On October 25, 2004, the sixth session of the 11th National Assembly commenced. At this session, the National Assembly focused on the review of socio-economic issues and state budget, law building and other important issues.

I. The socio-economic situation in 2004

Based on the socio-economic situation in the first 9 months of 2004, the forecast for the implementation of major goals of the 2004 socio-economic plan is as follows:

GDP growth rate is about 7.6 %, compared to 2003, in which agriculture, forestry and fisheries increase by 3.3%, industrial and construction sectors increase by 10.2%, service sector increases by 7.3%. Agriculture, forestry and fisheries production outputs increase by 4.9% compared to 2003, industrial production by 15.6% and service by around 8%. The export turnover reaches USD 25 billion, increasing nearly 24%. Total state budget revenue registered at VND 166.9 trillion, exceeding 11.8% of the year’s budget plan, equal to 23.5% GDP and increased by 17.4% compared to the year 2003; total state budget expenditure in 2004 is around VND 206.05 trillion, exceeding 9.8% against the plan; the state budget deficit makes up 5% GDP as planned. The overall social investment reaches 35.4% GDP. The Consumer Price Index increases about 9.5%. Jobs created and supplemented are 1.55 million. The number of new recruitment increases by 7%. The poor household rate stays only at 8.3%. The birth rate reduces by 0.037%. The child malnutrition rate goes down to 26%.

There also emerge many difficulties and challenges in the socio-economic situation including:

The actual GDP growth rate is lower than planned, the quality and efficiency of growth see no remarkable improvement and the economic structure has not significantly shifted towards modernization.

The realization of development investment capital is still slow and the disbursement rate is low.

The Consumer Price Index, much higher than those of the previous years, is affecting many production sectors and people’s life.

The socialization of addressing social issues remainss slow and confusing without any concrete action plans. Many imperative social problems, especially drug addicts, gambling, prostitution have not yet been addressed.

The administrative reform result has not been as expected, failing to meet the needs of the renovation process.

Besides, the widely spreading bird flu and rocketing price of some items have exerted negative impacts on production and business activities and the realization of the set goals, slowing down the economic growth.

II. The results of 4 year implementation of socio-economic development plan 2001 – 2005

The economy sustains a fairly high and stable growth rate, the average annual GDP growth rate of 4 years from 2001-2004 is around 7.2% (6.9% in 2001, 7.1% in 2002, 7.3% in 2003 and 7.6% in 2004).

The agriculture, forestry and fisheries value in the 4 years increases 5.2% on average. (4.8% in the plan). However, the added value (GDP in agriculture) is estimated at 3.4%, lower than the set goal of 4%.

The industrial production value in 4 years (2001-2004) in the 5-year plan increases 15.3% on average (13.1% in the plan). However, because of much input cost, the added value is only 10% on average, lower than the set goal of 10.4%.

The service sector value in the 4 years increases around 7.2%, lower than the set goal of 7.5%. The added value reaches 6.6% against the planned of 6.8%. In the 4 years, the total export turnover registered at USD 77 billion, export rate in 4 years increases around 14.6% on average (4.1% in 2001, 11.2% in 2002, 20.8% in 2003 and 24% in 2004) (The target for the 5 year plan is USD 104-110 billion with an increase from 14-16%). The export turnover per capita of 2004 reaches over USD 305.

The estimated total investment in the economy during 4 years of 2001-2004 (based on the price index of 2000) is around VND 731,000 billion, registering at 88% of the 5 year plan, of which the capital from state budget makes up 21.9%, from state credits investment 14.7%, from state owned enterprises 17.7%, from individuals and community 25.7% and from Foreign Direct Investment 17.3%. In 4 years of 2001-2004, ODA is committed at USD 10.5 billion and its disbursement is around USD 6.2 billion.

The annual consumer price index in the 4 years increases around 4.5% on average (the planned is lower than 5%)

Job created in the 4 years is 5.9 million (the target of the 5-year plan is 7.5 million) and the poor household proportion by 2004 reduces to 8.3% (the plan is 10%).

The malnutrious children under 5 years old by the end of 2004 is 26% (the plan is 22-25%).

Rural areas getting access to clean water by the end of 2004 is 58% (the plan is 62%).

Although the 4 year growth rate is fairly high, considering our economic scale, such growth rate is still too low to bridge the gap between us and other regional countries. This requires stronger efforts and greater leaps in the years to come, particularly in 2005, in order to achieve rapid, stable and efficient economic development.

III. Orientations of socio-economic development in 2005

2005 is the final year for the implementation of the ninth Communist Party National Congress’ resolutions and Resolution No.55/2001/QH10 of the National Assembly on the 2005 socio-economic development plan. This year plays a decisive role in the accomplishment of the goals set in the 5 year plan and should focus on the following 5 target groups:

- Achieve rapid, stable and efficient economic development. Mobilize to the maximum all resources and use them effectively for national development. Produce considerable changes in quality, efficiency and competitiveness of products and the economy. Speed up economic structure shift and reduce production cost for the enhancement of growth quality.

- Continue fulfilling effectively all commitments and implementing roadmaps for international economic integration. Undertake strong measures to boost export and make the most of the domestic market.

- Carry out further reforms in the direction of promoting socialization and raising quality in the fields of education, training, healthcare and culture. Intensify scientific and technological research activities, develop human resources and enhance their quality. Better carry out the policy of eradicating hunger, reducing poverty and improving people’s living standards, especially in remote and ethnic minority areas.

- Continue renovating the organization of state agencies and enhancing theirt effectiveness and efficiency. Intensify reforms in economic regime and public administration. Step up the fight against corruption and wastefulness, encourage democracy at grass-root level and promote dialogues between local authorities and community, between enterprises and state agencies.

- Concentrate on improving business and production environment, accelerating the rearrangement and equitization of SOEs. Operate the financial and real estate markets aimed at generating a force for strong economic development.

The implementation of those 5 goals should go hand in hand with the maintenance of political stability and ensurance of national defense and security of the border areas and islands in the Eastern Sea.

The economic targets:

GDP increases 8 – 8.5% compared to 2004.

The added value (GDP) of agriculture, forestry and fisheries increases 3.4% - 3.8% (the production value increases 15.5% - 16%).

The added value in service sector increases 7.7% - 8.2%.

The export turnover increases 14 – 16%.

The overall social development investment is VND 295 – 300 trillion, increasing by 17.5% - 19.5% as compared to 2004, equivalent to 36.5% of GDP.

The total state budget revenue is VND 179.7 trillion, increasing by 7.7%; the total state budget expenditure is VND 226.45 trillion, increasing by 9.9% as compared to in 2004; the state budget overexpenditure is around 5% of GDP.

The consumer price index increases lower than economic growth (around 7%).

Social Targets:

Education universalization of secondary schools is implemented with junior school recruitment ratio of 80%.

New university and college enrollment increases by 8%; secondary vocational school enrollment increases 15% and vocational training enrollment increases by 12%.

The average birth rate is reduced by 0.04% and the population is 83.2 million, increasing by 1.42%.

1.6 million jobs are generated, in which labor export is 70 thousand people. Urban unemployment rate is reduced to 5.5%.

The number of households getting access to Radio the Voice of Vietnam is 95% and to Vietnam Television is 90%.

Poor household are reduced to below 7%.

The malnutrition rate in the under 5-year old children is reduced to 24%.

Clean water is provided to 62% of the rural population.

In order to achieve the goal of 7.5% GDP growth for 5 years of 2001-2005, in 2005 the economic growth rate must be 8.8%, in which agriculture, forestry and fisheries increase by 4.2%, industrial and construction sector by 11.5% and service sector by 8.5%.

Directions for development sectors

- Develop agriculture and rural economy through building concentrated commodity production zones, carrying out specialized and intensive cultivation areas with high productivity and quality, and applying scientific and technical advances and new technologies.

- Develop industry with focus on products that are highly marketable and competitive in order to meet domestic consumption needs, increase export turnover and reduce irrational production cost.

- Develop services with focus on those with high potentials and competitiveness like tourism, aviation, sea cargo, finance and banking. Improve service quality.

- Boost export and accelerate regional and international economic integration process through the following activities: maintaining high growth rate, increasing to the maximum the turnover of major export items, such as fisheries, textile, footwares, crude oil and wooden products; developing new items of high competitiveness and other products with high productivity and increasing market share such as processed products and ship-building industry; gearing up exportation of products of high-tech content; continuing to perfect export and import management mechanism, making it stable and consistent with the process of regional and international economic integration; and stepping up trade promotion with focus on the expansion of traditional, potential and new markets.

- Develop education and training scale in accordance with socio-economic development conditions, consolidate the results of illiteracy eradication and promote universalization of education at elementary level, especially within the right schooling age.

- Science and technology: Assist renovation and enhancement of technology level of manufacturing and service sectors with a view to increasing labor productivity, production and business efficiency and the competitiveness of the economy. Intensify activities in consultancy and scientific and technology service in intellectual property. Step up high-tech application and development. Reorganize scientific and technology research institutions so as to gradually shift to operations under enterprise mechanism.

- Natural resources, environment and sustainable development: Continue topographical work for urban planning; ensure all necessary conditions for Vietnam-China border demarcation and marker planting as planned.

- Job generation, hunger eradication and poverty reduction: Encourage various economic sectors to invest in the development of labor-intensive trades, create jobs for farmers who lost land because of urbanization and construction of industrial zones and EPZs.

- Information and culture, radio and television, physical training and sports: Strengthen state management in culture, information and press activities.

- People’s healthcare: Complete the master plan for the development of caretaking, protection and improvement of people’s health. By the end of 2005, 30% of communes will have met the national standards on communal clinic. Ensure over 40% of drug demand be provided to healthcare by domestic manufacturing.

- Population, family, child and social security: Combine the population work and family planning with child care and education and a movement for building families of well-being, happiness, equality and civilization.

- Stabilizing and improving living standards of ethnic minorirty people: Continue implementing the socio-economic development program for especially difficult communes (Program 135). Ensure sound implementation of land policy for the Khmer community and other ethnic minority people in the Central Highlands.

- Anti - social evil campaign: Strive for synchronized coordination among competent authorities in the action plan of fighting drugs and prostitution. Intensify activities in building healthy, strong and social-evil-free communes and districts and combine it to the campaign "all people unite to build up a cultured life in residence areas".

- National defense, security, social security and order: Intensify the surveillance of border, both on land and at sea; specify socio-economic development plan in areas of economic – defense significance and focal areas, thereby contributing to the strengthening of national defense; promoting the work of resettlement for economic development in remote areas.