Vietnam: $1 billion to encourage investment and consumption

The monthly cabinet meeting on December 1-2 concentrated on ways to prevent economic recession in the face of the global financial crisis and economic slowdown.

Chairman of the Government Office Nguyen Xuan Phuc said at a press conference after the cabinet meeting that the government had set forth five groups of measures to realise three missions: prevent economic recession, maintain growth and ensure social security.

First of all, to promote production and business, the government will support industries that yield high export revenue and have high growth potentials like the processing industry, textiles and garments, footwear. At the same time it will reduce taxes for and extend debts of businesses facing difficulties, particularly small- and medium-sized enterprises.

Secondly, the government will more strongly encourage investment and consumption. State budget money allocated for capital construction, government bonds and ODA capital will be disbursed early.

Regarding investment, the government encourages the participation of all economic sectors and will create favourable conditions for non-state enterprises to invest in building infrastructure.

The government will issue more government bonds, encourage enterprises to build housing for the poor and workers to consume the excess of inventory goods and construction materials.

As for financial and monetary issues, Phuc said the government has assigned the Vietnam Development Bank to grant credit guarantees to small- and medium-sized enterprises and reserve more food in the event of natural disasters.

The government will keep interest rates and tax rates at appropriate levels and continue exempting and reducing taxes to help businesses expand.

Phuc also said that the government would assist 61 poor districts and implement unemployment insurance. The Prime Minister has asked related bodies to provide enough food for people and told the Finance Ministry to buy more than 150,000 tonnes of rice and necessities for reserve.

He emphasised the responsibility of state-owned groups and corporations in ensuring the achievement of the above targets.

“The government will protect enterprises and farmers at the permitted level. However, protection doesn’t mean subsidies. On one hand, the government will speed up measures to encourage investment, consumption, social security, and on the other hand, it will still implement plans to increase salaries, power and coal prices under the market mechanism,” Phuc said.

The government plans to spend $1 billion to encourage investment and consumption.

Source: VNN