the implementation (goals, targets, policies, M&E, implementation arrangements).

### Forward-looking priorities (as indicated)
- Continue economic reform and mobilize maximum financial resources for socio-economic development.
- Take efficient measures to improve competitiveness.
- Strengthen support from donor community and international organizations.
- Use the report as a reference for organizations, individuals, donors, and international organizations to guide support during the next five-year period, 2006-2010.

Minister of Planning and Investment
- Vo Hong Phuc

*Source: FOREWORD, _cr06340 - FOREWORD*

### Part  III.  The  process  of  implementing  the  Comprehensive  Poverty

### Part  III.  The  process  of  implementing  the  Comprehensive  Poverty Reduction and Growth Strategy

### Purpose and scope of Part III
- Describe activities, contents and results of the process of implementation of the Comprehensive Poverty Reduction and Growth Strategy in different sectors and levels, particularly at the grassroots level.
- Highlight difficulties, challenges, and basic advantages of the country in realizing objectives of growth, hunger elimination and poverty reduction.
- Provide recommendations for implementation of the Strategy in the years to come.

### Process, responsibilities, and contributors
- The Chief of the Inter-Ministerial Working Group on CPRGS has elaborated and is responsible for the content of this Report.
- Editing team includes: Mr. Nguyen Buu Quyen (Director, MPI), Ms. Dinh Thi Chinh (Department of National Economic Issues - MPI), Ms. Pham Lan Huong (Deputy Head - CIEM).
- Comments and contributions made by multiple officials from MOLISA, GSO, CIEM, State Committee for Ethnics, MOHA, MOT, GO, MOH, MONRE, SBV, MOF, MPI and others as listed in the Report.
- Contact provided for comments: The CPRGS Working Group, No. 2 Hoang Van Thu, Ha Noi or email: cprgs@mpi.gov.vn.

### Context for 2005 and overall evaluation approach (Part I excerpt)
- 2005 is the last year of the Five-Year Social Economic Development Plan (2001-2005) and key for implementing the country’s development objectives in that plan.
- National and international context in 2005 provided both opportunities and challenges: improved production capacity and economic structure; increased attractiveness for foreign investors; but also international political complexities, competitive pressures, unusual weather (drought in early 2005 in Central Highlands and Central South), re-emergence of avian influenza, power shortages, and rising petroleum and raw material prices.

### Major economic achievements in 2005
- GDP quarterly increases:
  - GDP in the first quarter increased to 7.31%.
  - GDP increased to 7.87% in the second quarter.
  - GDP increased to 9.9% in the third quarter.
  - It is expected that in the fourth quarter of 2005, it will increase to over 8.9%.
  - The expected economic growth rate for the whole year is approximately 8.4%, representing an increase of 0.6% compared to 2004.
- Sectoral growth and production:
  - The growth rate of the total value of production of the agricultural, forestry and fishery sector reaches 5.2% per year.
  - Growth rates by subsector: agricultural 4.1%, forestry 1.1%, fishery 10.4%.
  - The average growth rate of the value-added of these three sectors is approximately 4.1% per year (set target 3.8%).
  - Industrial production: output of the industrial sector increased about 16.5%, representing an increase of 0.5% compared to the set target.
    - Output increases by enterprise type: public enterprises increased about 10.5%; private enterprises increased 23.5%; foreign investment enterprises increased about 16%.
    - The value-added of the industrial and construction sector increased by 10.7% per year (set target 10.5-11%).
  - Services sector: value-added increased 8.4%, surpassing 0.2% compared to the set target. High value-added services (banking and insurance) developed rapidly.
- Macroeconomic balances and finance:
  - Total savings account of 2005 compared to 2004 has increased above 7%.
  - Consumption per capita increased approximately 6%/year.
  - The rate of budget mobilization represents approximately 25% of the GDP.
  - The ratio of investment funds mobilized in the GDP is up to 38.2%.
  - Domestic source of investment represents more than 70% of total sources of investment.
- Trade and external sector:
  - Total volume of export attains about 31.8 billion USD.
  - The average export volume is above 2.6 billion USD per month.
  - The growth rate of exports is more than 20%, surpassing 4% compared to the set plan.
  - The value of exports per capita in 2005 is more than 380 USD.
  - The value of imports in 2005 reached approximately 37.3 billion USD, representing an increase of 16.7% compared to 2004.
  - FDI enterprises imported 13.4 billion USD, which represents 35.9% of the total import volume and an increase of 20.9% compared to 2004.

### Tabled economic targets and realizations (as presented)
- Economic targets (Planned targets in 2005 / Estimated realization in 2005):
  - (1) GDP Growth rate: 8.5 / 8.4
  - In which:
    - Agricultural, forestry and fishery sector: 3.8 / 4.1
    - Industrial and construction sector: 11 / 10.7
    - Services sector: 8.2 / 8.4
  - (2) Export value growth rate: 16 / 20

### Significant social and poverty-reduction results in 2005
- Education and training:
  - Primary education system continues to develop.
  - By the end of 2005, it is expected that 31 provinces will fulfil the criteria of universalizing the lower secondary education.
  - Investment for the education sector represented 16% of the total investments from the State budget in 2003; this figure increased to 18% in 2005.
- Science and technology:
  - Focus on applied research to respond to structural adjustment, reduce production costs, increase product quality and competitiveness.
  - Science and technology potential and human resource knowledge levels have been progressively improved.
- Labor and employment:
  - Policies enacted: amended Labor Code; amended Tax Revenue Law; policies encouraging enterprises (including FDI) to recruit labor; vocational training policies; linkages between job creation and socio-economic programs; support for traditional craft villages; labor displacement and export promotion policies.
  - Jobs created in 2005: 1.6 million jobs.
    - Composition (text as presented): about 82 hundred thousand people work for the agricultural, forestry and fishery sector, while 38 hundred thousand work for the industrial and construction sector and 40 hundred thousand work for the services and commerce sectors.
- Hunger elimination and poverty reduction programs:
  - Implementation of preferential credit programs, land allocation to the poor, assistance in health and education, funds for medical services and education assistance to poor students.
  - By the end of 2005, the rate of poor households, taking as a basis the old poverty line, has been reduced to 7%.
- Health and public health care:
  - More than 90% of children under 1 year old have been vaccinated with the complete 6 categories of vaccines.
  - The rate of contracting and children mortality associated with these 6 diseases have decreased remarkably.
  - The rate of under-nourished children under 5 years old has been reduced from 34% in 2000 to 25% in 2005.
- Family planning and child protection:
  - Inter-ministerial mechanism created to resolve children related issues (vagabond children, abuse, delinquency, drug use, children having HIV/AIDS).
  - Continued improvements in children’s health.

### Tabled social targets and realizations (as presented)
- Social targets (Unit / Plan in 2005 / Estimated realization in 2005):
  - (1) Annual new job creation (Million persons): 1.6 / 1.6
  - (2) The rate of poor households (set against the old poverty line) (%): 7 / 7
  - (3) Reduction of the birth rate (%): 0.04 / 0.04
  - (4) The rate of people living in the rural areas that have access to clean water (%): 62 / 62

### Challenges and policy focus areas highlighted
- Remaining challenges include:
  - Domestic production structure not keeping pace with rapid demand fluctuations in domestic and international markets.
  - Low international competitiveness and increasing regional and global competition.
  - Natural hazards (drought, forest fires) and public health risks (avian influenza).
  - Energy shortages and rising international commodity prices affecting production efficiency.
  - Persistent social issues in remote, isolated and disaster-prone areas.
- Policy emphases going forward:
  - Continue proactive implementation of Doi moi and structural adjustment measures.
  - Mobilize domestic resources to increase investment in infrastructure and priority sectors.
  - Mainstream hunger elimination and poverty reduction objectives across ministries and local plans.
  - Strengthen monitoring and evaluation of plan implementation and task arrangement among line ministries and agencies.

*Compiled from the CPRGS Annual Progress Report (Vietnam) — Part III and Part I excerpts contained in the provided content.*

### Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005...

### Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005

### Overall economic performance (2003–2005)
- Three-year average GDP growth rate: 7.8%.
- Annual GDP growth rates: 2003: 7.34%, 2004: 7.8%, 2005: about 8.4%.
- Contribution to average annual economic growth rate for 2001-2005: 7.5%.
- Sectoral GDP contributions:
  - Agriculture, forestry and fishery share of GDP: 2000: 24.5%, 2003: 22.5%, 2005: about 20.7%.
  - Industry contribution: 2000: 36.7%, 2003: 39.5%, 2005: 40.8%.
  - Services contribution: stable at 38.3%.
- Regional contribution: three key economic regions contribute about 55.8% of national GDP value.
- State-owned sector contribution to GDP in 2005: about 38%.

### Sectoral performance and structural change
- Agriculture, forestry and fishery:
  - Value of products increased by an average of 5.5% per year during 2003-2005.
  - Rural economic structure diversified; farmers’ revenues improved in many regions.
- Industry:
  - Clear development, structural adjustment, technological renovation and emergence of pioneer and high-technology sectors.
  - Average growth rate of industrial production during 2003-2005: 16.4% (target in Five-Year Plan: 13%).
- Services:
  - More responsive to production and household demands.
  - Average value increase during 2003-2005: about 8.1%.

### Public finance, investment and resource mobilization
- Annual average rate of funding mobilization to the State budget: approximately more than 24% of the GDP.
- Annual rate of State budget revenue increase exceeds the sum of economic growth rate and price increase rate.
- Rate of mobilization of investment resources in GDP:
  - 2001: 35.5%
  - 2003: 37.8%
  - 2005: 38.2%
- Total investment utilized in 2003-2005 (price level 2000): approximately 642.2 thousand billion VND, accounting for 67% of total realized investment in 2001-2005.
- Investment resource shares (respective for 2003-2005 total utilized investment):
  - State budget: 22.5%
  - Total social investment and State credit resources: 13.3%
  - State-owned enterprises: 18.3%
  - Population (household) contribution: 26.6%
  - FDI: 16.6%
  - Other sources: 2.7%
- Domestic resources: over 70% of total investment (accounts for 24-25% of the GDP).

### External economic relations, trade, ODA and FDI
- Total export value during 2003-2005: USD 78.5 billion (70.8% of total export value during 2001-2005).
- Export value per capita in 2005: approximately 380 USD.
- Total import value for 2003-2005: about USD 94.5 billion (72% of targeted import value of Five-Year Plan), of which FDI enterprises imported 33.3 billion USD.
- ODA:
  - Total ODA committed for 5 years (2001-2005): 14.7 billion USD.
  - ODA committed during 2003-2005: 9.47 billion USD.
  - ODA made official: about 11 billion USD.
  - Estimated ODA disbursed: about 7.8 billion USD, of which about USD 4.7 billion disbursed in 2003-2005.
- FDI:
  - Attracted more than 18.1 billion USD of FDI in registered projects during 2001-2005, surpassing set target by about 20%.
  - Total realized FDI during 2001-2005: about 13.6 billion USD.

### Table of core development targets and outcomes (2003–2005)
- Economic growth (%):
  - 2003: 7.34
  - 2004: 7.8
  - 2005: 8.4
- Growth by sector (%):
  - Agriculture, forestry and fishery: 2003: 3.6, 2004: 4.4, 2005: 4.1
  - Industry and construction: 2003: 10.5, 2004: 10.2, 2005: 10.7
  - Services: 2003: 6.5, 2004: 7.3, 2005: 8.4
- Economic structure growth rates (%):
  - Agriculture, forestry and fishery: 2003: 5.5, 2004: 5.8, 2005: 5.2
  - Industry and construction: 2003: 16.8, 2004: 16.0, 2005: 16.5
  - Services: 2003: 7.4, 2004: 8.2, 2005: 8.7
- Trade values (Million USD):
  - Total export value: 2003: 20,149; 2004: 26,500; 2005: 31,800
  - Total import value: 2003: 25,256; 2004: 32,000; 2005: 37,300

### Social development, poverty reduction and human capital
- Education and training:
  - Basic, under-graduated education and vocational training continued to develop; universalization of lower secondary education being actively implemented.
  - Investment and infrastructure for education and vocational training increasing yearly; scale of universities, colleges, professional secondary schools and vocational centers expanding.
- Science and technology:
  - Scale and effectiveness improved; State budget for science and technology increased; technology transfer among enterprises promoted.
- Employment:
  - Employment created during 2003-2005: 4.7 million (average more than 1.5 million per year).
  - Private sector employment share: about 91% of total workforce and 90% of new jobs.
  - Labor under contract increased from 20.6% in 2001 to nearly 25% in 2004.
  - Percentage of utilized working hours in agriculture: 2001: 74.3%, 2005: 80%.
  - Urban unemployment rate: 2001: 6.3%, 2005: 5.5%.
- Poverty reduction and infrastructure for poor areas:
  - National poverty rate: 2001: 17.5%, 2005: 7% (National poverty line of 2001-2005).
  - Average annual reduction in poverty incidence: 2-2.5% per year ≡ 300-310 thousand households per year.
  - Commune infrastructure coverage:
    - 56% of communes equipped with 8 essential infrastructures as regulated.
    - 70% of communes have 5 essential infrastructures.
    - 100% of communes of 30/49 provinces have auto-routes leading to the central area of the commune.
    - 143 groups of communes basically completed with many essential infrastructure elements.
- Health and population:
  - Average longevity: 71.3.
  - Rate of malnourished children in 2005: 25%.
  - Infant mortality rate and maternal mortality rate improved considerably.
  - Medical insurance introduced and progressively showing advantages; free health care services provided to the poor and to children under 6 years old.
- Culture and information:
  - Cultural, communication, radio and television activities oriented to isolated and remote areas and areas with ethnic minorities.
  - Movements to fortify cultural life at local level (cultural villages, cultural districts, cultural communes...) accelerated.
  - Preservation and promotion of traditional cultural values, including ethnic minority heritages.

### Competitiveness and enterprise development
- Improvements at three levels: national, enterprise and product/service.
  - National: macroeconomic stability, optimized regional and sector advantages, maintained political and social stability.
  - Enterprise: improved material and technical infrastructure; many enterprises renewed production, restructured, applied management standards (ISO 9000, SA 8000).
  - Product/service: efforts to cut production and management costs per unit, improve design, and promote marketing and brand strategies.
- World Economic Forum ranking note (as reported):
  - In 2003, Vietnam’s economic growth competitiveness ranked 60 amongst 102 countries (above the Philippines 66, Russia 70, Indonesia 72).
  - Using reference group of 80 countries (2002 report), Vietnam ranked 56 in 2003 (upgraded 6 ranks).

### Social challenges and remaining weaknesses (introductory)
- Despite encouraging achievements in economic development and social sectors (hunger elimination, poverty reduction, job creation, education, health care), remaining issues and weaknesses persist, including concerns about the quality of growth.

*Source: Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005*

### Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005...

### Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005

### Macroeconomic and structural constraints
- The macro-balances of the economy "is still restraint," limiting the ability to restructure the economy.
- Economy characterized by: modest scale, low competitiveness, slow and low-quality structural adjustment.
- Embezzlement and wasteful use of public funds are common, especially in construction and investment.
- Market development is slow and non-uniform; the market has not yet become the driving factor for production.
- Pressing issues remain across sectors from education and training, health care to cultural and social activities; heavy pollution persists.

### 2.1 Agricultural production and rural economic development
Findings and trends
- New development objectives: strongly develop agricultural production, diversify the rural economy, increase income and ameliorate people's life.
- Shift in production structure from low-value to high-value plants and animals; from oversupplied products to products with larger and more stable consumption markets.
- Land reallocation: part of land converted from low-productivity rice to aqua products and industrial plants (Central Highlands and South East emphasis); Northern mountainous areas restructuring land use and crop species.
- Material zones adjusted (sugar cane, cotton, tea, rubber, paper-related plants) linked with industrial processing zones to create jobs and increase incomes.
- Value of agricultural, forestry and fishery production in 2005 increased 5.2% per year, with subcomponents: agriculture 4.1%, forestry 1.1%, fishery 10.4%.
- Over 2003-2005 agricultural production increased continuously: 2003 overall increase 5.5% (agriculture 4.5%, forestry 1.1%, fishery 10.7%); 2004 increases: agriculture 4.3%, forestry 0.9%, fishery 13.1%.
- Food productivity in 2005 reached over 40 million tones, contributing to national food security and exporting approximately 4.5 million tones of rice.
- Breeding sector average increase over 2003-2005: over 7.4%; breeding represented approximately 20.2% of net agricultural value.
- Forestry: in 2005, 200 thousand hectares of forest cultivated; land covered by forests rose to 37.8%.
- Fishery productivity nearly 3.3 million tones in 2005, representing an increase of 7.2% compared to 2004; catching productivity 1.94 million tones; cultivation productivity 1.36 million tones.
- Fishery contributes over 21% to the total value of the agricultural, forestry and fishery sector.

Rural economy structure and infrastructure
- Rural diversification: share of industry in rural economy increased to 0.6%; share of services increased by 4 percentage points; share of pure agricultural, forestry and fishery activities decreased 10 percentage points.
- Farming models adapted regionally; craft villages restored and developed, attracting workforce.
- Infrastructure by end-2005: over 94.3% of communes has power; 60% of communes has a post and cultural center; most communes have a medical clinic and primary school; 84.5% of communes has a lower secondary school; 94.5% of communes has traffic roads to commune centers/groups; rural population access to clean water is 62%.
- Rural income composition: incomes from industrial production/small scale industry account for 8%; incomes from other rural services account for 12%.

Constraints and weaknesses
- Agriculture still relies on traditional/outdated cultivation methods; modern methods not widely introduced; productivity and quality remain low and climate/weather-dependent.
- Pure agricultural activities account for 60% of total rural economic structure; cultivation nearly 80% of total agricultural value; breeding only over 20%.
- Rural working time utilized about 80%; productivity still low; some agricultural products difficult to sell.
- Restructuring toward modernization/industrialization is slow, voluntary and dispersed; production costs in agriculture remain high; share of high-technology and environmentally friendly agricultural products very modest.
- Rural infrastructure improvements insufficient for industrialization/modernization needs; employment remains a burning issue; environmental pollution in craft villages unresolved; production-by-order models and organized supply chains not yet scaled.

### 2.2 Industrial production
Growth and composition
- Industrial production value increased 16.5% in 2005.
- During 2003-2005 the average annual industrial production growth rate was 16.4%; value-added of whole sector increased only by 10%.
- Exports: industrial goods represent an average of 75% of total export value; light industrial and small-scale industrial goods account for more than 40% of export value.
- In 2005 industrial production by economic components: State-owned enterprises increased 10.5% and accounted for 40.1% of total industrial production value; private sector share rose from 18.7% in 2004 to 23.5% in 2005; FDI enterprises growth rate was 16%.
- Processing industry value increased rapidly, accounting for 82% of total industrial production value.
- Power, gas, water production and mining account for 17% of total industrial production value.
- Over 110 industrial and processing zones established nationwide; three key economic regions contributed over 70% of total value-added of the country’s industry.

Constraints and weaknesses
- Despite high growth, quality and effectiveness restrained: intermediate costs too high, especially for manufacturing goods (apparels, leather and shoes, exported woods) that rely on imported raw materials causing low domestic value capture.
- Technology level low; most equipment and machinery outdated relative to regional peers; percentage of modern technologies applied is very modest.
- Human resource quality low, especially for high-skill industries; productivity low compared to regional countries; production costs high and product quality needs improvement, weakening competitiveness.

### 2.3 Services sector
Performance indicators (Table 4)
- Growth rate of the added value of the whole sector: 2003 6.5%; 2004 7.3%; 2005 8.4%.
- Growth rate of total retailed goods: 2003 10.5%; 2004 18.2%; 2005 20.7%.
- Total number of international tourists (Thousand people): 2003 2,429; 2004 2,928; 2005 3,200.
- Total number of domestic tourists (Thousand people): 2003 13,000; 2004 13,600; 2005 15,000.
- Growth rate of the volume of goods in transaction: 2003 8.1%; 2004 10.3%; 2005 10.6%.
- Growth rate of the volume of passengers: 2003 11.2%; 2004 11.1%; 2005 11.4%.
- Number of fixed phone lines per 100 inhabitants (Phone line): 2003 9.0; 2004 12.6; 2005 17.0.
- Number of communes with telephone lines (%): 2003 93.5; 2004 98.0; 2005 100.0.
- Source for table: MPI.

Sectoral developments
- Added value of services sector increased 8.4% in 2005.
- Commerce, transportation, post and telecommunication, tourism, catering and hotel services grew rapidly.
- High value-added services such as banking and insurance experienced leapfrog growth; banking services value-added increased about 9.3% in 2005.
- Total number of international tourists in 2005 reached 3.2 millions, increasing more than 9% compared to 2004.
- Domestic tourists in 2005 reached more than 15 millions, representing an increase of 10.3%.
- Tourist sector social revenues increased more than 15%.
- Volume of goods transported in 2005 increased about 10.6% per year; volume of passengers increased 11.4% per year; maritime transhipped goods volume increased about 16%.
- Telecommunication: in 2005, 3.86 million new handsets sold, total handsets nearly 14.2 million (cell phones accounted for 50.6%); teledensity reached 17 telephones per 100 inhabitants; total revenue of sector increased an average of 17.7% per year.

Constraints and weaknesses
- Services sector development still slow; has not fully exploited potential, especially for production/trading-support services and high value-added services; contribution to GDP maintained above 38% in many years.
- Quality of services has room for improvement; costs and fees often inappropriate and higher than regional comparators (e.g., maritime services, goods transportation, warehousing, telecommunication).
- Urban infrastructure under-developed; rush-hour bottlenecks persist in big cities.
- High value-added services progress still slow despite rapid recent growth.
- Transportation accidents reduced but remain urgent; more effective measures needed.

### 2.4 Import-export
- Vietnam’s import-export activities continued to develop strongly despite technical barriers, market access challenges, and competitiveness issues in price and quality.
- Growth rates: 2004 growth rate 31.5%; 2005 growth rate 20%.
- Total value of import-export for 2003-2005 reached 78.45 billion USD, representing 70% of the five-year plan.

*Viet Nam Growth and reduction of poverty annual progress report of 2004 - 2005*

### Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005...

### Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005

### Exports: growth and composition
- The average rhythm of growth of export during the three year period was about 24% per year.
- FDI enterprises (excluding crude oil) exported 25.8 billion USD.
- If the export of crude oil is included, the total value of export would be 43.2 billion USD.
- The average export value per capita was approximately 380 USD.
- Main export products that increased considerably: coffee, rubber, cashew nuts, pepper, aqua-products, fruits and vegetables, apparels, footwear, coal, electronics and electronic components.
- Contribution of agricultural, forestry and fishery products to export value:
  - 25.1% in 2003
  - 23.4% in 2004
  - 23% in 2005
- Contribution of industrial goods (including heavy and light industrial goods, as well as small-scale industrial goods) to export value:
  - 74.9% in 2003
  - 76.6% in 2004
  - 77% in 2005
- Until 2005, apparel and crude oil were the two products with export values exceeding over 5 billion USD.
- Five other products with export values exceeding 1 billion USD: aquaculture, footwear, electronics, wood products and rice.
- Vietnam’s world rankings among exporters noted:
  - Second largest exporter of rice and coffee
  - Largest exporter of pepper
  - Third largest exporter of cashew nuts

### Imports and trade flows
- Total import value in 2005 reached more than 37.3 billion USD, increasing 16.7% compared to 2004.
- Import value for 2003-2005 is estimated to 94.5 billion USD, accounting for 80% of the total import value of the five-year plan 2001-2005.
- Imports of FDI enterprises during 2003-2005: approximately 33.3 billion USD, representing 34.7% of the import value during the last three years.
- Growth rate of import value by year:
  - 2003: 27.8%
  - 2004: 26.5%
  - 2005: 16.7%
- Import structure shares during the last three years:
  - Machineries, equipment as well as accessories: 31-32% of total import value
  - Raw materials and fuels: 61-62%
  - Consumption goods: 6%
- Import surplus during 2003-2005 reached approximately 16.3 billion USD, representing 20.8% of the total import value of the three-year period.

### Trade challenges and structural issues
- Vietnam products face harsh competition, an increasing number of trade disputes and complex technical barriers.
- Competitiveness restrained by limitations in suppliers, manufacturing process and product quality; certain markets do not accept Vietnamese products.
- Import structure has changed slowly; export rate of raw materials remains high.
- Most exports are manufactured goods (apparels, footwear, electronics and computer components), but majority of raw materials are imported, reducing value-added of exports.
- Scale of exports remains small; export value per capita is low compared to countries in the region.
- Export growth is not stable and depends largely on world price fluctuations.
- Export goods with a value higher than 1 billion USD are rare; export-oriented industries need further investment.
- Export goods are produced at a small scale; restoration and re-organization of traditional handicraft product manufacturing centers are carried out slowly.

### Hunger elimination and poverty reduction outcomes
- Poverty incidence (measured against the national poverty line of 2001-2005):
  - 17% in 2000
  - 8.3% in 2004
  - 7% in 2005
- Vietnam achieved its target of hunger elimination and poverty reduction for the period 2001-2005 one year earlier than set in the plan.
- By end-2004, out of 64 provinces and cities:
  - 2 provinces do not longer have poor households
  - 18 provinces have a poverty incidence ranking from 3-5%
  - 24 provinces have a poverty incidence of 5-10%
  - 3 provinces have a poverty incidence from 15-20%
  - 2 provinces have a poverty incidence of above 20%
- Progress on Millennium Development Goals (MDG) on poverty reduction:
  - Reduced number of poor households from 58.1% in 1993 to 24.1% (measured against the international poverty line) in 2004
  - Praised as one of the countries with the highest rate of poverty reduction
- For 2005:
  - The average income of the 20% poorest households multiplied by 1.5 times compared to 2001.
  - The average expenditure of this group increased 8-9% during the period 2002-2005.
- Note on inequality:
  - Gap between rich and poor is widening, but widening rate during 2002-2004 is lower than 1993-2002 because poorer regions have higher poverty reduction rates.
  - Poverty reduction rate in 2005 slowed to 1.3 percentage points compared to 2.7 percentage points in 2004.

### Regional poverty incidence and counts (national poverty line of 2001-2005)
- Table: Percentage of poor households in 2000; Number of poor households in 2004; Percentage of poor households in 2004; Percentage of poor households in 2005
  - 1. North Eastern: 22.35; 179,872; 10.36; 8.0
  - 2. North West: 33.96; 81,986; 14.88; 12.0
  - 3. Red River Delta: 9.76; 289,647; 6.13; 5.15
  - 4. Northern Central: 25.64; 302,431; 13.23; 10.50
  - 5. Southern Central Coast: 22.34; 164,289; 9.56; 8.0
  - 6. Central Highlands: 24.90; 111,508; 13.03; 11.0
  - 7. Southern East: 8.88; 58,222; 2.25; 1.70
  - 8. Mekong Delta: 14.18; 228,047; 7.40; 6.78
  - National: 17.18; 1,416,002; 8.30; 7.0
- Source: Ministry of Labor, Invalids and Social Affairs
- Remarks: The 2005 data are provided by reports of provinces in August 2005.
- According to the new poverty line, by the end of 2005, the whole country has approximately 3.9 million poor households.
- Regions with highest rate of poor households: North Western and Central Highlands (38%).
- Region with lowest rate of poor households: South East region (9%).

### Employment creation and labor market developments
- During 2001-2005, 7.5 million jobs have been created.
- Average growth rate of job creation: 4.4% per year.
- National target: create 1.7 million jobs and export approximately 290 thousand labours and experts (2.3 times higher than that of 2000).
- Repatriation funds of the exported workforce reached 1.5 billion USD annually.
- In 2004 and 2005 combined, 3.1 million jobs were generated, exceeding national targets (which were 600 jobs and exporting about 140 thousand workforce).
- Note: The new poverty line was set by the Prime Minister in the Resolution 170/2005/QD-TTg issued on July 8th, 2005.

### Employment statistics and indicators (2000-2004 period)
- Table: Targets and indicators by year (Unit and values)
  - Total number of employment per year (Million psne): 2000: 36.2; 2001: 37.6; 2002: 38.7; 2003: 41.1; 2004: 42.3
  - Total number of employment out of the State-owned sector (Million psne): 2000: 32.3; 2001: 33.6; 2002: 34.9; 2003: 35.0; 2004: -
  - Total new jobs created per year (Million psne): 2000: 1.2; 2001: 1.4; 2002: 1.6; 2003: 1.5; 2004: 1.5
  - Percentage of trained labours/total number of employment (%): 2000: 15.4; 2001: 16.8; 2002: 18.7; 2003: 21.2; 2004: 25.5
  - Percentage of working hours utilized out of the total number of people in the working age in the rural area (%): 2000: 74.2; 2001: 74.3; 2002: 75.4; 2003: 77.5; 2004: 78.3
  - Percentage of unemployed labour in the working age in the rural area (%): 2000: 6.42; 2001: 6.28; 2002: 6.01; 2003: 5.78; 2004: 5.60
- Source: Ministry of Labor, Invalids and Social Affairs

### Labor structure, wages, and vocational training
- In 2004, out of 42.4 million employed workforce nationwide:
  - 58.6% worked mainly in the agricultural, forestry and fishery sector
  - 17.4% worked mainly for the industrial and construction sector
  - 24% worked mainly for the services sector
  - 10.3% worked for the state economic sector
  - 88.2% worked for the private sector
  - 1.5% worked for the FDI sector
- In 2005:
  - Proportion of workforce in agricultural sector: 57%
  - Industrial and construction sector: 18%
  - Services sector: 25%
- Proportion of employees working under a labour contract: about 25%.
- Salary policy:
  - Monetizing the salary; defining salary on the basis of workforce value.
  - Minimum salary level adjusted according to economic growth rate and supply-demand of labour.
  - Salary and income attached to productivity and effectiveness.
  - Salary reform paired with adjustment of social security policies; contributed to stabilize life of thousand insurers and ensure social equity.
- Vocational training:
  - By June 2005, 236 vocational training schools established (increasing 94 schools compared to 2000).
  - 404 training centers and 839 establishments provide training services.
  - During 2001-2005, 5,326 million people have received vocational training courses (text states "5326 million people"; preserved exactly).
  - Number of trained labour reached 25% in 2005.

### Education and training: access and enrollment
- 2004-2005 school year: number of educational and training establishments at all levels increased; non-public establishments developed rapidly.
- Non-public high school increase: 55.4%, representing 29.3% of total number of high schools.
- Approximately 10.100 kindergartens nationwide; all communes have a kindergarten.
- 2004-2005 kindergarten attendance:
  - Nationwide: Day nursery 16.0%; Kindergarten 62.6%
  - Red River Delta: Day nursery 36.8%; Kindergarten 82.5%
  - North Eastern: Day nursery 17.1%; Kindergarten 67.1%
  - North Western: Day nursery 13.2%; Kindergarten 61.9%
  - Northern Central: Day nursery 17.2%; Kindergarten 72.5%
  - Southern Central Coast: Day nursery 8.8%; Kindergarten 58.5%
  - Central Highlands: Day nursery 5.4%; Kindergarten 52.9%
  - South Eastern: Day nursery 12.6%; Kindergarten 62.6%
  - Mekong Delta: Day nursery 5.3%; Kindergarten 49.5%
- Source: Department of Kindergarten, Ministry of Education and training
- Kindergarten and preschool figures for 2004-2005:
  - Number of children attending kindergarten nationwide: about 2.6 millions
  - Rate of children under 3 year old attending classes: 16%
  - Ratio of children from 3-6 year old enrolled in classes: 62.6%
- Elementary education (2004-2005 school year):
  - Total children attending elementary education nationwide: 17.25 million
  - Primary education: 7.77 millions
  - Lower secondary education: 6.67 millions
  - Higher secondary education: 2.8 millions
- Trends and rates:
  - Primary school pupil numbers decreased and stabilized due to universalization of primary education and reduction of birth rate (average reduction rate: 3.7% per year).
  - 2003-2004 school year: rate of children attending school at the right age reached 94.43%; rate of pupils graduating from primary school was 99.82%.
  - Enrollment in lower secondary school increased with average 3.7% per year.
  - 2003-2004 school year: rate of children attending school at the right age for lower secondary reached 76.9% compared to 2000-2001.
  - Number of pupils enrolled in higher secondary education increased strongly in 1998-2004 (average 11.6% per year).

### Regional pupil numbers and growth rates (2003-2005 and 1998-2004 averages)
- Table: Number of pupils in 2003-2005 period and annual average growth rate 1998-2004
  - Nationwide: Total 17,246,299; Primary 7,773,484; Lower secondary 6,670,714; Higher secondary 2,802,101; Lower secondary edu. growth 3.7; Higher secondary edu. growth 11.6
  - Red River Delta: Total 3,465,616; Primary 1,383,042; Lower secondary 1,413,872; Higher secondary 668,702; Lower secondary edu. growth 2.5; Higher secondary edu. growth 9.9
  - North Eastern: Total 2,100,980; Primary 909,998; Lower secondary 830,901; Higher secondary 360,081; Lower secondary edu. growth -0.2; Higher secondary edu. growth 6.7
  - North Western: Primary 577,023; Lower secondary 304,655; Higher secondary 200,929; Higher secondary 71,439; Lower secondary edu. growth 8.8; Higher secondary edu. growth 22.0
  - Northern Central: Total 2,594,359; Primary 1,068,544; Lower secondary 1,078,057; Higher secondary 447,758; Lower secondary edu. growth 4.2; Higher secondary edu. growth 16.2
  - Southern Central Coast: Total 1,593,873; Primary 707,362; Lower secondary 633,700; Higher secondary 252,811; Lower secondary edu. growth 5.6; Higher secondary edu. growth 10.4
  - Central Highlands: Total 1,224,644; Primary 641,113; Lower secondary 422,958; Higher secondary 160,573; Lower secondary edu. growth 23.1; Higher secondary edu. growth 41.9
  - South Eastern: Total 2,496,531; Primary 1,188,369; Lower secondary 911,637; Higher secondary 396,525; Lower secondary edu. growth 1.8; Higher secondary edu. growth 8.0
  - Mekong Delta: Total 3,193,273; Primary 1,570,401; Lower secondary 1,178,660; Higher secondary 444,212; Lower secondary edu. growth 4.5; Higher secondary edu. growth 13.2
- Source: Department of Planning and Finance, Ministry of Education and training

### Enrollment rates and literacy
- Rate of school enrollment at the right age (primary, lower secondary, higher secondary) for selected years:
  - 1993: Primary 86.7; Lower secondary 30.1; Higher secondary 7.2
  - 1998: Primary 91.0; Lower secondary 61.7; Higher secondary 72.1
  - 2002: Primary 90.1; Lower secondary 72.1; Higher secondary 41.8
  - 2003: Primary 94.4; Lower secondary 76.9
- Source: Vietnam Development Report; General Reports of Donors to Vietnam, Hanoi, 23/12/2003
- Literacy rate among population above the age of 10 (%):
  - 1993: Overall 86.6; Men 93.6; Women 82.4
  - 1998: Overall 89.5; Men 93.6; Women 85.6
  - 2002: Overall 92.1; Men 95.1; Women 89.3
- Source: Survey on people’s living standards from 1992-1993; 1997-1998 and 2001-2002. The General Statistic Office, 2004

### Education outcomes and completion
- Rate of enrollment in elementary school increased from 86% in 1999 to 91% in 2003.
- Dropout rate reduced from 12% to 3%.
- Rate failing to pass the class decreased from 9% to below 5%.
- Rate of completing elementary schools increased from 47% to 75%.
- Rate of graduating primary education and entering lower secondary education increased from 78% to 88%; majority of children complete 9 years of elementary school.

*Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005*

### Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005...

### Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005...

### Education and vocational training
- Enrolment in long-term vocational schools: average increase of 12% per year.
- Total students receiving vocational training in the 2003-2004 school year (including vocational centers, regular educational centers, community-based educational centers, vocational courses, universities, colleges and high schools with vocational training): 2 million.
- Industrial high schools: 194,268 new recruits in the 2003-2004 school years, representing a 290% increase compared with 1998-1999.
- University students per 10,000 people: 118 in 2000, 128 in 2002, and 134 in 2004.
- Literacy:
  - Literacy rate among women under the age of 40 (2002 Survey on people’s living standards and households): 94%.
  - Literacy rate for women from ethnic minorities (same survey): 75%.
- Ethnic minority education infrastructure (as reported):
  - 11 central-level ethnic boarding schools.
  - 44 province-level ethnic boarding schools.
  - 295 district-level ethnic boarding schools.
  - Around 500 community-based semi-boarding schools in 25 provinces.
- Ethnic minority pupils (2003-2004 school year) as percent of total pupils:
  - Primary level: 17.7%.
  - Secondary level: 13.3%.
  - High school level: 8.6%.
  - Overall primary school pupils from ethnic minorities: 15% of total primary pupils.
- Urban–rural literacy change: survey results indicate the literacy rate in Vietnam’s rural area increased by 6.2% in 1998, greater than urban area increase of 2.2%.

### Healthcare and public healthcare services
- Coverage and staffing:
  - 100% of communes and wards have had healthcare practitioners.
  - Over 93% of healthcare stations have midwives or paediatrician nurses.
  - By end-2004, over 65% of healthcare stations have had doctors.
  - Over 79% of villages and hamlets had healthcare practitioners.
- Service volumes:
  - Commune- and ward-level healthcare network provides examination and treatment for 60 million patients per year, of whom 2.5 million are in-patients.
  - District-level healthcare network ensures over 60% of patients throughout the country receive examination and treatment.
- Medical technologies and traditional medicine:
  - New technologies applied: heart operation, camera operation, viscera transplant and tube insemination.
  - Traditional medicine: 70% of central-level provinces and cities have traditional medicine hospitals; nearly 50% of hospitals and general hospitals have traditional medicine faculties or sections.
  - Domestically produced medicines account for over 40% of the total value of medicine nationwide.
- Disease control and prevention:
  - Bubonic, cholera and malaria brought under control or eradicated; SARS (2002) and H5N1 avian flu (2004–2005) successfully brought under control.
  - From 2004 to date, no infection or death caused by bubonic epidemic.
- Vaccination and preventable disease outcomes:
  - Over 90% of babies under one year old are vaccinated with 6 basic vaccines.
  - In 2004:
    - Number of patients infected with diarrhoea dropped by 77%.
    - Typhoid cases reduced from 16,000–30,000 cases (2001) and 9,000–23,000 deaths (2001) to 3,425 cases and no death in 2003.
    - Liver infection virus cases dropped by 22% compared to 2001.
    - Brain virus infection cases stood at 2,380 with a death toll of 121 in 2004, increasing 22.7% and 6.1% respectively compared to 2003; long-term control to a certain extent achieved.
- HIV/AIDS and tuberculosis (as of September 2005 and 2000–2005):
  - Number of HIV infected patients nationwide in September 2005: over 99.700, of which 16.300 have developed AIDS and 9,300 already killed.
  - Number of newly infected tuberculosis patients in the community from 2000 to 2005: 100,000.
- Pharmaceutical management:
  - Medicine prices stabilized in 2004 following Government and Ministry of Public Healthcare coordination.
- Table 11: The realization of healthcare targets (Realizations in 2004; Estimation in 2005 where provided)
  - Average longevity (age): 71.3; Estimation in 2005: 70.0
  - The infant mortality rate < 1 year old (%): 18.0; Estimation in 2005: 30.0
  - The infant mortality rate < 5 year old (%): 32.8; Estimation in 2005: 37.0
  - Rate of newly born weighed < 2500 gr (%): 7.0; Estimation in 2005: <7
  - Rate of malnourished children<5 year old (%): 26.6; Estimation in 2005: 25
  - Maternal mortality rate (above 100.000): 85; Estimation in 2005: 80
  - Rate of complete vaccination (%): 93.3; Estimation in 2005: >95
  - Rate of communes that have a doctor (%): 65.4; Estimation in 2005: >65
  - Rate of communes that have maternity clinic (%): 93.1; Estimation in 2005: 100
  - Rate of communes that have a medical staff (%): 93.3; Estimation in 2005: 100
  - Rate of doctor per 10.000 inhabitants: 5.88; Estimation in 2005: 7
  - (Source: MPI)

### Family planning, population and children care
- Reproductive health strategy implementation (October 2000–end-2004):
  - Implemented in 28,530 communes in far and remote mountainous areas, islands, flood-prone and densely populated areas across 64 provinces and cities.
  - Focus on three service packages: family planning, safe motherhood, and prevention of reproductive tract infections.
  - Strategy impacted 13.8 million women at reproductive ages and more than 544,722 pregnant women.
  - In 2005, implemented in 7,647 communes in 58 provinces and cities.
- Management information systems:
  - Fundamental information on population, family planning and children care recorded and updated regularly at commune, district and ward levels.
- Demonstration models introduced:
  - Pre-marriage medical examination and counselling.
  - Community-level improvements of population’s quality.
  - Information, population, reproductive health and family planning services for teenagers and adolescents in 28 provinces and cities (covering 126 communes).
- Integration with sustainable family development:
  - Project expanded from 4 provinces in 2001 to 64 provinces/cities by 2005.
  - 4,147 groups established, helping more than 100,000 households in 828 communes in 167 districts/towns nationwide.
- Demographic and health outcomes:
  - Total fertility: 2004 average children per woman at reproductive age: 2.2 (decreased from 3.8 in the past); trend toward replacement birth rate of 2.1.
  - Population growth rate: 1.53% in 2000; 1.44% in 2004; estimated 1.37% in 2005.
  - Obstetrical complications reduced by 52% after 10 years.
  - Maternal mortality rate reduced from 1% in 1998 to 0.85% in 2004.
  - Under-one mortality rate: 26%o in 2001 to 18%o in 2004; estimated less than 18%o in 2005 (beyond planned target of 30% for 2005).
  - Under-five mortality rate: 42%o in 2000 to 32.8%o in 2004; expected 30%o in 2005 (target 36%o in 2005).
  - Malnutrition ratio of under-five children (by weight): 31.9% in 2001 to 26.6% in 2004; estimated less than 25% thereafter.
  - Ratio of underweight newborn babies (<2500 g): 8% in 2000 to 6.5% in 2003; program target of 7% in 2005 satisfied.
  - Incidence of goitre among 8 to 12 year old children: 23% in 1996 to less than 6% in 2004; expected less than 5% by end-2005.

### Natural resources, environment and sustainable development
- Forest cover and biodiversity:
  - Forest cover increased from 37.1% in 2001 to 37.8% in 2005.
  - National parks and wildlife reserves account for about 8% of the total land area.
  - 126 natural reserves recognized as world natural heritage, international biosphere reserves, or ASEAN natural heritage (report notes many recognized).
- Water and sanitation:
  - More than 700,000 water supply facilities, including over 4.6 thousand concentrated water supply systems.
  - Rural water supply coverage: 54% in 2003; increased to 62% in 2005.
  - In 2003, about 5 million rural households (41% of the total number) had hygienic latrines/toilets.
  - By 2005, rural areas met the MDG target (2015) for doubling the number of people having access to clean water supplies.
- Waste management:
  - Collection and treatment of solid wastes improved; average rate about 65% and increasing.
  - Waste recycling remains largely spontaneous by private units and not yet widely adopted.

### Cultural, information and sports activities
- Cultural life and participation:
  - Ratio of cultural households increased from 60% in 2003 to 80% in 2005.
  - Attention to conservation and development of cultural heritages; some recognized as world heritage.
- Media and publications (by 2005):
  - Number of published books: 4.2 per capita.
  - Number of newspapers: 8.4 per capita per year.
  - About 90% of households have access to central television.
  - 95% of households have access to the national broadcasting radio (targets of the 9th Party Congress).
- Sports:
  - Continued massive and extensive development of sports.
  - Strengthened physical facilities and campaigns on physical education and fitness in localities, schools and the armed forces.
  - Good progress in well-performed sports and promotion of new sports to enhance national and international achievements.

### Socio-economic development for poor and ethnic minority areas
- Program 135 implementation and infrastructure:
  - More than 25,000 infrastructure facilities built.
  - 498 communal clusters developed in extremely disadvantaged communes under Program 135.
  - More than 20,000 essential structures and 200 communal clusters put into operation.
  - About 95% of extremely disadvantaged communes have autoroutes connected to communal centres.
  - Nearly 50% (context truncated in source at page end) of the extremely disadvantaged communes reached further infrastructure milestones (text ends mid-sentence).

*Source: Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005...*

### Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005...

### Part I: Evaluation on Growth and Poverty Reduction of 2004 - 2005...

### Ethnic minorities, Program 135, and social services
- Communes with basic services and education:
  - More than 95% of the communes have semi-permanent schools.
  - 84.5% of them have secondary schools providing opportunities for 90 - 95% of children at schooling ages.
  - 91% of the communes have achieved the standards of universal primary education.
- Health and social services:
  - The commune/hamlet medical network is quickly developed; most communes provided with health care stations, equipment and facilities; essential and popular medicines and drugs are available in the sufficient amount.
  - Ethnic minorities have been provided with initial health care services; dangerous diseases have been controlled and stamped out, especially HIV/AIDS prevention and control activities are informed even to the grassroots level.
  - 88% of the communes have electricity, 75% have post offices, more than 60% have broadcasting stations.
  - 18 newspapers and magazines are provided free of charge to the extremely disadvantaged communes.
- Poverty and livelihoods outcomes under Program 135:
  - In extremely disadvantaged communes, the rate of poor households has quickly reduced from 50-60% to 23.1%.
  - On the average, the poverty rate is reduced by more than 5% every year (even 7-9% in some areas).
  - In ethnic minorities areas, in general there are not any more households suffering from chronical hunger.
  - More than 50% of the communes under Program 135 have achieved the poverty rate of less than 25%.
  - Poverty rate was reduced to less than 15% in 2004 in some extremely disadvantaged communes (examples listed: Tuyen Quang, Lang Son, Hai Phong, Ba Ria - Vung Tau, Lam Dong, Binh Phuoc, Tay Ninh, Long An, An Giang, Kien Giang).
- Institutional and social impacts:
  - Program 135 contributed to improved living standards, educational/knowledge level, qualification of grassroots-level staff in ethnic minority areas.
  - The Program strengthened and completed grassroots-level political system, maintained national security, strengthened solidarity between different groups of minorities, and increased ethnic minorities’ belief in Communist Party and Government policies.

### Development of large scale infrastructure (2005 policy focus and implementation)
- 2005 policy direction:
  - Government designated 2005 as the year for ‘improving investment efficiency, preventing losses and wastes, spread-out investment, and outstanding debts in investment and capital construction’ (in implementing Resolution 36/2004/QH11 dated 3 December 2004).
  - Prime Minister directed ministries, sectors and localities to resolve land acquisition, resettlement and disbursement difficulties to accelerate construction progress of key structures.
- Capital mobilization and investment allocation:
  - With continuous improvements of capital mobilization policies and investment and construction management mechanism, the amount of investment capital increased very fast, enabling focused investment in key infrastructure.
  - Investment for developing large scale infrastructure supported shifts in productive structure, increased competitiveness, and re-structuring of agricultural production and rural economy.
- Sectoral shares of gross social investment in 2005:
  - Transport, post and telecommunications: 12.4% of the gross social investment.
  - Agricultural, forestry, fishery and water resources: 13.8% of the gross social investment.
  - Social infrastructure: 27.4% of the gross social investment.
    - Education and training: 4.3% of the gross social investment (concentrated on leading universities, regional universities, and vocational high schools).
- Investment priorities and projects:
  - Focus on construction of national highway system, life-line roads, rural roads, particularly in mountainous areas, border lands and the Central Highlands.
  - Water resources investment focused on flood control programs: Mekong River Delta projects, central regions, Red river basin projects, and reservoirs in the Central Highlands.
  - Science and technology investments focused on physical and technical facilities for agencies, IT technical infrastructure, hi-tech zones, laboratories; implemented national seeds program and 4 technical-economic programs regarding biotechnology, information technology, materials technology and automation technology.

### Measured capacity increases from 2005 investment
- Electricity supplies increased by 1,075 MW.
- Coal increased by 0.8 million tons/year.
- Rolled steel increased by 600,000 tons.
- Cement increased by 3.2 million tons.
- Irrigation capacity increased by 150,000 ha.
- Drainage capacity increased by 60,000 ha.
- Salinity intrusion capacity increased by 10,000 ha.
- New forest plantations: 200,000 ha.
- Construction and/or rehabilitation of national roads: 2,484 km.
- Construction and/or rehabilitation of rural roads: 26,191 km.
- Road bridges: 9,500 m.
- Rehabilitation of railroads: 150 km.
- Construction of a 480 m long quay.
- Clearance through harbours: 6.5 million tons/year.

### Outstanding problems in infrastructure development (constraints identified)
- Transport sector:
  - Transport facilities not yet complete; road system through cities/towns and focal economic zones unsatisfactory for economic needs.
  - Sea ports, railroads and airlines facilities unsatisfactory; transportation capacity poor; storage capacity and information facilities inadequate; high service cost.
- Water resources and irrigation:
  - Irrigation systems fail to serve agricultural production effectively; reservoirs in central region, Central Highlands and mountainous areas incomplete; quality of structures sub-standard; low efficiency and lack of consistency between main structures and approach canals.
  - Water resources facilities mainly focused on irrigation and drainage for rice rather than industrial crops, aquaculture and salt production.
  - Sea dyke system not strengthened enough to fight against major and big storms.
- Electric infrastructure:
  - Electric infrastructure does not meet economic growth requirements during high demand; structure of electric sector not reasonable; some thermo-electric facilities not complete according to schedule.
- Post, telecommunications and IT:
  - Investment and management still rely on administrative boundaries and are not effective; mechanism for using shared IT infrastructure neglected; investment by new enterprises not relevant to service development level.
- Water supply and sanitation:
  - Water supply system insufficient, especially in rural areas; most water treatment equipment old and backward leading to sub-standard water quality.
  - Water distribution system inconsistent with possibility of expanding water sources.
  - Domestic waste treatment systems, especially from urban areas and hospitals, not satisfactory, impacting environment, quality of life and public health.
- Social infrastructure:
  - Education, training, health care infrastructure inadequate in area for use and incomplete in equipment and facilities.
  - Social and public health care system weak at grassroots level; number of patient beds, equipment and facilities insufficient and fail to meet quality requirements.
- Root causes of problems:
  - Unreasonable mechanisms and policies for orienting and attracting investment sources for infrastructure development.
  - Unconcentrated and spread-out allocations of funding sources leading to lack of investment for large scale structures.
  - Investment sources, especially state budget financed, not yet used effectively.
  - Infrastructure planning not timely updated, revised and adjusted; lacks strategic views and low planning quality, undermining its role as a basis for public investment programs.

### Part II (intro): Implementation of incentive policies to promote growth and poverty reduction in 2004-2005 — overview
- Political context:
  - Political stability throughout the "Doi moi" (renovation) period provided basis for establishment of economic mechanisms promoting industrialization and modernization.
  - In 2001-2005, especially 2003-2005, Vietnam focused on amending, supplementing and issuing new mechanisms, policies and laws and renovating implementation guidance to ensure equal and fair treatment of economic entities.
- Objectives:
  - Perfect the business environment and create equality for businesses and classes of population to provide development incentives to all economic components.
  - Renovate and improve role and management effectiveness of State apparatus to drive faster and more effective economic growth and improvements in people’s life.

### 1.1 Improving the production, business and investment environment
- State economic sector:
  - Government directed formulation of new management mechanism for State-owned enterprises based on the Third Resolution of the Party’s Central Committee.
  - Amended the Law on State Enterprises to define rights of representing State capital and property, ensure enterprises' self-decisive rights in manufacturing and trading, separate State ownership from enterprises' rights, and convert part of State enterprises into limited-liability or joint-stock companies.
- Collective economic sector:
  - Issued new management mechanisms to encourage transformation of cooperatives into new models, supplement regulations to develop new forms of cooperatives that include natural person and legal entity, encourage joint-venture models and cooperation between cooperatives and State and private enterprises, and implement training policies for cooperative staff.
- Individual and private businesses:
  - Policies and mechanisms issued to accelerate private sector development, implement freedom of conducting businesses for citizens and enterprises, maximize use of inner-forces, develop workforce, ensure equal opportunities for access to capital, land, labor, technology, and issue Circulars to activate Law on Enterprises.
- Foreign invested sector:
  - Encouraged to develop as integral part of Vietnam's economy; policies to encourage foreign organizations, individuals and overseas Vietnamese to invest in Vietnam, especially in manufacturing of export-oriented and high-technology products; legal framework to encourage outward investments to utilize comparative advantages.
- Socialization of public services:
  - New mechanisms to socialize education, healthcare, culture, sports in direction of decentralizing, self-decisive, self-responsible; some public service activities undertaken by society and non-governmental organizations in compliance with State standards and regulations.

### 1.2 Perfecting the legal framework on macro-management
- Government actions:
  - Instructed ministries and agencies to formulate under-law legal documents supplementing laws adopted by the National Assembly (examples cited: Law on Budget, Law on Construction, Law on Competition, Law on amending and supplementing the Law on Land) to ensure consistent implementation of socialist-oriented and multi-sectoral economic policy and create favorable conditions for businesses and citizens.
- Key legal developments and impacts:
  - Law on Competition introduced new regulations on sensitive market economy issues.
  - Amended Law on Land actively contributed to improvement of investment environment by handing over the right to land use to organizations and enterprises instead of renting the land.
  - Amended Law on export-import changed import-export tax collection mechanism allowing enterprises to declare and pay import-export taxes by themselves and be self-responsible for taxpaying.
  - Draft laws submitted in the Eighth Session of the Eleventh National Assembly (combining and amending existing laws): Law on Investment, Law on Enterprises, Law on Bidding, Law on Anti-Corruption, Law on Savings and Waste Prevention — characterized as meaningful drafts to create favourable and equal business and investment environment.
- Government determination:
  - Draft laws show Government’s determination to stabilize the macro environment and increase ability to mobilize all resources for economic development.

*Source: Part I and beginning of Part II of "Viet Nam Growth and reduction of poverty annual progress report of 2004 - 2005"*

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### 1.3 The different types of market are being established
- Capital market and banking reforms have increased transparency and health of financial and banking systems, improving effectiveness and competitiveness of Vietnam’s banking system.
- Non-banking financial mechanisms (financial, insurance, financial leasing companies and investment funds) continue to develop.
- The issuance of the Law on Labour established foundations for a labour market; social security regulations were amended and supplemented; a widespread network of job services was established; new forms of transaction were introduced in the labour market.
- Progress in establishing the real estate market: many legal documents, Resolutions and Decisions issued; the National Assembly adopted the amended Law on Land use; the Government instructed formulation of guidance documents to re-establish rules in land use management, including restrictions on shifting land use purpose.
- The science and technology market formed at an initial stage through services, manufacturing and supply of software on technology transfer, legal and management consulting; research centers and scientists cooperated with manufacturing entities, creating demand-supply relations in certain science and technology activities.

### 1.4 Restructuring and reform of State-owned enterprises (SOEs)
- Continued implementation of the General Plan on restructuring and reform of SOEs approved by the Prime Minister.
  - In 2005, 730 enterprises will be classified and more than 600 enterprises will be equitized.
  - According to supplementary projects, 900 enterprises would be restructured, of which 600 enterprises would be equitized; these enterprises will be restructured mainly in 2006.
- Implementation of Prime Minister’s Decision number 155/2004/QD-TTg dated of 24 August 2004 on classification criteria and listing of State enterprises.
- Equitization improvements under Decree number 187/2004/ND-CP issued on 16 November 2005:
  - Improved transparency and openness by assessing enterprise value and conducting auction sales of enterprises’ shares through professional organizations.
  - Enabled direct investor access to shares; equitized enterprises can mobilize capital, renovate management, promote development of capital and stock-exchange market, and prevent leaking of State properties.
  - Total revenue collected by the State through this process has increased progressively from 1.5 to 2% compared to the starting price; in particular cases, the share value has increased by five folds.
- Pilot equitization plans ratified by the Prime Minister for:
  - Vietnam Electronics and Informatics Corporation (Ministry of Industry)
  - Vietnam Construction Export-Import Corporation (Ministry of Construction)
  - Trade and Construction Corporation (Ministry of Transportation)
  - Agricultural Material Corporation (Ministry of Agriculture and Rural Development)
  - Mother companies of these corporations will be equitized in 2005.
- Pilot projects:
  - Prime Minister authorized a pilot equitization of Vietnam Foreign Commercial Bank and instructed Bank of Mekong Delta Housing Development Bank to elaborate an Equitization Plan.
- Mother company–subsidiary experimental model:
  - Prime Minister allowed 52 large-scale State-owned corporations and companies to apply this model.
  - As of October 2005, 47 State-owned corporations and companies’ plans have been approved to transfer operation to the mother-company and subsidiary model.
  - Approved plans to experiment establishment of Vietnam Telecommunication and Post Corporation and Vietnam Coal Corporation, and other corporations in Oil, Electricity, Cement and Garment.
  - Ratified regulations on organization and operation of Vietnam Shipping Corporation, experimenting the model of the Board of Management hiring an Executive Director.

### 2 Maintaining the stability of the macro-economic environment

#### 2.1 Reforming the public finance sector
- Finance-budget management policy improvements aim to:
  - Stabilize the macro-economy, accelerate socio-economic development, transform economic structure, create mechanisms to encourage establishment of key economic regions.
  - Prioritize increased investment in mountainous areas, Central Highland, and areas with difficult conditions; promote budget allocation equality and contribute to eradicating hunger and reducing poverty.
- 2004 marked first year implementing the State Budget Law (amended) and associated legal documents, with important changes to strengthen effectiveness in budget and property management and increase capital accumulation for industrialization and modernization.
- Budget management objectives:
  - Consistent and centralized management of the State budget, ensure National Assembly decision-making rights, ensure pivotal role of the central budget, strengthen decentralized management by increasing local revenue sources to incentivize local pro-activity in balancing budgets.
- Administrative reforms in planning, executing, accounting and balancing the budget:
  - New budget expenditure procedures aim to eliminate quota distribution from financial agencies, simplify administrative procedures, increase authority and responsibility of budget-using agencies, and strengthen monitoring and discipline in budget utilization.
- Implementation of new financial management mechanisms for state administrative agencies to encourage socialization of capital mobilization, management and utilization, increasing effectiveness of the public administrative sector.
- Prime Minister’s Decision No 139/2003/QD-TTg on July 11, 2003 on estimated allocation of 2004 budget:
  - Created clarity, transparency and openness in budget allocation, encouraged drive-force regions, and implemented preferences for mountainous and difficult areas to contribute to poverty reduction and social equality.
- Decision No 192/2004/QD-TTg on November 16, 2004 promulgated regulations on financial disclosure to create conditions for public inspection and supervision of State budget utilization.
- 2004 tax law amendments and supplementary laws included changes to:
  - Law on Value Added Tax, Special Consumption Tax (Excises), Enterprise Income Tax, Ordinance on Personal Income Tax for high-income earners.
  - Examples of changes:
    - Reducing number of VAT rates from 4 to 3 rates (0%, 5% and 10%), eliminating the high rate of 20%.
    - Dropping the corporate income tax from 32% to 28%, removing tax on overseas profit transfer.
    - Reducing import tax rates, eliminating minimum price regulation in calculating import tax as determined in the integration roadmap.
    - Further adjusting involved fees to reduce production cost.
  - Tax base expanded; number of beneficiaries of tax exemption/preference reduced to establish an equitable, consistent tax system and eliminate discrimination between economic sectors in line with international integration.

Government management of debts
- Policy goals and indicators:
  - Control Budget deficit at the level below 5% of the GDP (below 3% of the GDP according to international practices).
  - Maintain the Government’s debts surplus at approximately 36% of the GDP at the end of 2005 (including Government bonds and education bonds).
  - Maintain national debts surplus of about 32% of the GDP (of which, all Government foreign debts are of preferential interest rate (ODA)).
  - Strict and effective management of Government and national debts; timely settlement of due domestic or foreign debts to ensure national financial security.
- Debt risk management:
  - Manage and evaluate debt risks while controlling and efficiently using new loan sources.
  - Ministry of Finance, with concerned ministries, studied adjustments to clauses on foreign debt management emphasizing consistent debt management, division of work and responsibility to guarantee strict debt management in accordance with international practices.

#### 2.2 Mobilizing resources for economic growth and poverty alleviation
- Investment and business environment improvements encourage domestic and foreign investors; improvements seen in infrastructure, legal system, policy and management mechanisms.
- Corporate Law breakthroughs considered primary factors promoting non-public sector development and sustainable direction.
- In 2005 the National Assembly passed a series of laws to improve investment environment; Government actions included:
  - Modified management regulations for enterprises in export processing zones; adjusted working regulations and personal income tax.
  - Issued Directive No 13/CT-TTg dated April 8, 2005 on measures to attract Foreign Direct Investment.
  - Delegated more responsibility to provincial/city People’s Committee in providing licenses for FDI projects and managing them.
- Administrative procedures in investment reformed: faster examination of projects, implementing, clearing and compensating land; publication of master plan and business conditions for conditional business fields to enable public supervision.
- Government studied and issued list of forbidden, restricted or conditional goods and services; applied unique price policy and measures to reduce investment cost and improve enterprise efficiency.
- Specific investor-oriented measures:
  - Personal income tax for foreigners declined to 40%, the level of taxed income risen to above 5 millions.
- For foreign investment:
  - Government committed to improving mechanisms and policies, minimizing investor difficulties, eliminating conditional and time-limited protectionism for domestic fields capable of competing, and gradually opening market per integration roadmap.
  - Adjusted sector planning with location planning to facilitate foreign investor participation.
  - Encouraged all economic sectors, including foreign investors, to invest in infrastructure: transportation, seaport, electricity and water supply, hospitals, schools, entertainment and urban centres.

#### 2.3 Monetary policy and measures to control inflation

Monetary policy
- Monetary targets have followed domestic and international developments closely; policy operated carefully and flexibly emphasizing macro stability, inflation control, and prioritizing economic growth.
- Monetary policy priorities:
  - Mobilize capital, provide loans to key projects, small and medium projects and micro credit projects in rural areas.
  - Use monetary tools based on market demand and supply with comprehensive, flexible and timely coordination between tools.
  - Market knowledge used as major tool to regulate serviceable loans of credit organizations.
  - Continued improvement of loan reallocation and rediscount to provide signals and establish an interest rate framework that orients market interest rates and harmonizes interest rate and exchange rates to stabilize mobilized and loan interest rates of the economy.
- Interest rate and foreign currency management:
  - Flexible and swift management helped stabilize foreign currency market, encourage export and increase foreign currency reserves.
  - Compulsory reserves adjusted in line with domestic and international developments and coordinated with other monetary tools to regulate serviceable capital sources of commercial banks and control inflation.
- Further actions:
  - Improve legal environment for monetary market activities and develop a secondary market to improve mobility of monetary tools and facilitate market participation.
  - Increased compulsory reserves for below 12 month deposits in Vietnamese dong and foreign currencies; changed mode of interest payment for compulsory reserves in Vietnamese dongs.
  - Flexible interest rate operation facilitated import and export activities.
  - Inter-banking average exchange rate of VND/USA has been associated with changes of USD in market; maintaining stable exchange rate affected local people and investor psychology and reduced conversion of Vietnamese dongs into foreign currencies.
  - Management of foreign currencies improved to create legal framework for international business and investment; foreign currency market expanded in scale and scope with management measures aligned with international practices to facilitate commercial bank activities and build a competitive exchange stock.
  - Open market activities continue to harmonize and meet need for serviceable capital of credit organizations; State Bank reallocated loans to public commercial banks, joint-stock commercial banks and joint-venture banks to support short-term capital needs.

Inflation and measures to control inflation
- Consumer Price Index (CPI):
  - Increased dramatically: 9.5% in 2004 and 8% is estimated in 2005.
- Major identified causes of sharp CPI rise:
  - Rise in prices of oil and other essential materials in the world market.
  - Natural disasters and diseases in domestic context.
  - Outbreak of avian flu approaching the Lunar New Year causing food shortages and dramatic rise of food price.
  - Rise of food price caused not only by rise of input prices (text ends here in the source).

*Italic: Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005*

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Inflation and monetary policy management (2004–2005)
- The rise in food and export prices contributed to higher domestic prices, improving farmers’ incomes but worsening conditions for some urban populations and complicating enterprise strategies, budget revenue, and monetary policy.
- Government responses and central bank actions:
  - In March 2004, the State Bank adjusted monetary targets “in a more careful manner” to stabilize the currency, interest rate, and exchange rate, contributing to controlling inflation and promoting growth.
  - In mid-2004, the State Bank decided to double compulsory reserves for deposits in commercial banks to reduce payment excess in the banking system; basic and oriented interest rates remained constant.
  - Public information campaigns on causes of price rises and government stabilization measures were used to reduce psychological inflation pressures.
  - In 2005, global factors (high gas prices, rising USD interest rates, natural disasters) and domestic factors (New Year consumption demand, Government increases in electricity/gas prices and salary, avian flu outbreaks, serious droughts) contributed to renewed CPI increases.
  - To meet currency control targets in 2005, the State Bank increased several major interest rates, including: basic interest rate of Vietnamese dongs, interest rate of loan reallocation, and discount interest rate; mobilized interest rates and loan interest rates in VND and USD rose accordingly.
  - The State Bank requested commercial banks to comprehensively improve credit quality, limit credit growth to capital mobilization and risk-mitigation capacity, and improve loan management and efficiency.

### Trade policy reforms and export promotion (2004–2005)
- Legal and institutional reforms enacted:
  - Amended Trade Law and implementing Decrees; Law on Competition and related Decrees; Antidumping Law and related Decrees; Decree on measures punishing Competition Law violations; Decree on Multi-level Sales; Prime Minister decisions on import licensing and on post-2005 import-export management.
- Export-supporting measures:
  - VAT exemption for export goods and manufacturing of export goods.
  - Preferential credit programs for exports and the establishment of an Export Assistance Credit Fund.
  - Key national trade promotion programs and national brand building programs.
  - Bonus policies for enterprises that surpassed export quotas and for export achievements.
- Specific policy and operational actions (selected):
  - Implementation of Decision 26/QD-TTg dated December 17, 2003 (Plan on development of goods export market for 2004-2005); Directive on export promotion of wood products; measures to prevent import surplus.
  - Negotiations with the EU to increase textile and apparel quotas in 2004; guidance for exports to EU and U.S.; adjustment of quota fee for U.S. market; Decision on Regulations of Certificate of Origin sample D (CEPT/AFTA commitments) and on monitoring export textile and apparel products.
  - Allocation of tariff rate quotas; Decisions on lists of consumption goods to determine import duty payment deadlines; issuance of permits for temporary import and re-export for certain goods (wood products, bicycle) to prevent illegal transhipment.
  - Studies and regulations on trans-border trading; management of imported intermediate goods for petroleum production; licenses for temporary import and re-export; 5 year tariff exemption on imported raw materials for FDI enterprises; guidance on tariff rate quota implementation.
- Domestic market measures:
  - Implementation of Directive 13/2004/CT-TTg dated March 31, 2004 on measures to develop the domestic market.
  - Directive 23/2004/CT-TTg dated June 16, 2004 on strengthening measures to save gas and petroleum.
  - Decision 311/2003/QD-TTg dated March 20, 2003 (Plan on organization of domestic markets and rural trade development to 2010).
  - Decision 559/QD-TTg dated May 31, 2004 (Plan on market development to 2010).
  - Decree on measures to punish administrative trade violations; programs to develop domestic trade, market systems, and combat trafficking and counterfeits; maintain supply–demand balance of essential goods.
- International integration and negotiations:
  - Vietnam conducted 11 meetings with the WTO Working Party on accession and concluded bilateral negotiations with 20 WTO members.
  - In 2004, bilateral negotiations concluded with EU, Cuba, Chile, Argentina, Brazil, and Singapore.
  - By October 2005, 6 WTO members remained for bilateral conclusion: the United States, Australia, New Zealand, the Honduras, the Dominican Republic and Mexico.
  - Vietnam accelerated ASEAN and other multilateral processes (CEPT/AFTA tariff reductions; participation in APEC, ASEM) to strengthen trade and investment cooperation.

### Large-scale infrastructure development: planning
- Strategic and planning approvals:
  - Prime Minister ratified the Strategy on the Development of the transportation sector to 2020; Plans for development of roads, railways, air transport, maritime transport and sea ports.
  - Detailed sector planning to serve five-year and annual plans is being elaborated; each sector selects projects according to overall sectoral plans.
- Ongoing and specified planning actions include reviews and detailed plans for:
  - Roads leading to border areas and corridor along Vietnam-China border and Loc Tan.
  - Air transportation to 2020 and establishment of a safe road traffic corridor.
  - Sustainable development of transportation in Phu Quoc Island.
  - Detailed plan for international transhipment sea port complex Van Phong to 2010 and orientation to 2020.
  - Transportation systems in key economic zones.
  - Implementation acceleration of railway links: Thai Nguyen-Tuyen Quang-Yen Bai; Dieu Tri-Quy Nhon.
  - Water transportation system plans for Northern Delta to 2010 and orientation to 2020; domestic waterway system in Southern region to 2010 and orientation to 2020.
  - Sea port system in three key economic zones; airports comprehensive construction plan.
  - Large sea ports and waterway transportation development in the Mekong Delta region.
  - Transportation system development in Central midland and Northern mountainous areas to 2020.

### Mobilizing resources for large-scale infrastructure projects
- Resource constraints and State budget role:
  - Current development resources remain restrained; annual State budget for transportation and other infrastructure is only sufficient to provide counterpart funds for ODA projects, leaving no available resource for important domestic infrastructure projects.
  - Prime Minister directed borrowing from next year’s budget reserved for infrastructure development to fund 67 projects with a total amount of investment of 6200 billion VND for the 2001-2005 period.
    - (Decision ratified in text 411/CP-CN of the Prime Minister on May 16, 2001; Law on State Budget in 2002 allows this action.)
- BOT and FDI investment mechanisms:
  - Decree 77/CP (June 18, 1997) on regulations related to BOT form applicable to domestic investment.
  - Decree 62/1999/ND-CP (July 31, 2000) on investment mechanisms related to Built-Operated-Transferred, Built-Transferred-Operated, and Built-Transferred, applicable to foreign investment.
  - Ministry of Transportation invested in construction of 22 projects with a total investment of 54000 billion VND:
    - Four projects completed with total investment of 1677 billion VND; of which BOT enterprises invested 1507 billion VND, accounting for 90% of total contracted fund.
    - Four other projects being implemented with total investment of 2012 billion VND; BOT enterprises’ investments are 1733 billion VND, accounting for 86% of total funding.
- Government bonds and projected issuance:
  - Prime Minister Decision 182/2003/QD-TTg (5/9/2003) ratified investment for 38 projects with total investment of 71640 billion VND:
    - State budget contribution: 7832 billion VND.
    - Remaining mobilized through Government bonds: 63064 billion VND.
  - Due to construction material price fluctuations, displacement costs, and other emerging costs, it is expected the Government will have to issue bonds at an equivalent value of 110.000 billion VND to meet infrastructure investment needs.
  - Footnote breakdown of needed funding (by project type):
    - Transportation projects: 76035 billion VND.
    - Irrigation projects: 22080 billion VND.
    - Displacement costs for other projects: 8085 billion VND.

### Environmental and social policies for infrastructure projects
- Legal and institutional measures:
  - Resolution 41-NQ/TW dated November 15, 2004 of the Politburo on environmental protection in the accelerating industrialization and modernization period guides 2005 and subsequent actions.
  - Government issued an Action Plan to implement Resolution 41 (Decision 34/2005/QD-TTg, 22/2/2005).
  - Ministry of Planning and Investment tasked to coordinate with Ministry of Natural Resources and Environment to draft a decree on environmental protection requirements across establishment, appraisal, approval and implementation stages of strategies, construction planning, plans, programs, and socio-economic development projects.
  - Decree 16/2005/ND-CP on management of construction investment projects requires analysis and assessment of projects’ ecological environment impacts, fire and explosion prevention/protection measures, and security requirements as part of investment construction project reports.
- Required environmental measures for large infrastructure projects:
  - Ensure an appropriate capital contribution in total investment to implement environmental protection requirements.
  - Properly carry out environmental impact evaluations of programs and projects.
  - Establish and apply environmental criteria across sustainable development goals.
  - Review and adjust national, sectoral and provincial projects that do not meet environmental protection and sustainable development requirements.
  - Increase the role and responsibility of environmental management agencies, other agencies, associations and the population in environmental protection.

*Source: Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005.*

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Environmental and social impact assessment for large-scale infrastructure projects
- Reports on environmental impacts must be submitted and approved by an authorized governmental agency; failure to submit such reports leads to punishment and a fee which ranges from 1 to 2 million VND.
- If a project does not meet requirements and criteria on environmental and social impacts, the project will not be approved and therefore, not implemented.
- Law on Power (approved in 2004) requires that requests for issuance, amending and supplementing of operative licenses in the power sector include a Report on the environmental impacts of the project approved by an authorized governmental agency.
- Power generating units are obliged to implement regulations and laws on environmental protection in power generating activities.
- The Development Plan of the transportation sector of Vietnam to 2020 (Decision 206/2004/QD-TTg dated 10 December 2004) requires:
  - Diversified infrastructure to meet passenger demands, ensure discipline and urban transportation safety, and protect the environment.
  - Studies, research and analysis on environmental impacts of transportation systems during construction and utilization.
  - Measures to minimize environmental impacts of transportation systems under construction or in use, and study of mechanisms to protect the environment in the transportation sector.
- Deficiency identified: the report on social and environmental impacts is treated as only one component of project documentation, leading investors to tend to neglect it.
- Social safeguards:
  - Compensations provided to households for destroyed or removed properties: money, housing or land.
  - Properties entitled to compensation: house, architectural works, plants, animals and other properties, with the principle that living conditions after displacement be at least equivalent to those before.
  - State provides training assistance to agricultural workforces obliged to switch jobs due to re-collection of agricultural land and gives them priority in new job selection.

### Management mechanism for large-scale infrastructure projects
- The Law on Construction (issued on 6/11/2003; entered into force on 1/7/2004) is described as the most comprehensive law on management mechanisms of infrastructure projects and regulates all stages of construction activity, including management of investment projects on infrastructure.
- During 2004-2005 a series of under-law texts issued to guide implementation of the Law on Construction, e.g.:
  - Decree 209/2004/ND-CP on 16/12/2004 on the quality management of construction projects.
  - Decree 46/2005/ND-CP on 6/4/1005 on the organization and the operation of construction inspection.
- Measures to restore discipline and limit waste in infrastructure construction include:
  a) Define concrete procedures and enforcement mechanisms for inspection, control and monitoring of State-funded basic infrastructure at each stage; increase transparency and publicization of legal regulations, projects, bidding, evaluation, disbursement; publicly announce inspection results and punishment measures.
  b) Establish mechanisms to highlight individual responsibility and punishment measures proportionate to responsibility at each stage of investment; allow administrative, penal and compensation measures; eliminate attribution of failures solely to collectivity; remove officials with inadequate moral values, irresponsibility or limited capacity.
  c) Review and adjust investment plans and planning to align with Socio-Economic Development Strategy and economic restructuring; clarify decentralization and delimitation of responsibilities between Ministries and provinces/cities; elaborate schedule to apply models and mechanisms to eliminate vicious circles in infrastructure investment.
  d) Conduct comprehensive review and evaluation of the legal framework on infrastructure investment to amend, supplement, and issue new regulations in a timely manner.
  e) In 2005, the Government continues to guide inspections of works and projects flagged by the public and constituency.
  f) From now until the end of 2006, the Government will have a concrete plan and measures to resolve completely debts related to infrastructure investment projects, and will report on an annual basis to the National Assembly.
- The National Assembly requested legal agencies to set concrete plans to prevent, detect and strictly punish organizations and individuals violating infrastructure investment laws.
- 2005 designated as the year for “Improving the efficiency of investment, fighting against the embezzlement, wasteful and dispersed use of investment sources, and fighting against the debts in infrastructure investment projects”.
- By the end of 2005 the National Assembly will consider and is expected to approve legal documents on management of investments of large-scale infrastructure projects, such as: Law on Auction Sale, Investment Law, Law on Savings and Law on Anti-corruption.

### Policies on restoration and preservation of infrastructure works
- State concentrated a large part of funding for infrastructure development: in the five-year plan 2001-2005, the State will invest 126 thousand billion VND for the transportation and telecommunication sectors, representing an average increase of 20% per year.
- Funding for restoration and preservation increased from 592 billion VND in 2002 to 946 billion VND in 2004, but represents only half (45.9%) of the needs for restoration and preservation of infrastructure projects.
- Projection and risks if funding remains unchanged:
  - In the next 10 years, the road system will be severely degraded, with 34% of the system severely damaged, of which 55% have a high traffic density.
  - The percentage of good road will be reduced to 10% (*).
- Irrigation sector: funding for restoration and preservation responds to 60% of real needs; designed capacity can meet 80% of needs of arable land, but real arable land area benefiting from irrigation projects accounts for only 50-60% of designed capacity, partially due to lack of funding for preservation and restoration.
- Identified need: elaborate effective management mechanism to allocate funding more efficiently to ensure quality and practicability of infrastructure projects and minimize intermediate production costs.
- Considered measures to improve preservation and restoration:
  - Increase funding for preservation and restoration activities through increasing the current expenditure.
  - Calculate fully all sources of incomes from fees and costs related to infrastructure projects (transportation, irrigation, public utility) to increase budget income and funding for preservation and restoration; poor households and communes will be exempted from paying fees related to these projects, and enterprises responsible for operation will receive compensation from the State budget; quality of services should be improved once fees are collected.
  - Calculate fully the necessary costs for preservation and restoration and incorporate these costs in production and operational costs; strictly follow the restoration schedule.
  - Establish funding plans for preservation and restoration activities and investment plans for infrastructure projects.
  - Elaborate mechanisms to mobilize non-budget sources to fund preservation and restoration activities.

### Social and poverty reduction policies: national target programs and direct support (2001-2005)
- Key policy groups in the national target program on poverty reduction 2001-2005:
  a) Indirect supportive policies: health care, education, social safety, agricultural land tax exemption, housing, working equipment and production land.
  b) Direct poverty reduction supportive policies:
    - Sub-group 1: general poverty reduction projects (concessionary credit to poor households for production and business; business-orientation and agriculture-fishery-forestry extension projects; models in poverty reduction in geographically particular areas such as coastal areas, mountainous areas, border areas, sea islands, and isolated areas in the Mekong Delta).
    - Sub-group 2: poverty reduction projects for communes not entitled to Program 135 (vital infrastructure: small-scale irrigation works, school, health stations, road, electricity, water facilities, market); supporting production; training staff; re-location and economic development and settlement projects in poor communes.
- Concessionary credit for poor households:
  - By 31 December 2005, about 3.2 million households have been given loans by the Bank of Social Policies, with the average credit of 3.6 million VND per household, rising from 2.2 million VND in 2001.
  - In 2001-2005 the total amount of credit for poor households and other entitlement people grew rapidly by 20% per year on average.
  - By 30 September 2005, total credit given by the Bank of Social Policies to poor households and other entitlement people was 16,590 billion VND, fulfilling 100.8% of the projected target and representing an increase of 2,285 billion VND compared to the amount at 31 December 2004.
  - 81% of this credit amount, or 13,375 billion VND, was given to poor households (an increase of 1,766 billion VND compared to 31 December 2004), and equals to 106.3% of the projected target for 2005.
  - Remaining credit to create jobs totals 2,418 billion VND (an increase by 159 billion VND compared to 31 December 2004) and equivalent to 104.2% of the projected target for 2005.
  - It is estimated that about 75% of poor households, or 15.8% of households nationwide, are given loans.
  - The State has subsidized 1,782 billion VND to cover the gap between the two interest rates.
  - Proportion of overdue debt was low (4%).
  - More than half of owing households acknowledged that the loan helped raise income and reduce poverty; many escaped poverty and bought production means such as ox, cows, horses.
- Production land support:
  - Provinces provided funds and production land for landless ethnic people and other poor households to guarantee food security in Northwest provinces.
  - Provided 5,139 ha of land for 10,455 households in the Central Highlands.
  - Dong Thap, Tra Vinh and Soc Trang provinces provided loans to 4,325 households to help them buy back mortgaged, transferred or sold land.
- Agriculture, forestry and fishery extension for the poor:
  - Over 50 thousand training courses on technique transfer and 6 thousand demonstration models in new, high-productivity plants and animals organized for over 2 million poor people.
  - 65 training classes held for more than 2 thousand staffs and farmers in poor communes.
- Production support and business development:
  - In five years, 103 models in agro-forestry processing and preservation and business development built in 37 provinces:
    - 52 models in farm production processing and preservation.
    - 44 in handicrafts.
    - 4 in salt production.
    - 3 in mechanical engineering.
  - 106 classes held for 9,000 farmers in small-scale farm product processing and preservation.
  - Funds to organize these classes from both the poverty reduction budget (68 billion VND) and other agricultural projects, totaling 280 billion VND.
  - These models generated stable livelihood and average income of 250,000 VND/person/month.
  - Skilled craft people can earn from 550 to 700 thousand VND/person/month.
- Building poverty reduction models:
  - Models built in 83 communes in 20 provinces, with participation of 40,000 households, of which 55% are poor.
  - 64 communes built linkage models between businesses and material-providing poor households.
  - Models also built in 19 communes of particular geographical characteristics in 3 ecological zones (mountainous, ethnic ...) 

*Excerpted from Part II of the Viet Nam Growth and reduction of poverty annual progress report of 2004 - 2005*

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Small-scale infrastructure, settlement, migration, and housing projects
- Total funding for specified small-scale projects reached 170 billion VND, of which 9%, or 20 billion VND, came from the central State budget; the rest are business small-scale infrastructure loans to households and communes.
- Project household outcomes:
  - Income of project households increased by 16-19% annually.
  - 19-20% of project households escaped poverty.
  - Area of material plants (cotton, tea, tobacco, sugar cane) in project communes increased by 9-11% on average.
- Infrastructure supportive projects:
  - Total fund from projects, local authority budgets and the community: 776 billion VND.
  - Over 1 thousand basic infrastructure works built for 997 poor communes.
  - Community fund contribution: nearly 200 billion VND.
  - These investments fulfilled less than 40% of poor communes’ need for basic infrastructure in the 5-year plan.
  - At present, 172 poor communes still lack 4-5 basic infrastructure works on average.
  - 157 communes in coastal areas and sea islands remain in extreme difficulties.
  - Under Prime Minister’s Decision number 257/2003/QD-TTg in 2005, the State allocated a grant of 500 million VND per commune for infrastructure investment in 157 communes in extreme difficulties in coastal areas and sea islands.
- Settlement in poor communes:
  - Over 200 projects implemented to guarantee settlement and stabilization for 90,000 households, total investment fund 480 billion VND.
  - Outputs reported: 5,300 ha of forest trees planted; 454,375 ha protected; 7,090 ha of fruit trees planted; 7,760 ha reclaimed.
  - Infrastructure built/upgraded: 752 kilometers of road upgraded, 39 rural roads, 310 kilometers of canal lines of total 40 canal works, 100 sluices and bridges, 106 water-pumping stations and small-scale irrigation dams, 20 water provision systems and 823 water wells, 104 schools and health stations, and 8 electricity stations.
  - Beneficiaries: over 50,000 thousands have had better access to production and social services in their areas.
- Stabilization and economic development for migrants:
  - 311 billion VND spent to relocate 106,000 households comprising 631,000 people; intra-province relocations accounted for 90%.
  - Nearly 300 new economic area projects implemented; 20 big projects in key zones (managed by Ministry of National Defence) reclaimed 40,000 ha of land, built 300 kilometers of road, nearly 1,000 irrigation works, total fund about 1,500 billion VND.
  - Life and production of nearly 60,000 migrant households stabilized in key areas such as Northwest and the Central Highlands.
- Housing support for the poor:
  - By December 2004, 293,137 poor households assisted in housing: 83,551 houses repaired and 209,568 reconstructed; total fund 1,198 billion VND.
  - Estimatedly, by the end of 2005, 350,000 houses nationwide will have been repaired and reconstructed.
  - By June 2005, 7 provinces (Ha Tinh, Tuyen Quang, Hai Duong, Hai Phong, Bac Ninh, Ha Noi and Hung Yen) have declared replacement of almost all slumps.

### Supportive policies for remote, isolated, and ethnic minority areas
- Policy frameworks and programs cited:
  - Series include SEDEMA, Social and Economic Development Program for 6 Northern border provinces, the Central Highlands program, Socio-Economic Development Strategy in Viet Nam-China border area, housing and land policies for Central Highland people, Decision 174/2004/QD-TTg, and other production land, housing land, housing and water supportive policies.
- Infrastructure development in remote and isolated areas:
  - Programs combined: Program 135, regional economic and social development programs, rural transport and electricity program, clean water and environmental hygiene program.
  - Progress: almost all major infrastructures in mountainous and ethnic areas have been built and upgraded (inter-commune/inter-district/inter-province transport, key irrigation works, power grid improvements, more schools, health stations, cultural houses).
- Land and production policies:
  - Provinces planned and re-arranged land to allocate to landless people; reviewed and re-acquired land not used or ineffectively used by state-owned forest farms and reallocated to landless households.
  - Production land supportive policies implemented especially in the Central Highlands and land re-acquisition for Khmer people in the Mekong River Delta.
- Concessionary credit:
  - State implemented concessionary credit policies through state bank branches and credit projects, providing loans from the Bank of social policies for production development and poverty reduction.
- Price subsidy and essential goods:
  - Price subsidy policy provides subsidies to the price and transport expenditure of plants, fertilizers and essential goods such as iodine salt and petroleum.
  - These policies aimed to facilitate agricultural production changes, reduce difficulties, encourage market-oriented commodity development, increase income and raise quality of life.
- Direct household assistance for ethnic minorities:
  - Supportive policies to ethnic minority households in extreme difficulties implemented since 2001; funds given directly to buy plants and animals and cover immediate needs (food, blankets and mosquito nets, clothes and production equipment).
  - After 4 years (2001-2005), these policies have covered 140,000 households of ethnicities in 42 provinces in mountainous and ethnic areas.
- Education, healthcare and cultural preferential policies:
  - Preferential education policies: incentives for teachers to work in difficult areas; scholarships for ethnic pupils; grants in paper, notebooks and textbooks; boarding and semi-boarding secondary schools; nomination policies for colleges/universities/high schools; policies to teach ethnic languages.
  - Healthcare preferential policies: reduction and exemption of hospital fee for people of ethnicities implemented under Decree 95/ND-CP and Decision 139/2002/QD-TTg on diagnosis and treatment of poor patients.
  - Cultural policies: building grassroots cultural institutions, preserving ethnic cultural identities, supporting communication and information outreach, providing some newspapers and magazines free of charge; increased radio and television coverage and radio programmes in ethnic languages.
- Human resources and personnel policies:
  - Policies on training, complementing and using staff from ethnic minorities, incentives to encourage work in remote and difficult areas, and rotation policy for civil servants.
  - Result: number of officers of ethnic minorities considerably increased at all levels; officers’ quality, qualification level and expertise gradually improved.

### Education and training policies (2004–2005)
- Education goals referenced:
  - Increase the quality and the suitability of education for all.
  - Strengthen universalization of primary education; complete universalization of primary and secondary education by 2010.
  - Create opportunities for life-long education for all citizens.
  - Mobilize full participation of the community for education.
  - Manage and utilize resources effectively for education.
- Policy actions:
  - Reforming education management mechanisms; implementing curricular in new textbooks; shift from scale development to in-depth development.
- Budget and external support:
  - In the 2000-2003 period, state budget for education increased by 21.3% annually; overall state budget annual growth rate was 14.8%.
  - 2005 State budget for education accounts for 18% of total state budget expenditure.
  - ODA funds channeled to Target-based Support Program from World Bank, Belgium, SIDA, EC, DFID and NZAID to assist in Education for All (EFA) targets.
- Human resources and infrastructure:
  - School-year 2003-2004: total number of teachers and lecturers nationwide was 911,000, an increase of 23% from the 1997-1998 school year.
  - Rate of qualifying and over-qualifying teachers: 87% at elementary level, 91.2% at secondary level, 95.4% at high schools, 71% at vocational schools, 86.3% at career high schools and 45% at universities and colleges.
  - Number of classrooms in 2003-2004 increased by 40,649 compared to 2000-2001; rate of 4th category and concrete classrooms rose from 84% to 89.3%.
- Education support to the poor:
  - Annually, over 3 million poor and ethnic students are given exemption and reduction in school-fee and other compulsory fees.
  - 2.5 million ethnic poor pupils receive textbooks and notebooks worth over 100 billion VND totally.
  - The rate of children attending school at the schooling age has increased by 11%.
  - Among households benefiting from school-fee exemption or reduction, the growth in schooling rate reached 16.5%.
  - Average reduction of 25% in school-fee for poor children compared to others.

### Healthcare policies and outcomes
- Grass-root healthcare strengthening:
  - Implementing Instruction 06/TW-CT dated 22 January 2002 on strengthening and completing grass-root healthcare network.
  - By 2004, 65.4% of local health stations had doctor(s).
  - By the end of 2004, 93% of health stations have midwives or obstetrical/paediatric physicians.
  - Over 40% of nurses have high-school or higher qualifications.
  - 93.3% of villages have health workers.
- National standards in commune healthcare:
  - Unofficial estimate: by September 2005, 30% health stations reached the standard (*), mainly in the lowlands.
  - Survey results: 75% of communes in ethnic areas with religion practitioners do not meet the standard in traditional medicine; 65% do not meet the standard in infrastructure and facilities; 50% do not meet the standard in finance for their health stations.
- Implementation of Decision 139/2002/QD-TTg on diagnosis and treatment of poor patients:
  - Decision 139 has generated fundamental changes; beneficiaries increased three-fold compared to pre-Decision 139 period.
  - After two years’ implementation, number of beneficiaries in 2004 was 13,183,328 people, reducing by nearly 1.2 million compared to 2003.
  - In 2001-2004, 14 million poor patients were given free diagnosis and treatment.
  - Total fund for treatment for poor patients in three years (2003-2005) reached 2,304 billion VND, with 717.6 billion VND in 2004, 65.7% of which was disbursed in the same year.
  - Area disbursement rates in 2004: Southeast of the Mekong Delta 86.8%; the Red River delta 74.3%; the Central Highlands 72.6%; other areas reached only 60%.
  - Times of out-hospital diagnosis as well as in-hospital treatment of a poor patient in public healthcare units have increased two-folds compared to 2003.

*Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005 — Viet Nam Growth and reduction of poverty annual progress report of 2004 - 2005*

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Health insurance and Decision 139: implementation outcomes and barriers
- Coverage and access
  - Over 80% of poor people in rural and mountainous areas are diagnosed and treated in their own communes/provinces.
- Implementation weaknesses and operational barriers
  - Slow progress in identifying beneficiaries and in issuing health insurance cards.
  - Many weaknesses remain in management, statistics and reporting of the Fund.
  - Assistance to the poor and free migrants bears financial burden on local authorities.
  - According to a national health survey, only 8.9% commune health stations refund treatment expenditure to patients with health insurance cards.
  - Diagnosis and treatment quality at commune level is still limited.
  - Refunding for treatment of poor patients at national hospital is slow.
  - Diagnosis and treatment for patients with health insurance cards are slow.
  - Healthcare service system is inadequate, especially in areas of difficulties where many people entitled to Decision 139 live.
  - Communication on the Fund of Diagnosis and Treatment for Poor Patients has been done, but with limited effects.
  - Insurance cards are sometimes given to the wrong people.
- Net assessment
  - The problems listed indicate that Decision 139 on Diagnosis and Treatment for poor patient somehow has not yet been as effective as expected.
  - All of these barriers have limited the number of poor people that really benefit from this type of service.

### Social welfare system for disadvantaged and vulnerable groups
- Coverage and programs
  - The social welfare system is being expanded; about 10 million people are participating in the social insurance system.
  - This year, 2004, about 260,000 social target groups receive monthly allowance from the state and free public health care services.
  - Thousands of disabled people, orphans, lonely elderly people and those of over 90 years old without pension and social allowance are entitled to free health care and examination services.
  - Target groups are supported to receive literacy education or vocational training to find an appropriate job and integrate into the community’s life.
  - Emergency aids assist post-disaster recovery and support to thousands of people losing their home and suffering from temporary food shortage.
- Policy impact and community initiatives
  - The level of policy impact on physical and spiritual life of the social target groups is becoming higher.
  - Government has adjusted the level of social allowance and support, and created a mechanism for social targets to access services more conveniently and fairly.
  - Assistance to people credited with making contribution to the country and beneficiaries of social welfare is maintained and expanded.
  - Charity activities and support to people in flood prone areas, the lonely elderly and victims of the Agent Orange (dioxin) are widely applied and involve individuals and organizations.
  - Campaigns include construction of houses of gratitude for war invalids or martyr’s families, opening savings accounts for disadvantaged households entitled to social welfare, contributions to the Fund of Gratefulness to benefactors, and contributions to the Charity Fund.

### Environmental policies and actions
- Objectives
  - Reasonable exploitation and effective use of natural resources (including land, water, minerals, environment, etc.) to meet economic growth demands, poverty reduction and sustainable development.
  - Ensure harmony between population growth, urbanization and socio-economic development with environmental protection.
  - Establish databases on natural resources and current environmental conditions for planning, socio-economic development, security and national defence, and environmental and ecological protection.
- Measures and actions taken
  - Limit pollution increase and address seriously polluted areas or places of environmental degradation.
  - Increase disaster prevention and consequence mitigation capacity for natural disasters and unfriendly-to-environment climatic changes.
  - Improve capacity of emergency preparedness and effective response to environmental pollution and natural disasters.
  - Resolve environmental pollution in industrial zones, trade villages, and cities; improve rural environmental sanitation in densely populated rural areas; and control pollution in the large urban areas.
  - Use natural resources and environment in river basins in a rational, effective and sustainable manner; ensure ecological balance, natural conservation and biodiversity; raise awareness on environment; focus on pollution prevention and environmental improvement measures.
- Policy instruments and legal documents (selected)
  - Decision 07/2005/QD-BTNMT dated 20 September 2005 on compulsory application of Vietnam standard TCVN 7440:2005 - the standard of waste management in thermo power production.
  - Decision 249/2005/QD-TTg dated 10 October 2005 of the Prime Minister on Roadmap to apply the standards of air exhaled by vehicles.
  - Decree 149/2004/ND-CP dated 24 July 2004 on granting licenses of water exploitation, exploration and use, and waste water.
  - Circular 2/2005/CT/ BDG&DT dated 31 January 2005 on Strengthening public education for environmental protection (Ministry of Training and Education).
  - Joint-agreement 01/2004/NQLT-TLD-BTNMT dated 15 November 2004 on the Cooperation to protect the environment and facilitate sustainable development (Vietnam Trade Union and Ministry of Natural Resources and Environment).
- Programmatic and financial developments
  - The Government has approved in principles 36 programs, plans, and projects that are priority to implement the National Strategy on Environmental Protection.
  - A policy on fee imposed on producing waster water was adopted and has been put into effects. Hundred billions of VND is estimated to be collected from cities, joint-venture companies, production units in coal mining industry and from others.
  - Vietnam is considering issuing other policies and will use effectively the fund that is raised from these policies.
  - “Socialization” progress has been made in environmental protection through the legal system to facilitate all economic entities to participate.
  - Many places with environmental pollution have been addressed; pollution in industrial parks, urban areas, and craft-villages is being researched and attended.

### Administrative reforms and development of a modern administration system
- Institutional reforms (5.1.1)
  - Formulation and issuance of legal documents within the Government’s authorities were continuously renovated in 2004-2005, improving the national institutional system.
  - New or revised laws included the Competition Law, Bankruptcy Law, Construction Law, Electricity Law, Unified Enterprise Law, and Common Investment Law.
  - The Law on Issuance of Legal documents by the People’s Councils and People’s Committees was approved by the National Assembly in 2004 to create a legal framework for local authorities’ issuance of legal documents and to eliminate uncontrolled issuance at local levels.
  - Local authorities issued legal documents to enforce central institutions and customize enforcement to local conditions, including documents to call for investment, establish industrial zones, conduct land acquisition and resettlement, support economic sector development, realize decentralization and empower provincial and district authorities.
  - Strengthening of institutions on government–people relations: community consultation before important decisions; people’s monitoring of state agencies’ operations; dealing with violations by state agencies and employees; definition of competence and responsibilities in resolving claims.
  - Continued reviews and systemization of legal documents and repeal of invalid or overlapping laws and regulations.
- Administrative procedure reforms and one-stop shop mechanism
  - Reforms of administrative procedures linked to the one-stop shop mechanism achieved initial positive results.
  - Administrative procedures in land use, construction, birth/marriage/death records, residence registration, customs, taxes, treasury, and import/export were reviewed, revised, repealed or substituted to simplify and reduce elapsed time.
  - In early 2005, the Prime Minister issued a decision on establishment of an inter-ministerial task force to resolve enterprises’ troubles and suggestions on administrative procedures.
  - Adoption rates of one-stop shop mechanism:
    - 63 out of 64 provinces under the direct control of the central government (except Dien Bien province) have introduced the one-stop shop mechanism as a compulsory requirement for 4 provincial departments: Department of Labour, Invalids and Social Affairs (DOLISA), Department of Natural Resources and Environment (DONRE), Department of Planning and Investment (DPI) and Department of Construction (DOC).
    - For other departments and services, the rate of applying the one-stop shop mechanism has achieved 47.6%.
    - At the district level, 98% of the agencies and units have introduced this mechanism.
    - At the communal level, the rate is 64.9%.
  - Fee and charge reforms: 140 types of fees and charges imposed by the central government and 203 other types of fees and charges once imposed by the local governments were cancelled in the last 5 years.
- Organizational reforms of the state administrative apparatus (5.1.2)
  - By the end of 2005, functions, tasks and organizational structure of central ministries and sectors had been adjusted and clarified, largely overcoming past overlaps and ensuring the principle “one task goes to one specific implementing agency”.
  - Initial separation of activities by state administrative agencies from those by state non-profitable providers of public services was undertaken through organizational, personnel and public financial institutions.
  - Organizational structure of local professional agencies was renovated and re-arranged to match central-level sectoral structures and local conditions.
- Development of state employees and staff (5.1.3)
  - Management of state employees has been continuously reformed toward clearer division of responsibility and stronger decentralization.
  - Authority and accountability of heads of administrative agencies and non-profitable public service providers have been considerably increased to fit autonomy and self-accountability mechanisms.
  - Staff training and capacity strengthening focused on the staff training program for 2001-2005; total number of government employees and officers receiving training over the past 5 years has reached about 2.51 million people, including:
    - 407,000 people trained on political theory,
    - 894,000 people trained on state management knowledge,
    - 1.08 million people trained on professional and specialized subjects,
    - 37,000 people trained on foreign languages,
    - 96,000 others trained on IT skills.
  - After the vote for the People’s Councils for the term 2004-2009, nearly 292,000 members of the People’s Councils at different levels were trained on operational skills and knowledge in the year 2004 alone.
  - Policy on social insurance and salary had initial reforms contributing to stabilization of governmental employees’ life; the proposal on salary policy reforms was adjusted in roadmap and implementation steps relative to the original objective for 2005.
- Reforms of public finance (5.1.4)
  - Public finance reforms achieved renovations in budget decentralization, increasing autonomy, competence and accountability of ministries, sectors and local authorities in budget and financial management.
  - Rights and responsibility of provincial People’s Councils in making local budget decisions have been assured.
  - Budget management continued to be renovated; budget revenues increased and were collected timely.
  - Allocation of investment capital and budget ceilings were renovated to create autonomy for agencies using funds and reduce unnecessary procedures.
  - Regulation on financial disclosure issued along with Decision No. 192 dated 16 November 2004 by the Prime Minister has been widely applied, assisting in:
    - developing ownership of government employees, labour collectives and the people in reviewing and monitoring use and management of capital and state assets;
    - mobilization and utilization of people’s contributions according to law;
    - timely detection and prevention of violations to the financial management regime;
    - ensuring effective use of the state budget, economical practice and waste prevention.
  - Financial mechanism for different organizational structures in the state administrative system has also been initially renovated.

*Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005*

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Part II: The Implementation of Incentive Policies to Promote Growth and Poverty Reduction in 2004 - 2005

### Pilot mechanisms for fixed employee numbers, fixed administrative budgets, and reformed financial mechanisms
- Pilot coverage and scale:
  - After more than 4 years of pilot implementation, 53 out of 64 provinces and cities directly controlled by the central government and 3 ministries have done pilot activities.
  - Local provinces have applied these mechanisms to 682 administrative agencies, equivalent to 36% of the total number of administrative agencies in the whole province.
  - MOLISA, MOT and MOF are now piloting the same mechanisms in more than 160 of their administrative agencies.
- Reported effects and operational changes:
  - Piloted agencies were given the right of autonomy and self-accountability in arranging organizational structure, implementing economical practices, and increasing working efficiency and effectiveness.
  - Mechanism enabled employee participation in monitoring the proposal-based revenue mechanism, promoted economical and effective use of funds through internal revenue-expenditure regulations, and established standard cost norms for agencies.
- Staff income effects:
  - The income level of the staff has been increased by a step.
  - Through different measures of savings, the income level has been increased by about 130,000 VND/person/month on the average, compared with the salary rate before application of the mechanism.

### Financial autonomy for state non-productive but revenue-earning agencies
- Coverage by end-2004:
  - 37 out of 43 ministries and central agencies and 52 out of 64 provinces and cities directly controlled by the central government had given the right of financial autonomy to more than 5,900 state non-productive revenue-earning agencies, accounting for 43% of the total number of agencies.
  - Of which, the ministries and central agencies gave the right of autonomy to more than 530 units, accounting for more than 78%; and the local authorities gave the right of autonomy to approx. 5,400 units, accounting for more than 40%.
- Outcomes after more than 3 years of implementing Decree 10:
  - Strengthened financial autonomy in state non-productive revenue-making agencies.
  - Ensured effective and economical expenditures based on internal cost norms and regulations established by the agencies themselves.
  - Improved regulation on transparency and disclosure in management and utilization of public financial resources.
  - Increased income level for labourers (by 10 to 15% on the average during the recent time).

### Implementation of the regulation on grassroots level democracy
- Legal and policy steps:
  - Seven years of implementation demonstrated the soundness and popularity of the regulation.
  - Announcement No. 159-TB/TW dated 15 November 2004 summarized 6-year implementation results of Directive No. 30-CT/TW and provided further instructions to expand and improve grassroots level democracy regulation.
- Institutional pilots and drafts under development:
  - Ministry of Home Affairs: developing a pilot project on direct vote for chairmen of commune-level People’s Committees.
  - Vietnam’s Fatherland Front: drafting a Decree on its participation in monitoring the party’s members at their residence.
  - Vietnam’s Labour General Confederation: leading a draft Decree on implementing grassroots level democracy regulation within limited companies and shareholding companies.
  - Ministry of Health: formulating draft Decree for public hospitals.
  - Ministry of Education and Training: formulating draft Decree for public universities.
  - Vietnam’s Institute of Social Sciences: formulating draft Decree for research institutes.
- Local-level actions and information disclosure:
  - Announcement No. 159 was implemented through review and improvement of Steering Committees and local regulations and procedures.
  - Grassroots motto incorporated: “Informed to people, consulted with people, done by people, supervised by people”.
  - Localities disclosed state law and policy documents, local socio-economic development situation, land use planning, poverty reduction projects and programs, rate of contributions to different funds, and different types of tax.
  - Diverse disclosure methods used: mass media, postings at People’s Council/Committee offices, administrative centres, community meetings, mobile cinema groups, and review meetings.
- Effects on public participation and dispute resolution:
  - People gained opportunities to discuss construction works; faster and smoother implementation leading to practical socio-economic effects.
  - Community consultations improved outcomes for sensitive issues such as land acquisition, compensation and resettlement (noted examples: Danang, Ho Chi Minh city, Binh Duong).
  - Most wards, districts and communes established the People’s Inspectorate with encouraging initial performance.
  - Communal authorities implemented tasks on people’s right of supervision and monitoring, including operations of communal People’s Council and Committee, staff performance, preferential policies for war invalids and martyrs’ families, social insurance and social aids policies.
  - Claims and denouncements by citizens have been resolved more timely; inspection results and disciplinary measures are made public.
- Measured impacts from investigations:
  - Issues that people are encouraged to discuss and directly involve in decision making: 98.9%.
  - Issues that need to be consulted with the people before the responsible authorities make decision: 97.9%.
  - People’s right of supervision and inspection achieved the lowest level of efficiency among measured tasks: 94.1%.
- Broader governance and social effects:
  - Regulation assisted development of people’s ownership at grassroots levels, creating a more democratic and open atmosphere and strengthening people’s belief in the social regime.
  - Strengthened local political system, improved staff quality, and renovated working style towards higher democracy and disclosure.
  - Communal staff reformed communication and working styles to be closer to the people, listening more to opinions and feedback, minimizing red tape and authoritarian behaviour.

### Part III introduction: CPRGS implementation process of 2004-2005 — capacity building and planning support
- General progress:
  - The CPRGS has been implemented for three years with encouraging results.
  - The Inter-ministerial Working Group, supported by donors and international organizations, coordinated with line ministries, agencies and localities to organize empirical activities for CPRGS implementation.
  - Ongoing goals include raising awareness, building capacity to link CPRGS goals with socio-economic development programs, organizing consultation for socio-economic development programs, and establishing a regime for plan implementation supervision and assessment.
- Activities for building capacity of agencies, levels and localities:
  - MPI published and widely circulated the Strategy among line ministries, agencies and localities; seminars and training courses presented key Strategy contents and implementation guidance to raise awareness of employees at various levels.
  - Many ministries and agencies held workshops on methods of building socio-economic development plans intertwined with CPRGS goals, focusing on:
    - Introducing new approaches in building socio-economic development plans intertwined with poverty reduction and growth goals; methods and tools in building strategic plans, planning on the basis of results and planning with participation; instructions on selection of impacts, and methods for supervision and assessment of plan implementation through indicators.
    - Building the framework of plans including identifying priorities, development orientation and indicators for plan supervision and assessment; introducing key contents and emphasizing close combination between growth and poverty reduction; plan consultation.
  - Continuing support to localities:
    - MPI, in coordination with the CPRGS Inter-ministerial Working Group and donors, assisted localities to build capacity by organizing seminars and training courses on intertwining CPRGS goals with local socio-economic development plans.
    - Assistance helped localities collect, process and analyse information for building local plans, build capacity at provincial level, and enhance planning skills for provincial departments, agencies and offices.
    - Support included organizing training, improving skills for building the five-year socio-economic development plans of 2006-2010 in combination with growth and poverty reduction, and building mechanisms and systems for supervision and assessment.
    - Several provinces, supported by donors, collected public opinion on the local five-year socio-economic development plans of 2006-2010 to strengthen unity in implementation.
    - Many localities are working with donors to finalize 2006-2010 plans with special attention to public consultation and building a system of plan supervision and assessment.
- Organizing training courses on intertwining CPRGS with local socio-economic development plans:
  - Over past years, aided by central agencies and donors, several localities organized training courses tailored to participants (leaders and specialists).
  - Training course objectives and contents included:
    - Enhance awareness of employees and people on CPRGS contents through an overview of building process, key contents and implementation process.
    - Introduce principles, procedures, methods and contents of building annual and five-year socio-economic development plans and the relationship between CPRGS and local plans; provide instructions on intertwining CPRGS contents with local plans; model system of building local plans and reporting on their implementation.
    - Provide instructions on planning with participation and planning on the basis of results; necessary tools for assessment and analysis in the planning process.
    - Build plans in combination with financial resources; introduce principles and criteria in resource allocation for growth and poverty reduction goals; analyse and assess existing local resources; assess suitability of budget plan and local development goals; solutions to mobilizing resources for local socio-economic developments.
    - Introduce contents, scope and methods for calculating targets and socio-economic indicators in planning and methods of data collecting; work of monitoring, supervising and assessing plan implementation.
    - Based on local specific conditions, participants discussed difficulties and outstanding problems and solutions in planning socio-economic development in combination with growth and poverty reduction; analyse and clarify linkage between Public Investment Programs and CPRGS to build appropriate mechanisms and criteria to ensure success of Public Investment.

*Viet Nam Growth and reduction of poverty annual progress report of 2004 - 2005*

### Part III: CPRGS Implementation Process of 2004 - 2005

### _cr06340 - Part III: CPRGS Implementation Process of 2004 - 2005

### Pilot planning at selective locations
- Purpose: introduce and practice planning methods and skills in combination with CPRGS at district, commune and village levels.
- Planning tools introduced and practiced: identifying priorities through comparing pairs, using issue trees, target trees and SWOT analysis matrix.
- Application: building 2006-2010 socio-economic development plans in the locality.
- Training content focused on:
  - Introduce the goals and significance of planning work in the new methods in combination with CPRGS and implementation methods.
  - Introduce planning tools and practice skills of using planning tools at district, commune and village levels.
  - Introduce a system of targets and standard forms used at district, commune and village levels.
  - Introduce steps in planning at district, commune and village levels.

### Completion and public consultation on the 2006-2010 five year socio-economic development plan
- Renovations implemented per Directive #33/2004/CT-TTg of the Prime Minister included:
  - More contents of the Strategy goals and tasks added to the 2006-2010 five year socio-economic development plan, especially in society and poverty reduction (stabilizing and raising living standards of ethnic minority people; activities concerning religions and freedom of beliefs; gender equality, raising women position and protecting children’s rights; youth development; developing the network of social security to assist the disadvantaged and the poor).
- Consultation activities:
  - MPI coordinated with concerned ministries and agencies to solicit comments.
  - Four seminars held in Hanoi, Ho Chi Minh city and Da Nang to collect opinions of managers, scientists and think-tanks.
  - Public consultations conducted through NGOs in Gia Lai, Ninh Thuan, Cao Bang, Quang Tri, Ben Tre and Ninh Binh.
  - Consultation meeting with donors on September 7-8.
  - NGO and sectoral workshops included VCCI, Vietnam Economic Science Association, and a Seminar on gender consultation organized by MPI, National Committee for Women’s Progress, the World Bank, ADB and the National Institute for Social Sciences and Humanities.
- Key recommendations from participants:
  - Real renewal in thinking and perspective to adapt to integration.
  - Various levels and agencies should take more initiative in developing society and economy.
  - More attention to monitoring, supervising and assessing plan implementation.
  - More thorough regional analysis to identify priorities and development orientations.
  - On the basis of reality analysis, recommend specific solutions along the roadmap to address outstanding issues and achieve five-year plan goals.
- Post-new poverty line action: MOLISA should work with concerned agencies and localities to re-assess the poverty situation in the localities accordingly.

### Pilot application of the medium term public expenditure framework (MTEF)
- Ministry of Finance cooperated with related ministries and agencies to prepare pilot MTEFs in:
  - Ministries: Ministry of Training and Education, Ministry of Health, Ministry of Transportation and Communication.
  - Provinces: Ha Noi, Phu Tho, Binh Duong and Vinh Long.

### Manual of instructions on building socio-economic plans with CPRGS
- MPI, aided by donors and experts, completed a draft manual to intertwine CPRGS targets and tasks with local socio-economic development plans.
- Aim: introduce new methods, tools, targets and indicators used internationally and provide uniform understanding of national, industrial and local plans in a market economy.
- Seminar on November 14, 2005 to collect initial opinions; seminar participants emphasized:
  - Need to clarify scope and levels using the manual.
  - Manual should be in simple and comprehensible style.
  - Select practical contents and pair them with a roadmap for implementation.

### Mechanism to supervise and assess implementation of the 2006-2010 plan and 2006 plan
- Emphasis: supervising and assessing results as an important tool for policy making, planning, supervising and assessing impacts on sustainable socio-economic development.
- Components under development:
  - Improving legal environment for statistical activities.
  - Enhancing capacity of organizations in charge of supervision and assessment.
  - Raising efficiency of supervision and assessment mechanisms.
  - Building basic data for MDGs and Vietnam Development Goals.
- Statistical actions:
  - In implementing the Statistic Law, statistics office cooperated with Ministries and agencies to build a regime of national standards and submit it to the Prime Minister Office as a legal foundation for supervision and assessment of plan implementation.
  - MOLISA, in coordination with GSO, built a method for poverty line determination, submitted to the Prime Minister Office and approved; intended to help assess national poverty rate and compare regionally and globally.
- Supervision and assessment mechanisms:
  - State offices and agencies responsible for regular reports on implementation results of socio-economic development targets and poverty reduction.
  - Promotion of supervision and assessment by NGOs, Institutes of Science Research, Universities and the people to improve objectivity and completeness.
  - MPI coordinating with GSO and other ministries/agencies to formulate a framework of supervision and assessment focusing on: enhancing capacity of functional organizations; forming a legal corridor; developing monitoring and evaluation indicators.
  - Increase quantity and quality of information sources; diversify information collection channels (surveys, ministry/agency/locality reports, household data).
  - Implement Government Decision on community supervision to bring into full play the role of supervising plan implementation and selecting schemes of local resource allocation proposed by people-elected agencies, government bodies, NGOs and the people.

### Difficulties and challenges in implementing the CPRGS
- (1) Awareness:
  - Gap remains between acknowledgement and requirements for implementing CPRGS across ministries, agencies and localities; need for more publicity to raise awareness among leaders and planners to intertwine CPRGS goals with socio-economic development plans.
- (2) Capacity of employees:
  - Implementation staff fail to meet quantitative and qualitative requirements, especially at provincial, district and commune levels; incompetence negatively affects intertwining CPRGS with local plans.
- (3) Central support to localities:
  - Support by central agencies to local authorities in intertwining CPRGS with local plans has not been well regulated; no specific programs built to support localities.
- (4) Lack of local dynamism:
  - Ministries, agencies and localities have not demonstrated dynamics and often await central or donor support, negatively affecting local intertwining processes.

### Recommendations for future implementation of the Strategy
- (1) Enhance coordination among ministries, agencies and localities in formulating socio-economic development plans with integration of CPRGS.
  - Build appropriate mechanisms for localities to effectively carry out supervision and assessment.
- (2) Enhance capacity for building and implementing socio-economic development plans combined with growth and poverty reduction, especially at local levels.
  - Continue organizing training courses for planners in key local Departments and Divisions.
  - Capacity building contents include:
    - First, capacity to collect and analyse information;
    - Second, capacity to forecast in planning;
    - Third, capacity to govern plan implementation;
    - Fourth, capacity to assess and supervise plan implementation.
- (3) Expand public consultation processes on socio-economic development plans at all agency levels.
- (4) Carry out supervision and assessment for plan implementation:
  - Maintain work on building mechanisms, targets and indicators to supervise and assess plan implementation.
  - GSO to coordinate with ministries, agencies and localities to build a system of supervision and assessment of socio-economic development plan implementation.
- (5) Continue to intertwine CPRGS goals with socio-economic development plans:
  - Close guidance needed from various levels and agencies, especially the Steering Committee on CPRGS implementation.
- (6) Complete the manual of instructions on building socio-economic plans combining growth and poverty reduction as a foundation for ministries and agencies to build five-year and annual plans.
- (7) Mobilize resources maximally:
  - Domestic resources are limited; take measures to mobilize domestic resources, including those "lying hidden within the people".
  - Further actions to mobilize more external resources for growth and poverty reduction goals.

### Part IV — Challenges and solutions for 2006-2010: overview of challenges
- Strategic context:
  - Vietnam is implementing Socio-Economic Development Strategy for 2001-2010. GDP will double that of 2000 in 2010.
  - From now on to 2010, Vietnam strives to get out of poverty, underdevelopment and the statehood of a low-income developing country; raise GDP per capita from 640 currently to 950-1000 USD in 1010; improve material, cultural and spiritual life; record important steps towards sustainable development; establish foundation for acceleration of modernization and industrialization; preserve political stability, social order and security; firmly preserve independence, sovereignty, territorial integrity and national security; enhance Vietnam’s position on the world arena.
- Economic growth challenges:
  - Vietnam’s BCI competitiveness ranks 79/103 countries.
  - Limited production results in GDP accounting for only 0.1% of the world output.
  - Vietnam is among the low-income countries; population income and consumption inadequate to create a springboard for production and market development.
  - Financial and monetary systems are inadequate.
  - Sectoral and regional production structure fails to adapt to domestic and international market evolution.
  - Technology, production organization and corporate administration show low innovation.
  - Socio-economic infrastructure fails to meet development demand; technological level and technology transfer capacity remain weak, lagging behind regional countries.
  - Commitments in AFTA, WTO and other international agreements increase pressure on Vietnamese enterprises whose competitiveness remains weak.
  - Forecasts indicate financial, monetary and price markets will witness complicated evolutions and exert negative impact if no effective solutions are in place.
  - Fiercer competition for direct and indirect investment is imminent; global issues (diseases, environmental pollution, scarce input materials, rich-poor gap) will pose strong multi-directional impacts.
- Poverty reduction and social challenges:
  - Poverty reduction is unsustainable; many households remain poor with high risk of falling back into poverty due to H5N1, crop failure, investment loss, dropped agro product price, natural disasters, unstable employment.
  - Rich-poor gap widening between regions and population groups; poverty rates remain high in rural, mountainous and midland areas (North-eastern, North-western, the Highlands and Central northern regions) and among ethnic minorities.
  - Income gap between urban and rural areas, economic zones, the rich and the poor is increasing; poverty reduction rate is slowing down.
  - Poverty-urbanization and migration relationship requires timely solutions.
  - Poor have limited access to assistance policies; some poor communes rely on State assistance rather than actively escaping poverty.
  - Some localities under-report poverty rates, excluding poor households from CPRGD policies.
  - Poverty reduction program fails to cover all poor households due to low poverty line and lack of government resources; definition of poor households incorrect in some localities.
  - Capital allocation for projects and localities is not coherent and transparent; some mechanisms and policies inappropriate for the poor.
  - Inadequate grassroots implementation reduces program effectiveness.
  - Management and implementation uneven across localities; poverty reduction staffs are inadequate in quantity and capacity; communal staff hold several positions and are not well trained.
  - Program monitoring and assessment not systematic or synchronous; monitoring and assessment index not unified.
  - Education: differences in access and quality remain; educating cost high relative to income; low enrolment and completion in remote and low-income families; education quality, training programs, teaching staff and facilities inadequate; financial resource for education insufficient.
  - Health: weaknesses in public health care; health service not innovated to meet demand; difficulties in providing health service to poor, mountainous, remote areas and ethnic minorities; preventive health care inadequate; environmental hygiene and food safety not fully under control.
  - Health insurance, hospital fees and health examination and treatment for the poor inadequately addressed; resource mobilization for Health Examination and Treatment Fund for the Poor remains low.
  - HIV/AIDS exposure high; infection rate increasing, particularly among the young. Risk of avian flu outbreak high.
  - Management of private health and pharmaceutical service inadequate; weaknesses in management, distribution and use of medicine.
  - Environmental concerns: over-exploitation and squandering of natural resources polluting and degrading environment and ecosystems; rapid urbanization causing overexploitation of underground water, surface water and air pollution, solid waste abundance; environmental protection capacity and effect not meeting sustainable development requirements; environmental management at regional, inter-regional and inter-sectoral levels inadequate.

*Viet Nam Growth and reduction of poverty annual progress report of 2004 - 2005*

### Part IV: Challenges and Solutions to Growth and Poverty Reduction for 2006-2010 and the Implementation

### Part IV: Challenges and Solutions to Growth and Poverty Reduction for 2006-2010 and the Implementation

### Major challenges (social, human resources, cultural and governance)
- State environment administration is at central, sectoral and provincial, not yet at district and commune level.
- Low human resource quality does not meet the industrialization demand. Mechanisms and policies are not in place to raise labor quality.
- Population distribution is inappropriate; migration is completed and uncontrollable. Birth rate is increasing. More children need protection from drugs, HIV/AIDS, sex abuses, illegal activities, injury accidents, etc.
- Cultural and information management does not meet social and market demand. Information quality and quantity are limited and unattractive; public opinion orientation and information dissemination are inadequate.
- Fine Vietnamese traditions are threatened. Cultural and information development in less privileged areas fail to meet requirements.
- The fight against bad habits and moral degrading fails to have synchronous measures and is not effective. Organized crimes and corruption are on the rise. Drug addition and prostitution are witnessing complicated evolution.
- Public sport and physical activities are uneven and of low quality, particularly in rural, remote and ethnic minority areas. Weaknesses remain in training and moral education for athletes.
- Facilities and staff for public sports are inadequate. School sports are limited. Negative activities in sports competition have not been prevented yet.

### 2. Goals and targets of socio-economic development and poverty reduction (2006-2010)
- Overall objective (draft of the 5 year socio-economic development plan, 2006-2010):
  - Accelerating economic growth and obtaining major improvements in economic efficiency and sustainability in order to escape from underdevelopment.
  - Improving people’s material, cultural and spiritual standards.
  - Establishing foundations for intensifying industrialization and modernization and promoting the development of the intellectual economy.
  - Maintaining political stability and social order and security.
  - Strengthening national independence, sovereignty and security.
  - Enhancing Vietnam’s status in the region and in the international arena.
- Main strategic emphases:
  - Liberating and promoting production forces, capitalizing on all potential and resources to achieve breakthroughs in infrastructure upgrading and economic structure shifting, improving economic efficiency and competitiveness, and accelerating economic growth to raise Vietnam’s current status as a low-income, developing country.
  - Further undertaking market reforms and adopting market rules. Establishing all forms of markets comprehensively and promoting institutional building of the socialist-oriented market economy.
  - Intensifying international economic integration and promoting foreign economic relations in combination with enhancing economic self-reliance.
  - Encouraging research and technology innovation, improving training and education, and enhancing the quality of human resource to meet requirements of industrialization, modernization and development of the intellectual economy.
  - Making progress in culture, intellectuality, morality and life style. Improving people’s health conditions. Protecting the environment.
  - Making progress in social evolution and equality, job creation, well-being, poverty reduction, social security and fighting against social vices.
  - Promoting democracy and national solidarity. Enhancing the efficiency of the socialist state under the rule of law. Making progress in administrative reform. Preventing red tape, corruption and dissipation.
  - Strengthening national defence and security, ensuring social and political stability, expanding diplomatic relations, and maintaining the peaceful and stable environment for national construction and protection.
- Note on income thresholds and projections:
  - According to some projections, the level of low-income country criterion in 2010 can rise to 900 USD per capita, meanwhile Vietnam can achieve the status of middle-income country with GDP per capita of 1,050-1,100 USD.

### 3. Policies on economic development and poverty reduction (2006-2010)

- 3.1 Economic policies
  - Strengthening economic democratization and improving the multi-sectoral market mechanism. Creating favorable conditions for business and investment activities of all citizens and enterprises. Adopting a common legal framework to ensure equality among all forms of enterprises and production belonging to all domestic and foreign economic sectors.
  - Intensifying the restructure and enhancing the efficiency of state-owned enterprises (SOE) to maintain their key role in main economic sectors and economic development. Adopting market rules in SOEs equitization. Promoting establishment and diversification of conglomerations and big corporations while maintaining the prevalence of state ownership. Implementing proper measures to reform inefficient SOEs. Abolishing monopoly through mechanisms on monitoring and regulation of monopolistic enterprises.
  - Reforming the collective sector: establishing new forms of cooperatives, diversifying ownership within the collective sector (including ownership of legal entities, individuals and collectives), encouraging different types of enterprises within the collective sector and establishment of cooperative unions. Applying business autonomy and encouraging fair competition among co-operatives.
  - Promoting the development of private enterprises: abolishing restraints on scale, sector, and location. Abolishing all discriminations against the private sector and honoring efficient private enterprises. Encouraging establishment of large-scale private enterprises and corporations.
  - Promoting business organizations jointly owned by the state, private and foreign sectors. Diversifying investment forms and mechanisms to induce domestic and foreign capital into key economic sectors.
  - Further improving policies on foreign direct investment (FDI) through the adoption of a Common Law on Investment. Recognizing the FDI sector as an important component of the socialist market-oriented economy and creating a level playing field for FDI and domestic enterprises.
  - Promoting comprehensive development of market elements and forms: developing commodity and service markets via implementation of the Competition Law; furthering trade and investment liberalization consistent with bilateral and multilateral commitments; prioritizing high-quality and high value-added services.
  - Intensifying financial market development: improving organization, scale, management, and monitoring; promoting financial international integration; developing the stock market into a main channel to attract investments; strengthening the monetary market via improved short-term capital transactions and trading of valued papers.
  - Promoting the property market by facilitating land-use rights transactions, realizing land resource potential, establishing market-price mechanisms for properties, and abolishing price discriminations.
  - Promoting the labor market: improving the legal framework, facilitating interrelation between labor demand and supply, diversifying job transactions, ensuring rights to select jobs and place of habitation, and adopting the labor contract system.
  - Promoting the technology market: facilitating transactions of technological products, promoting linkage between research and application through contract systems for enterprises and research bases, establishing venture funds, promoting supporting services (intellectual property, consultation, trading, evaluation, transfer), establishing intermediary agencies, technology transactions, technology market and incubators.
  - Adopting positive financial and monetary policies: mobilizing domestic and foreign financial resources, capitalizing on financial tools and investment forms, strengthening state mechanisms on credit and valued papers circulation, improving tax policy and reform, implementing tariff reduction schedule required by international economic integration, improving resource allocation for key sectors, encouraging private and foreign investments in national development projects, preventing dissipation and loss of financial resources, improving policies on financial and public property management, strengthening the role of the National Assembly and people’s councils in allocation and monitoring of state budget, renovating the method and process of drafting state budget to prioritize medium-term planning, strengthening financial international cooperation and integration.
  - Reforming monetary policy: adopting market rules in monetary policy formulation, encouraging application of international standards in banking, promoting non-cash payment and banking transactions, gradually enhancing convertibility of the Vietnamese currency, maintaining market-based interest rate and abolishing restraints on interest rate for foreign currencies, maintaining flexible management of market-based foreign exchange allowing greater fluctuation in accordance with financial market opening and State Bank monitoring capacity, promoting development of credit institutions, reforming the commercial bank system by strengthening the key role of commercial state banks while ensuring autonomy of and fair competition for all commercial banks.
  - Improving quality of planning: encouraging scientific assumptions, long-term vision, transparency, people’s participation and monitoring, improving economic forecasting and research, strengthening state management on planning.
  - Further reforming plan formulation and approval: intensifying democratization in plan formulation and implementation, mobilizing people’s participation in long-term plans on socio-economic development and environmental protection, ensuring linkage between planning and market development and international economic integration, prioritizing quality indicators on socio-economic development in plan formulation, intensifying monitoring and implementation of plans, constructing the law on planning.
  - Strengthening administrative reform and civil service quality: defining scale and content of state’s economic management, adjusting government and central agency functions with priority to institutional building, re-organizing government by reducing focal points and adjusting functions of ministries towards policy formulation and monitoring law enforcement, abolishing ownership of ministries and people’s committees on SOEs, separating state administration and management of public services.
  - Readjusting decentralization: enhancing authorities and responsibilities of local governments, promoting linkage among division and allocation of responsibilities, finance, organization and personnel, clearly defining local decision-making authorities while intensifying monitoring on leaders and heads of administrative agencies.
  - Readjusting organization of central agencies: reducing number of deputy heads, abolishing intermediary levels, applying contract system for services departments, promoting work allocation and surveillance.
  - Strengthening autonomy of public utility enterprises in operation, organization, personnel and finance. Applying principles of openness, democracy and people serving for state agencies and civil servants. Modernizing and streamlining state administration.
  - Encouraging participation of people’s organizations and NGOs in state and social management and reversing officializing popular organizations.
  - Conducting surveys on civil servants for planning, training and management; constructing quality standards system for evaluating civil servants; improving recruitment, evaluation and rewarding systems; reforming nomination process to encourage talents; further reforming the salary system.
  - Amending mechanisms on work allocation and enhancing local government authorities and responsibilities in civil servant management. Promoting linkage between allocation of personnel, duties and finance. Implementing principle of openness in public service activities, particularly those directly affecting citizen’s interests and in finance and expenditures.

- 3.2 Poverty reduction policies
  - National targeted program on poverty reduction objectives:
    - Contribute to reduce the poverty incidence from 22% in 2005 to 10-11% in 2010, as of the new poverty line. (Approximately 50% of poor households in equivalence).
    - Improve life conditions of poor families.
    - Narrow income gaps among different groups, especially between urban and rural areas, low land areas and mountainous areas, and rich people and poor people.
  - The program proposes 3 sets of solutions:
    - Firstly, assist poor people in getting access to production services through projects and policies on:
      - Providing incentive credits for poor people;
      - Providing land for ethnic minority groups;
      - Promoting the development of agriculture, forestry and fishery and production of poor people;
      - Upgrading infrastructure in extremely poor communes in coastal areas (extremely poor communes in mountainous areas are supported under Program 135);
      - Providing job training for poor people;
      - Establishing community development funds for poor communes;
      - Diffusing the efficient poverty reduction model.
    - Secondly, assist poor people in getting access to social services through projects and policies on:
      - Providing health care service;
      - Providing education service;
      - Providing housing and water service.
    - Thirdly, enhance quality of civil servants and raise awareness of the whole community and of poor people in particular through activities and projects on:
      - Enhancing the quality of staff undertaking poverty reduction and legal assistance for poor people;
      - Intensifying information diffusion on poverty reduction;
      - Strengthening monitoring and evaluation.
  - Implementation and targeting modalities:
    - Allocate more resources to poor communes in mountainous areas with high poverty rates based on the number of poor people and poverty index.
    - Facilitate people’s participation in the program to ensure democracy, openness and transparency.
    - Provide direct state support for poor people in terms of education, job training (through exemption or in-cash subsidies) and health care (through provision of medical insurance cards).
    - Allow people and communes escaping from poverty to further receive assistance in incentive credits, health care, and job training in the following two years.
    - Maintain investment assistance in the following year for communes in coastal area escaping from extreme poverty at the rate of 50% of annual investment support to upgrade infrastructure.
    - Provide subsidies for enterprises providing job training for and recruiting poor people at equal rate to state subsidies for poor people undertaking job training.
    - Intensify decentralization, particularly giving more authorities to communal agencies in implementation of the program.
    - Strengthen monitoring and evaluation by establishing quality index system at all levels and combining monitoring of local governments with monitoring by line ministries and agencies, the National Assembly, people’s councils, consulting agencies as well as the whole community.

### 4. Implementation arrangements for growth and poverty reduction policies (2006-2010)

- 4.1 Monitoring and evaluation (M&E) of growth and poverty policies
  - Monitoring the plan implementation and the MDGs is becoming a more and more urgent requirement of the management system and the people benefited from socio-economic development and poverty reduction.
  - Along with renovation and quality improvement of planning activities, output-based M&E has become an important tool so that policy-makers...

*Part IV: Challenges and Solutions to Growth and Poverty Reduction for 2006-2010 and the Implementation*

### Part IV: Challenges and Solutions to Growth and Poverty Reduction for 2006-2010 and the Implementation

### Part IV: Challenges and Solutions to Growth and Poverty Reduction for 2006-2010 and the Implementation

### Monitoring and Evaluation (M&E) arrangements: improvements and components
- M&E arrangements are being improved in terms of:
  - (1) enhanced legal environment for statistical works;
  - (2) increased capacity of institutions and organizations in charge of M&E;
  - (3) improved effectiveness of M&E mechanisms;
  - (4) establishment of database for MDGs and VDGs.
- 4.1.1 Enhanced legal environment for statistical works:
  - Introduce and enforce the Statistical Law and Decree 40/2004/ND-CP regarding detailed provisions and instructions on implementation of some provisions in the Statistical Law.
  - National statistical indicator system established by the statistical sector in coordination with other ministries; expected to be submitted to and approved by the Prime Minister in 2005.
  - Poverty line used for developing 2006 - 2010 plan and for conducting poverty reduction M&E defined jointly by MOLISA and GSO and approved by the Prime Minister to enable nationwide consistent poverty assessment.
- 4.1.2 Increased capacity of M&E institutions:
  - Documents issued to specify functions and tasks of agencies under GSO and provincial Statistical Offices.
  - Statistical offices of ministries and sectors being improved in organizational structure per the Statistical Law.
  - Household living standards surveys continuously improved and contribute more to M&E of national poverty reduction targets.
- 4.1.3 System of M&E mechanisms:
  - Current system characterized as objective, transparent, open and community oriented; monitoring aligned with constitutional rights and mandates of democratic institutions.
  - State and authorized agencies required to make periodical progress reports on socio-economic development and poverty reduction objectives.
  - GSO and governmental agencies collect, consolidate and assess implementation progress; statistical reports are major official documents for monthly, quarterly and annual government and provincial/municipal reviews.
  - M&E by NGOs, research institutes, universities and the public to be strengthened for greater objectivity and comprehensiveness.
- 4.1.4 Establishment of database for MDGs and VDGs:
  - VDD 1990-2003 provides information on 48 MDGs indicators and 35 VDGs indicators from 1990 to 2003 for Vietnam, including concepts, definitions, calculation method, classification, data source, and numeral information.
  - VDD 1990-2003 is stored in VietInfo 4.0 database (DevInfo 4.0 customized by UNICEF and GSO) with utilities for maps, charts, graphs, tables and Microsoft Office connectivity.
  - GSO responsible for management, maintenance, update and public access of VietInfo 4.0; VietInfo 4.0 and VDD 1990-2003 publicized in early 2005 and to be made available to interested users.

### Implementation arrangements and division of responsibilities (2006-2010)
- Management and implementation based on multidisciplinary coordination with central ministries/sectors orienting activities, formulating policies and criteria for support targets, resolving provincial/local difficulties, recommending resources, and monitoring.
- Horizontal relationship across ministries and sectors to implement objectives and targets.
- Division of responsibilities:
  - a) Ministry of Planning and Investment (MPI):
    - Lead and coordinate with Ministry of Finance for formulating plans to mobilize domestic and external resources, including ODA, FDI, and other economic sectors; balance accumulation and consumption; balance investment for development.
    - Coordinate to study and consolidate national financial balance (including state budget balance); international payment balance; import - export balance; and labour - employment balance.
    - Provide instructions on formulation and consolidation of 5 year socio-economic development plans for 2006-2010.
    - Review formulation process of 5 year plans in other ministries, sectors, provinces and centrally controlled cities.
    - Prepare consolidated 5 year socio-economic development plan 2006 - 2010 for the whole country and submit to the Government, the Party’s leading agencies and the State.
  - b) Ministry of Finance (MOF):
    - Lead coordination with MPI and other ministries to study and establish balances such as national financial balance, state budget balance, central - local budgets balance; formulate plans to mobilize resources to the state budget; prepare government and national debt plans.
  - c) GSO:
    - Coordinate with MPI and other agencies to define the system of planned indicators and calculated indicators, especially those reflecting quality, as guidance for ministries, sectors and provinces in formulating 5-year plans.
  - d) Ministries/sectors, state-owned general companies:
    - Coordinate with MPI to formulate own 5-year plans and major balances for their areas.
    - Agencies managing national target programs (Program 135, Poverty Reduction and Employment Program, 5 million ha afforestation Project and other large projects) to lead coordination with MPI, MOF and other ministries/provinces to assess implementation status and effectiveness; study and recommend continuation, expansion and implementation mechanisms for the next 5 years.
  - e) People’s Committees of provinces and centrally controlled cities:
    - Provide instructions, organize and direct DPI and DOF to work with other departments/services to formulate 5-year socio-economic development plans.

### Key findings, targets and indicators (selected major socio-economic and poverty reduction indicators, period 2004 - 2005)
- A ECONOMIC INDICATORS (Units and values shown for 2004 and Estimated 2005 where provided)
  - 1 Economic growth %: 7.8 (2004), 8.4 (Estimated 2005)
    - Agriculture, forestry, fishery %: 4.4 (2004), 4.1 (Estimated 2005)
    - Industry %: 10.2 (2004), 10.7 (Estimated 2005)
    - Services %: 7.3 (2004), 8.4 (Estimated 2005)
  - 2 Rate of increase of production value:
    - Agriculture, forestry, fishery %: 5.8 (2004), 5.2 (Estimated 2005)
    - Industry %: 16.0 (2004), 16.5 (Estimated 2005)
  - 3 Economic structure:
    - Agriculture, forestry, fishery %: 21.8 (2004), 20.7 (Estimated 2005)
    - Industry %: 40.1 (2004), 40.8 (Estimated 2005)
    - Services %: 38.1 (2004), 38.5 (Estimated 2005)
  - 4 Labour structure:
    - Agriculture, forestry, fishery %: 58.6 (2004), 57.1 (Estimated 2005)
    - Industry %: 17.4 (2004), 17.9 (Estimated 2005)
    - Services %: 24.0 (2004), 25.0 (Estimated 2005)
  - 5 Import - export:
    - Total export turnover Bil. USD: 26.5 (2004), 31.8 (Estimated 2005)
    - Rate of increase of export %: 31.5 (2004), 20.0 (Estimated 2005)
    - Total import turnover Bil. USD: 32.0 (2004), 37.3 (Estimated 2005)
    - Rate of increase of import %: 26.5 (2004), 16.7 (Estimated 2005)
- B SOCIAL AND POVERTY REDUCTION INDICATORS (selected objectives and indicators)
  - Objective 1: Reduced poverty rate
    - By 2010 reduce by 2/5 the poverty rate according to international standard, compared with year 2000 (32% in 2001 to about 20% in 2010). %: 24.1 (2004)
    - By 2010, reduce by 3/4 the food poverty rate, compared to year 2000 %: 7.8 (2004)
    - By 2005, reduce by 2/5 the poverty rate and by 2010, reduce by 3/5 the poverty rate compared to year 2000 according to the (old) standard of the NTP on Poverty Reduction and Employment (from 17.2% in 2000 to about 5% in 2010). %: 8.3 (2004), 7 (Estimated 2005)
    - Number of households out of poverty Thousand families: 300 (2004)
  - Objective 2: Universal education and improved educational quality
    - Increase the rate of admission to primary schools among children of the right age to 97% in 2005 and 99% in 2010. %: 94.4 (2003-2004)
    - Increase the rate of admission to secondary schools among children of the right age to 80% in 2005 and to 90% in 2010. %: 76.9 (2003-2004)
    - Number of provinces achieving universal secondary education Province: 25 (2004), 31 (Estimated 2005)
    - Number of kindergarten’s pupils Thousand children: 2,500 (2004), 2,600 (Estimated 2005)
    - Number of primary school students Thousand students: 7,800 (2004), 7,500 (Estimated 2005)
    - Number of secondary school students " : 6,700 (2004), 6,600 (Estimated 2005)
    - Number of tertiary school students " : 2,750 (2004), 3,000 (Estimated 2005)
    - New students in universities and colleges „ : 320 (2004), 346 (Estimated 2005)
    - New students in professional high schools " : 250 (2004), 267 (Estimated 2005)
    - New technical workers " : 1,153 (2004), 1,181 (Estimated 2005)
    - Post graduates " : 14.5 (2004), 15.6 (Estimated 2005)
    - Retrained staff " : 44 (2004), 54 (Estimated 2005)
  - Objective 3: Gender equity and enhanced position for women and assured rights for girls
    - Increase the number of female delegates in elective agencies of all levels %: 23 (2004)
  - Objective 4: Reduced birth rate, mortality rate and malnutrition rate in children
    - Reduce the under-one mortality rate to 30‰ by 2005 and 25‰ by 2010 ‰: 18 (2004), 18 (Estimated 2005)
    - Reduce the under-five mortality rate to 36‰ by 2005 and 32‰ by 2010 ‰: 32.8 (2004), 30 (Estimated 2005)
    - Reduce the under-five malnutrition rate to 25% by 2005 and 20% by 2010 %: 26.6 (2004), 25 (Estimated 2005)
    - Decrease of birth rate ‰: 0.37 (2004), 0.40 (Estimated 2005)
    - Average population Mil.people: 82.0 (2004), 83.2 (Estimated 2005)
    - Population growth rate %: 1.44 (2004), 1.37 (Estimated 2005)
    - Proportion of communes with health care stations %: 99 (2004), 100 (Estimated 2005)
    - Proportion of commune level health care stations with medical doctors %: 65.4 (2004), 65.4 (Estimated 2005)
    - Total number of patient beds Thousand beds: 200 (2004), 205 (Estimated 2005)
    - Ratio of patient beds/10,000 people Bed: 23.0 (2004), 24.7 (Estimated 2005)
  - Objective 5: Maternal reproductive health
    - Reduce the maternal mortality rate to 80/100,000 live births by 2005 and to 70/100,000 by 2010, with special focus to disadvantaged areas 1/100,000: 85 (2004), 80 (Estimated 2005)
  - Objective 6: Prevention and control of HIV/AIDS, malaria and other diseases
    - Control the HIV/AIDS infection rate by 2005 and by 2010, reduce by half the incidence rate of increase (cumulative figure) People: 90,400 (2004), 99,700 (September) (Estimated 2005)
  - Objective 7: Ensured environmental sustainability
    - Increase the forest cover from 33% in 1999 to 38% in 2005 and 43% in 2010 %: 37.0 (2004), 37.8 (Estimated 2005)
    - By 2010, ensure that there is no more slums in urban areas and no more temporary houses in rural areas %: 25 (Estimated 2005)
    - By 2010, strive to collect and safely transport 100% of solid and sanitary wastes to disposal areas %: 65 (Estimated 2005)
    - Ensure accessibility to clean water for 60% of rural population and 80% of urban population in 2005 and for 85% of rural population in 2010 %: 58 (2004), 62 (Estimated 2005)
  - Objective 8: Ensure essential infrastructure for the poor people, communes and communities
    - By 2005, 80% of poor communes and by 2010, 100% to have essential infrastructure (small irrigation, schools, communal health stations, transport roads, lighting, domestic water, post office, cultural houses, meeting halls, markets, etc.)
    - Number of communes having autoroutes connecting to the commune’s centre %: 94.5 (Estimated 2005)
    - Proportion of extremely disadvantaged communes having communal/intercommunal markets %: 50 (Estimated 2005)
    - By 2005, expand the national electricity network to the centre of 900 poor communes, and ensure that 90% of the poor communes having electricity %: 94.3 (Estimated 2005)
  - Objective 9: Job creation
    - Create jobs for about 1.4 to 1.5 million people /year Mil. People: 1.56 (2004), 1.6 (Estimated 2005)
    - Rate of working time use in rural areas %: 78.3 (2004), 80 (Estimated 2005)
    - Reduce the proportion of unemployed workers in urban areas to about 5.4% of the people at working age by 2005, and to less than 5% by 2010 %: 5.6 (2004), 5.5 (Estimated 2005)
  - Objective 10: Development of information culture, improvement of the people’s spiritual life, and preservation of ethnic minorities’ culture
    - By 2005, ensure that 95% of households having accessibility to the service of Radio the Voice of Vietnam %: 94 (2004), 95 (Estimated 2005)
    - By 2005, ensure that more than 95% of the households having accessibility to the service of Television of Vietnam %: 88 (2004), 90 (Estimated 2005)
    - Number of fixed telephone sets per 100 people Set: 12.6 (2004), 17.1 (Estimated 2005)
    - Proportion of communes having telephone %: 98 (2004), 100 (Estimated 2005)
    - Number of historical relics maintained and restored Relic: 320 (2004), 330 (Estimated 2005)
  - Objective 11: Reduced vulnerability and developed social welfare system to support disadvantaged and poor people
    - 40% of average income level of the poorest consumer group compared with the consumption level of the same group in 2000; 90% by 2010. %: (no numeric value provided for 2004/2005 in the source)

*Viet Nam Growth and reduction of poverty annual progress report of 2004 - 2005*

### 1. Some major indicators

### 1. Some major indicators

### A. ECONOMIC INDICATORS
- Economic growth %: 2001 6.9; 2002 7.08; 2003 7.34; 2004 7.8; Est. 2005 8.4
  - Agriculture, forestry, fishery %: 2001 3.0; 2002 4.2; 2003 3.6; 2004 4.4; Est. 2005 4.1
  - Industry %: 2001 10.4; 2002 9.5; 2003 10.5; 2004 10.2; Est. 2005 10.7
  - Services %: 2001 6.1; 2002 6.5; 2003 6.5; 2004 7.3; Est. 2005 8.4
- Rate of increase of production value:
  - Agriculture, forestry, fishery %: 2001 4.7; 2002 6.5; 2003 5.5; 2004 5.8; Est. 2005 5.2
  - Industry %: 2001 14.6; 2002 14.8; 2003 16.8; 2004 16.0; Est. 2005 16.5
- Economic structure (% of GDP by sector):
  - Agriculture, forestry, fishery %: 2001 23.2; 2002 23.0; 2003 22.5; 2004 21.8; Est. 2005 20.7
  - Industry %: 2001 38.1; 2002 38.5; 2003 39.5; 2004 40.1; Est. 2005 40.8
  - Services %: 2001 38.6; 2002 38.5; 2003 38.0; 2004 38.1; Est. 2005 38.5
- Import - export:
  - Total export turnover US$ mil.: 2001 15,029; 2002 16,706; 2003 20,149; 2004 26,500; Est. 2005 31,800
  - Rate of increase of export %: 2001 3.8; 2002 11.2; 2003 20.6; 2004 31.5; Est. 2005 20
  - Total import turnover US$ mil.: 2001 16,218; 2002 19,745; 2003 25,227; 2004 32,000; Est. 2005 37,300
  - Rate of increase of import %: 2001 3.7; 2002 21.7; 2003 27.8; 2004 26.5; Est. 2005 16.7

### B. SOCIAL INDICATORS
- Average population Mil.: 2001 78.68; 2002 79.72; 2003 80.9; 2004 82.0; Est. 2005 83.2
- Decrease of birth rate ‰: 2001 0.46; 2002 0.42; 2003 0.4; 2004 0.37; Est. 2005 0.4
- Population growth rate %: 2001 1.35; 2002 1.32; 2003 1.47; 2004 1.44; Est. 2005 1.37
- Number of provinces achieving universal secondary education (Province): 2001 12; 2002 19; 2003 25; 2004 31
- Number of unemployed labourers finding jobs (converted) Mil. people: 2001 1.40; 2002 1.42; 2003 1.52; 2004 1.56; Est. 2005 1.6
- Proportion of poor households (old standards) %: 2001 17.5; 2002 14.5; 2003 11.0; 2004 8.3; Est. 2005 7.0
- Proportion of under-five malnourished children %: 2001 31.9; 2002 30.1; 2003 28.4; 2004 26.6; Est. 2005 25.0
- Proportion of rural residents without access to clean water supplies %: 2001 48; 2002 52; 2003 54; 2004 58; Est. 2005 62

### 2. Balance of gross domestic products, accumulation and consumption
- Sources total 1,000 bil. VND: 2001 755.1; 2002 867.7; 2003 1030.1; 2004 1250.9; Est. impl. 2005 1463.4
  - GDP at the current price " : 2001 481.3; 2002 535.8; 2003 613.4; 2004 715.3; Est. impl. 2005 838.5
  - Import " : 2001 273.8; 2002 332.0; 2003 416.7; 2004 535.6; Est. impl. 2005 624.9
- Uses (1,000 bil. VND):
  - Consumption: 2001 342.6; 2002 382.1; 2003 445.2; 2004 509.0; Est. impl. 2005 587.8
    - Of which: consumption by individuals " : 2001 312.1; 2002 348.8; 2003 406.5; 2004 464.7; Est. impl. 2005 534.3
  - Accumulation " : 2001 150.0; 2002 178.0; 2003 217.4; 2004 258.0; Est. impl. 2005 322.9
  - Export " : 2001 262.8; 2002 304.3; 2003 365.4; 2004 481.7; Est. impl. 2005 551.8
- Accumulation - consumption structure %:
  - Consumption %: 2001 69.5; 2002 68.2; 2003 67.2; 2004 66.4; Est. impl. 2005 64.5
  - Accumulation %: 2001 30.5; 2002 31.8; 2003 32.8; 2004 33.6; Est. impl. 2005 35.5
- In relations with GDP %:
  - Consumption %: 2001 71.2; 2002 71.3; 2003 72.6; 2004 71.2; Est. impl. 2005 70.1
  - Accumulation %: 2001 31.2; 2002 33.2; 2003 35.4; 2004 36.1; Est. impl. 2005 38.5
  - Savings %: 2001 28.8; 2002 28.7; 2003 27.4; 2004 28.8; Est. impl. 2005 29.9

### 3. State budget revenue - expenditure balance
- Total revenue to state budget Bil. VND: 2001 103,888; 2002 121,715; 2003 142,210; 2004 180,397; Est. 2005 210,400
  - Rate of increase of revenue %: 2001 14.48; 2002 17.16; 2003 16.84; 2004 26.85; Est. 2005 16.63
- Domestic revenue (excluding rude oil) Bil. VND: 52,626; 61,375; 74,333; 96,464; Est. 2005 115,000
  - % of total %: 2001 50.7; 2002 50.4; 2003 52.3; 2004 53.5; Est. 2005 54.7
- Revenue from rude oil Bil. VND: 26.281; 26.510; 32.077; 46.721; Est. 2005 55.500
  - % of total %: 2001 25,3; 2002 21,8; 2003 22,6; 2004 25,9; Est. 2005 26,4
- Other revenues Bil. VND: 24,981; 33,830; 35,800; 37,212; Est. 2005 39,900
  - % of total %: 2001 24.0; 2002 27.8; 2003 25.2; 2004 20.6; Est. 2005 19.0
- Total expenditure from state budget Bil. VND: 2001 129,773; 2002 148,208; 2003 176,322; 2004 209,024; Est. 2005 258,470
  - Rate of increase of expenditure %: 2001 16.41; 2002 14.21; 2003 18.97; 2004 18.55; Est. 2005 23.7
  - Expenditure for development investment Bil. VND: 40,236; 45,218; 51,003; 62,874; Est. 2005 74,000
    - % of total %: 2001 31.0; 2002 30.5; 2003 28.9; 2004 30.1; Est. 2005 28.6
  - Recurrent costs Bil. VND: 71,562; 78,039; 95,489; 116,346; Est. 2005 132,395
    - % of total %: 2001 55.1; 2002 52.7; 2003 54.2; 2004 55.7; Est. 2005 51.2
  - Expenditure for debt repayment, and aids Bil. VND: 14,943; 19,823; 24,760; 29,404; Est. 2005 34,775
    - % of total %: 2001 11.5; 2002 13.4; 2003 14.0; 2004 14.1; Est. 2005 13.5
- Overspending from state budget Bil. VND: 2001 23,553; 2002 25,598; 2003 29,670; 2004 34,750; Est. 2005 40,750
  - % GDP %: 2001 4.89; 2002 4.77; 2003 4.84; 2004 4.87; Est. 2005 4.86

### 4. Agriculture, forestry and fishery
- Rate of increase of production value %: 2001 4.7; 2002 6.5; 2003 5.5; 2004 5.8; Est. impl. 2005 5.2
  - Agriculture %: 2001 2.6; 2002 6.2; 2003 4.5; 2004 4.3; Est. impl. 2005 4.1
  - Forestry %: 2001 1.9; 2002 1.6; 2003 1.1; 2004 0.9; Est. impl. 2005 1.1
  - Fishery %: 2001 16.4; 2002 8.8; 2003 10.9; 2004 13.0; Est. impl. 2005 10.4
- Major products:
  - Grain food crops Million tons: 2001 34.3; 2002 37.0; 2003 37.7; 2004 39.5; Est. impl. 2005 40.0
    - paddy Million tons: 2001 32.1; 2002 34.4; 2003 34.6; 2004 35.7; Est. impl. 2005 36.3
    - maize Million tons: 2001 2.2; 2002 2.5; 2003 3.14; 2004 3.83; Est. impl. 2005 3.7
  - Coffee Thou. tons: 2001 840.6; 2002 700; 2003 794; 2004 836; Est. impl. 2005 860
  - Rubber Thou. tons: 2001 313; 2002 298; 2003 364; 2004 419; Est. impl. 2005 455
  - Live meat of various types Thou. tons: 2001 1.970; 2002 2.146; 2003 2.327; 2004 2.505; Est. impl. 2005 2.850
  - Concentrated afforestation Thousand ha: 2001 191; 2002 190; 2003 181; 2004 184; Est. impl. 2005 200
  - Forest cover %: 2001 34.1; 2002 35.2; 2003 36.1; 2004 37.0; Est. impl. 2005 37.8
  - Fishery and marine outputs Thou. tons: 2001 2435; 2002 2650; 2003 2860; 2004 3140; Est. impl. 2005 3300
  - Area of aquaculture Thousand ha: 2001 755; 2002 800; 2003 870; 2004 1050; Est. impl. 2005 1050
  - Irrigated area Million ha: 2001 7.4; 2002 8.0; 2003 8.2; 2004 8.3; Est. impl. 2005 8.4

### 5. Industry
- Rate of increase of production value %: 2001 14.6; 2002 14.8; 2003 16.8; 2004 16.0; Est. 2005 16.5
- Major products:
  - Generated electricity Bil. Kwh: 2001 30.6; 2002 35.8; 2003 40.8; 2004 46; Est. 2005 52.4
  - Commercial electricity Bil. Kwh: 2001 25.8; 2002 30.2; 2003 34.9; 2004 39.5; Est. 2005 45.8
  - Exploited rude oil (including gases) Mil. tons: 2001 18.6; 2002 18.9; 2003 20.6; 2004 26.3; Est. 2005 25.2
    - Of which: rude oil Mil tons: 2001 16.8; 2002 16.8; 2003 17.7; 2004 20.5; Est. 2005 18.5
  - Coal Mil. Tons: 2001 12.9; 2002 16.3; 2003 19.6; 2004 26.3; Est. 2005 30.5
  - Rolled steel Mil. Tons: 2001 1.9; 2002 2.4; 2003 2.8; 2004 2.9; Est. 2005 3.3
  - Chemical fertilizers (N, P, etc.) Thousand tons: 2001 1070; 2002 1162; 2003 1305; 2004 1754; Est. 2005 2250
  - Cement Mil. Tons: 2001 15.4; 2002 20.4; 2003 23.3; 2004 25.3; Est. 2005 29
  - Cloth Mil. Metres: 2001 402; 2002 455; 2003 476; 2004 518; Est. 2005 482
  - Paper Thousand tons: 2001 434; 2002 482; 2003 589; 2004 781; Est. 2005 850
  - Sugar Kg/person: 2001 13.6; 2002 13.8; 2003 16.6; 2004 17.0; Est. 2005 17.0
  - Beer Mil. Litres: 2001 817; 2002 899; 2003 1100; 2004 1160; Est. 2005 1250
  - Canned milk Litre/person: 2001 6.4; 2002 6.8; 2003 8.0; 2004 8.5; Est. 2005 9.0

### 6. Services
- Rate of increase of total goods retail and revenue from services %: 2001 11.3; 2002 14.5; 2003 10.5; 2004 18.2; Est. 2005 20.7
- Rate of increase of volume of transported goods %: 2001 8.4; 2002 7.9; 2003 8.4; 2004 9.0; Est. 2005 9.2
- Rate of increase of volume of circulated goods %: 2001 9.5; 2002 13.3; 2003 8.1; 2004 10.3; Est. 2005 10.6
- Rate of increase of number of transported passengers %: 2001 5.7; 2002 6.0; 2003 29.6; 2004 7.2; Est. 2005 7.8
- Rate of increase of number of circulated passengers %: 2001 10.2; 2002 8.3; 2003 11.2; 2004 11.1; Est. 2005 11.4
- Number of telephone set per 100 people Set: 2001 5.5; 2002 6.9; 2003 9.0; 2004 12.6; Est. 2005 17.1
- Proportion of communes having access to telephone service %: 2001 90.0; 2002 92.05; 2003 93.5; 2004 98.0; Est. 2005 100.0
- Number of visits by foreign tourists Thousand: 2001 2,330; 2002 2,628; 2003 2,429; 2004 2,928; Est. 2005 3,200
- Number of visits by domestic tourists Thousand: 2001 11,700; 2002 12,500; 2003 13,000; 2004 13,600; Est. 2005 15,000

### 7. Import - export (detailed)
- A. Export of goods
  - Total export turnover Bil. USD: 2001 15.0; 2002 16.7; 2003 20.15; 2004 26.5; Est. 2005 31.8
  - Rate of increase %: 2001 3.8; 2002 11.2; 2003 20.6; 2004 31.5; Est. 2005 20.0
  - Foreign invested enterprises (excluding rude oil) Bil. USD: 2001 3.7; 2002 4.6; 2003 6.3; 2004 8.8; Est. 2005 10.7
  - Foreign invested enterprises (including rude oil) Bil. USD: 2001 6.8; 2002 7.9; 2003 10.2; 2004 14.5; Est. 2005 18.5
  - Products of heavy industries and minerals Bil. USD: 2001 5.2; 2002 5.3; 2003 6.5; 2004 9.0; Est. 2005 11.7
    - % of total export %: 2001 34.9; 2002 31.7; 2003 32.2; 2004 34.0; Est. 2005 36.8
  - Products of light, small and handicraft industries Bil. USD: 2001 5.4; 2002 6.8; 2003 8.6; 2004 11.3; Est. 2005 12.8
    - % of total export %: 2001 35.7; 2002 40.6; 2003 42.7; 2004 42.6; Est. 2005 40.3
  - Agro-forestry and fishery products Bil. USD: 2001 4.4; 2002 4.6; 2003 5.1; 2004 6.2; Est. 2005 7.3
    - % of total export %: 2001 29.4; 2002 27.6; 2003 25.1; 2004 23.4; Est. 2005 23.0
  - Major lines of goods (selected):
    - Rice Mil. Tons: 2001 3.7; 2002 3.2; 2003 3.8; 2004 4.1; Est. 2005 4.5
    - Coffee Thou. tons: 2001 931; 2002 722; 2003 749; 2004 975; Est. 2005 850
    - Rubber Thou. tons: 2001 308; 2002 455; 2003 432; 2004 513; Est. 2005 520
    - Power lines and cables Mil. USD: 2001 181; 2002 188; 2003 292; 2004 389; Est. 2005 500
    - Vegetable and fruits Mil. USD: 2001 344; 2002 221; 2003 151; 2004 179; Est. 2005 230
    - Cashew nut Mil. USD: 2001 152; 2002 210; 2003 277; 2004 436; Est. 2005 534
    - Fishery products Mil. USD: 2001 1816; 2002 2036; 2003 2200; 2004 2401; Est. 2005 2650
    - Textile products Mil. USD: 2001 1975; 2002 2732; 2003 3609; 2004 4386; Est. 2005 4800
    - Footwear Mil. USD: 2001 1587; 2002 1875; 2003 2261; 2004 2692; Est. 2005 3000
    - Electronic goods spare parts Mil. USD: 2001 709; 2002 605; 2003 855; 2004 1075; Est. 2005 1400
    - Rude oil Mil. tons: 2001 16.7; 2002 16.9; 2003 17.1; 2004 19.5; Est. 2005 18.8
    - Fossil coal Mil. tons: 2001 4.3; 2002 6.0; 2003 7.3; 2004 11.6; Est. 2005 14.0
    - Wood products Mil. USD: 2001 324.0; 2002 431.0; 2003 567.0; 2004 956.0; Est. 2005 1.450
- B. Import of goods
  - Total import turnover Bil. USD: 2001 16.2; 2002 19.7; 2003 25.2; 2004 32.0; Est. 2005 37.3
  - Rate of increase %: 2001 3.7; 2002 21.7; 2003 27.8; 2004 26.5; Est. 2005 16.7
  - Foreign invested enterprises Bil. USD: 2001 5.0; 2002 6.6; 2003 8.8; 2004 11.1; Est. 2005 13.4
  - Machinery, equipment and spare parts Bil. USD: 2001 4.9; 2002 5.9; 2003 8.2; 2004 10.3; Est. 2005 11.9
    - % of total %: 2001 30,5; 2002 29,8; 2003 32,4; 2004 32,2; Est. 2005 31,9
  - Raw materials and fuels Bil. USD: 2001 10,0; 2002 12,3; 2003 15,4; 2004 19,7; Est. 2005 23,0
    - % of total %: 2001 61,5; 2002 62,4; 2003 61,2; 2004 61,5; Est. 2005 61,7
  - Consumer goods Bil. USD: 2001 1.3; 2002 1.6; 2003 1.6; 2004 2.0; Est. 2005 2.4
    - % of total %: 2001 7.9; 2002 7.9; 2003 6.4; 2004 6.3; Est. 2005 6.4
  - Major lines of goods (selected):
    - Petroleum Mil. tons: 2001 9.1; 2002 10.0; 2003 10.0; 2004 11.1; Est. 2005 12.3
    - Finished steel products Mil. tons: 2001 2.1; 2002 2.7; 2003 2.7; 2004 2.9; Est. 2005 3.4
    - Electronic and computer spare parts Mil. USD: 2001 710; 2002 701; 2003 975; 2004 1.342; Est. 2005 1.700
    - Medicine Mil. USD: 2001 329; 2002 350; 2003 374; 2004 410; Est. 2005 500

### 8. Education and training
- Number of kindergarteners Thou. children: 2001 2,120; 2002 2,144; 2003 2,175; 2004 2,500; Est. 2005 2,600
- Number of primary school pupils Thou. pupils: 2001 9,311; 2002 8,841; 2003 8,350; 2004 7,800; Est. 2005 7,500
- Number of secondary school students Thou. students: 2001 6,253; 2002 6,498; 2003 6,538; 2004 6,700; Est. 2005 6,600
- Number of tertiary school students Thou. students: 2001 2,333; 2002 2,459; 2003 2,616; 2004 2,750; Est. 2005 3,000
- New students in universities and colleges Thou. students: 2001 250; 2002 282; 2003 300; 2004 320; Est. 2005 346
- New students in professional high schools Thou. students: 2001 148; 2002 166; 2003 194; 2004 250; Est. 2005 267
- New students for vocational schools Thou. students: 2001 887.3; 2002 1,005; 2003 1,074; 2004 1,153; Est. 2005 1,181
- New post-graduate trainees Thou. students: 2001 5.9; 2002 8.8; 2003 11.5; 2004 14.5; Est. 2005 15.6
- Retrained staff Thou. people: 2001 30; 2002 30; 2003 36; 2004 44; Est. 2005 54
- Number of provinces achieving universal secondary education Province: 2002 19; 2003 25; 2004 31

### 9. Labour, culture, health care and social activities
- Population (Average population Mil. people): 2001 78.68; 2002 79.72; 2003 80.90; 2004 82.03; Est. 2005 83.16
  - Rural population Mil. people: 2001 59; 2002 59.7; 2003 60.3; 2004 60.6; Est. 2005 60.9
  - Ratio: rural population / total population %: 2001 75; 2002 74.3; 2003 74.7; 2004 73.9; Est. 2005 73.2
- Labour:
  - Number of working labourers in the economy Mil. people: 2001 37.6; 2002 38.7; 2003 41.1; 2004 42.4; Est. 2005 43.7
  - Labour structure %:
    - Agriculture, forestry and fishery %: 2001 67.2; 2002 66.1; 2003 61.3; 2004 58.6; Est. 2005 57.1
    - Industry and construction %: 2001 12.6; 2002 12.9; 2003 15.7; 2004 17.4; Est. 2005 17.9
    - Services %: 2001 20.2; 2002 21; 2003 23; 2004 24; Est. 2005 25
  - Proportion of trained labourers %: 2001 16.8; 2002 18.7; 2003 21.2; 2004 22.5; Est. 2005 25
  - Urban unemployment rate %: 2001 6.3; 2002 6.0; 2003 5.8; 2004 5.6; Est. 2005 5.5
  - Rate of using working time in rural areas %: 2001 74.3; 2002 75.4; 2003 76.5; 2004 78.3; Est. 2005 80
  - Proportion of poor households %: 2001 17.5; 2002 14.5; 2003 11.0; 2004 8.3; Est. 2005 7
- Culture (selected):
  - Total number of published books Mil. copies: 2001 270; 2002 280; 2003 290; 2004 332; Est. 2005 350
  - Total published newspapers and magazines Mil. copies: 2001 650; 2002 650; 2003 655; 2004 680; Est. 2005 700
  - Number of programming hours by Radio Voice of Vietnam Thou. hrs: 2001 46; 2002 47; 2003 49; 2004 49; Est. 2005 49
  - Number of broadcasting hours by Radio Voice of Vietnam Thou. hrs: 2001 258; 2002 323; 2003 325; 2004 326; Est. 2005 332
  - Proportion of households having access to services of the Radio Voice of Vietnam %: 2001 92; 2002 93; 2003 93; 2004 94; Est. 2005 95
  - Number of programming hours by Television of Vietnam Thou. hrs: 2001 24.3; 2002 25.2; 2003 37.1; 2004 48.5; Est. 2005 91.5
  - Number of broadcasting hours by Television of Vietnam Thou. hrs: 2001 271.1; 2002 310; 2003 368; 2004 390; Est. 2005 540
  - Proportion of households having access to Television of Vietnam %: 2001 82; 2002 84; 2003 86; 2004 88; Est. 2005 90
  - Number of feature films produced on orders Film: 2001 11; 2002 12; 2003 13; 2004 14; Est. 2005 15
- Social and health care:
  - Under-one mortality rate %o: 2001 35; 2002 26; 2003 21; 2004 18; Est. 2005 18
  - Under-five mortality rate %o: 2001 42; 2002 35; 2003 33; 2004 32.8; Est. 2005 30
  - Under-five malnutrition rate %: 2001 32; 2002 30.1; 2003 28.4; 2004 26.6; Est. 2005 25
  - Proportion of communes having health care stations %: 2001 97.0; 2002 97.3; 2003 99; 2004 99; Est. 2005 100
  - Proportion of communal health care stations having medical doctors %: 2001 56.1; 2002 >60; 2003 61; 2004 65.4; Est. 2005 65.4
  - Total number of patient beds Thou. beds: 2001 185.8; 2002 190; 2003 195; 2004 200; Est. 2005 205
  - Number of patient beds per 10,000 thousand people Patient bed: 2001 23.7; 2002 23.9; 2003 24.1; 2004 23.0; Est. 2005 24.7

### 10. Total social development investment capital, by sources (Current price)
- Total Thou. bil. VND: 2001 170.5; 2002 199.1; 2003 231.6; 2004 275; Est. 2005 320
  - % GDP %: 2001 35.4; 2002 37.2; 2003 37.8; 2004 38.4; Est. 2005 38.2
- Investment capital from state budget Thou. Bil. VND: 2001 45.6; 2002 49.6; 2003 55.5; 2004 69.1; Est. 2005 74.0
  - % of total %: 2001 26.7; 2002 24.9; 2003 24.0; 2004 25.1; Est. 2005 23.1
- Investment credit Thou. Bil. VND: 2001 28.7; 2002 31.9; 2003 29; 2004 30.0; Est. 2005 30.0
  - % of total %: 2001 16.8; 2002 16.0; 2003 12.5; 2004 10.9; Est. 2005 9.4
- Investment by state owned enterprises Thou. Bil. VND: 2001 27.7; 2002 31; 2003 31.6; 2004 39.7; Est. 2005 50.0
  - % of total %: 2001 16.2; 2002 15.6; 2003 13.6; 2004 14.4; Est. 2005 15.6
- Investment by private sector and the public Thou. Bil. VND: 2001 38.5; 2002 52.1; 2003 68.7; 2004 82.0; Est. 2005 105.0
  - % of total %: 2001 22.6; 2002 26.2; 2003 29.7; 2004 29.8; Est. 2005 32.8
- FDI Thou. Bil. VND: 2001 30; 2002 34.5; 2003 37.8; 2004 44.2; Est. 2005 47.0
  - % of total %: 2001 17.6; 2002 17.3; 2003 16.3; 2004 16.1; Est. 2005 14.7
- Other sources Thou. Bil. VND: 2003 9; 2004 10.0; Est. 2005 14.0
  - % of total %: 2003 3.9; 2004 3.6; Est. 2005 4.4

### 11. Total social development investment capital for period 2001-2005, by economic sectors (Current price)
- Total Thou. bil. VND: 2001 170.5; 2002 199.1; 2003 231.6; 2004 275.0; Est. 2005 320.0
- I Economic sectors Thou. bil. VND: 2001 119.5; 2002 139.4; 2003 161.9; 2004 192.2; Est. 2005 224.0
  - % of total %: 2001 70.1; 2002 70.0; 2003 69.9; 2004 69.9; Est. 2005 70.0
  - Agriculture, forestry and fishery Thou. bil. VND: 2001 23.2; 2002 27.1; 2003 31.3; 2004 36.6; Est. 2005 44.2
    - % of total %: 2001 13.6; 2002 13.6; 2003 13.5; 2004 13.3; Est. 2005 13.6
  - Industry and construction Thou. bil. VND: 2001 75.4; 2002 88.2; 2003 102.8; 2004 122.7; Est. 2005 140.0
    - % of total %: 2001 44.2; 2002 44.3; 2003 44.4; 2004 44.6; Est. 2005 44.2
  - Transport, transportation, post services Thou. bil. VND: 2001 21.0; 2002 24.1; 2003 27.8; 2004 33.0; Est. 2005 39.8
    - % of total %: 2001 12.3; 2002 12.1; 2003 12.0; 2004 12.0; Est. 2005 12.2
- II Social areas Thou. bil. VND: 2001 45.0; 2002 53.0; 2003 62.3; 2004 74.5; Est. 2005 87.7
  - % of total %: 2001 26.4; 2002 26.6; 2003 26.9; 2004 27.1; Est. 2005 27.4
  - Housing, public utilities, water supply, services Thou. bil. VND: 2001 22.5; 2002 26.1; 2003 30.6; 2004 36.3; Est. 2005 42.1
    - % of total %: 2001 13.2; 2002 13.1; 2003 13.2; 2004 13.2; Est. 2005 13.2
  - Science, technology, basic/environmental investigations and surveys Thou. bil. VND: 2001 2.2; 2002 2.6; 2003 3.2; 2004 3.9; Est. 2005 4.2
    - % of total %: 2001 1.3; 2002 1.3; 2003 1.4; 2004 1.4; Est. 2005 1.3
  - Education and training Thou. bil. VND: 2001 6.6; 2002 8.0; 2003 9.5; 2004 11.6; Est. 2005 13.8
    - % of total %: 2001 3.9; 2002 4.0; 2003 4.1; 2004 4.2; Est. 2005 4.3
  - Social and health care Thou. bil. VND: 2001 3.6; 2002 4.4; 2003 5.3; 2004 6.6; Est. 2005 8.0
    - % of total %: 2001 2.1; 2002 2.2; 2003 2.3; 2004 2.4; Est. 2005 2.5
  - Culture, information and sports Thou. bil. VND: 2001 3.9; 2002 4.6; 2003 5.1; 2004 6.1; Est. 2005 7.4
    - % of total %: 2001 2.3; 2002 2.3; 2003 2.2; 2004 2.2; Est. 2005 2.3
  - State governance, national defence and security Thou. bil. VND: 2001 6.1; 2002 7.4; 2003 8.6; 2004 10.2; Est. 2005 12.2
    - % of total %: 2001 3.6; 2002 3.7; 2003 3.7; 2004 3.7; Est. 2005 3.8
- III Other sectors Thou. bil. VND: 2001 6.0; 2002 6.8; 2003 7.4; 2004 8.2; Est. 2005 8.3
  - % of total %: 2001 3.5; 2002 3.4; 2003 3.2; 2004 3.0; Est. 2005 2.6

*Viet Nam Growth and poverty reduction annual report 2004 - 2005 (tables and indicators as presented in the source).*

### 12. Added capacities in economic sectors, period 2001-2005

### 12. Added capacities in economic sectors, period 2001-2005

### A Economic sectors — Agriculture
- Irrigation and bulk water supply: Thousand ha 300
- Drainage: Thousand ha 146
- Salinity intrusion prevention: Thousand ha 226
- New plantations (Forestry): Thousand ha 949

### A Economic sectors — Industry
- Electric sector (installed capacity): MW 4863
  - Hydropower: MW 720
  - Thermo power (coal): MW 800
  - Thermo power (gases): MW 3343
  - Diesel: MW
- Exploited clean coal (Coal sector): Mil. tons 15.4
- Chemical fertilizers:
  - Urea: Mil. tons 760
  - NPK: Mil. tons 1300
- Rude oil: Mil. tons 2.2
- Gases: Bil. m3 5.1
- (Rolled) steel: Thousand tons 2390
- Cement: Mil. tons 10.1

### A Economic sectors — Transport and transportation
- National roads: Km 4575
- Local roads (new construction, rehabilitation): Km 65,004
- Road bridge: M
- Length of upgraded railroads: Km 380
- Clearance capacity of ports (Navigation): Thousand tons 17,200
- Clearance capacity of sea ports (Sea transport): Thousand tons 23,400
- Airways — Clearance capacity: Mil. passengers / year 8

### A Economic sectors — Trade and tourism
- Number of hotel rooms: Room 26,488

### B Social areas
- Tap water capacity per 24 hours: Mil. m3 1.8
- Volume of treated waste water: Thousand m3
- Number of research staff: Thousand people
- Number of medical doctors: Thousand people 10
- Export of computer software: Mil. USD 200
- Number of vocational schools: School 94

### 13. Implementation status of state-owned enterprises (soes) re-organization (2001–Est. 2005)
- Enterprises privatized: 2001 205; 2002 164; 2003 532; 2004 753; Est. 2005 600
- Enterprises handed-over: 2001 18; 2002 34; 2003 51; 2004 24; Est. 2005 12
- Enterprises sold: 2001 16; 2002 17; 2003 24; 2004 19; Est. 2005 18
- Enterprises merged: 2001 85; 2002 83; 2003 154; 2004 68; Est. 2005 30
- Enterprises amalgamated: 2001 34; 2002 44; 2003 48; 2004 7; Est. 2005 10
- Enterprises dissolved: 2001 22; 2002 27; 2003 50; 2004 35; Est. 2005 25
- Enterprises going bankrupt: 2001 2; 2002 4; 2003 12; 2004 12
- Enterprises transformed to 1-member limited companies: 14; 41; 55
- New establishments: 2002 37; 2003 18; 2004 12; Est. 2005 12

### 14. Summary of business registration status in non-state owned enterprises (2001–Est. 2005)
- Total number of newly registered enterprises:
  - 2001 Enterprise 19,773
  - 2002 Enterprise 21,523
  - 2003 Enterprise 27,751
  - 2004 Enterprise 36,795
  - Est. 2005 Enterprise 38,144
- Total registered capital: Bil. VND 2001 25,610; 2002 38,422; 2003 57,965; 2004 75,125; Est. 2005 96,756

- Private enterprises:
  - Number (Enterprise): 2001 7,100; 2002 6,532; 2003 7,813; 2004 10,283; Est. 2005 8,443
  - % of total: 2001 35.9; 2002 30.3; 2003 28.2; 2004 27.9; Est. 2005 22.1

- Limited companies:
  - Number (Company): 2001 11,121; 2002 12,627; 2003 15,781; 2004 19,943; Est. 2005 21,622
  - % of total: 2001 56.2; 2002 58.7; 2003 56.9; 2004 54.2; Est. 2005 56.7

- Shareholding companies:
  - Number (Company): 2001 1550; 2002 2305; 2003 4058; 2004 6438; Est. 2005 7840
  - % of total: 2001 7.8; 2002 10.7; 2003 14.6; 2004 17.5; Est. 2005 20.6

- Partnership:
  - Number (Company): 2001 2; 2002 0; 2003 1; 2004 7; Est. 2005 9
  - % of total: 2001 0.01; 2002 ; 2003 0.004; 2004 0.02; Est. 2005 0.02

- 1-member limited companies:
  - Number (Company): 2001 0; 2002 59; 2003 98; 2004 124; Est. 2005 230
  - % of total: 2002 0.27; 2003 0.35; 2004 0.34; Est. 2005 0.60

### 15. Major indicators of foreign invested enterprises, period 2001 - 2005
1. Implemented investment capital
- Value: Mil. USD 2001 2,460; 2002 2,591; 2003 2,651; 2004 2,851; Est. 2005 3,100
- Rate of increase: % 2001 1.0; 2002 5.3; 2003 2.3; 2004 7.5; Est. 2005 8.7

2. Revenue
- Value: Mil. USD 2001 10,05; 2002 12,527; 2003 16,000; 2004 18,000; Est. 2005 20,000
- Rate of increase: % 2001 4.0; 2002 20.4; 2003 27.7; 2004 12.5; Est. 2005 11.1

3. Export (excluding rude oil)
- Value: Mil. USD 2001 3,673; 2002 4,602; 2003 6,340; 2004 8,816; Est. 2005 10,800
- Rate of increase: % 2001 11.0; 2002 25.3; 2003 37.8; 2004 39.1; Est. 2005 22.5

4. Import
- Value: Mil. USD 2001 4,984; 2002 6,619; 2003 8,815; 2004 11,085; Est. 2005 13,700
- Rate of increase: % 2001 15.0; 2002 32.8; 2003 33.2; 2004 25.8; Est. 2005 23.6

5. Contributions to state budget
- Value: Mil. USD 2001 373; 2002 459; 2003 628; 2004 800; Est. 2005 1130
- Rate of increase: % 2001 15.0; 2002 23.1; 2003 36.8; 2004 27.4; Est. 2005 41.3

6. Use of labour (at the end of reporting term)
- Number of labourer: Thou. people 2001 450; 2002 590; 2003 686; 2004 759; Est. 2005 860
- Rate of increase: % 2001 19.0; 2002 31.1; 2003 16.3; 2004 10.6; Est. 2005 13.3

7. Registered capital
- Value: Mil. USD 2001 3,258; 2002 2,805; 2003 3,128; 2004 4,222; Est. 2005 4,700
- Rate of increase: % 2001 23.0; 2002 -13.90; 2003 11.5; 2004 35.0; Est. 2005 11.3

*Viet Nam Growth and poverty reduction annual report 2004 - 2005*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2006/_cr06340.pdf_