Socioeconomic targets for 2017 assigned to 5 ministries

The Ministry of Planning and Investment is in charge of accelerating GDP growth to 6.7 per cent, ensuring the CPI is at 4 per cent, and working for the Incremental Capital-Output Ratio (ICOR) to be 31.5 per cent of GDP.

The Ministry of Industry and Trade is responsible for ensuring growth in export turnover of 6 to 7 per cent, with the budget deficit to be some 3.5 per cent of the GDP. GDP per unit of energy use in 2017 is to be 1.5 per cent lower than in 2016.

In order to reduce the GDP per unit of energy use, the Nordic Chamber of Commerce, in its Made in Vietnam Energy Plan (MVEP) report, suggested that the greater use of direct power purchase agreements (DPPA) between power producers and large power consumers should be allowed.

The report also recommends a Power Price Roadmap using Market Based Pricing to 2020 and vision to 2025, including definitions of variable pricing between the three main tariff groups: residential, commercial and industrial.

The Vietnamese Government should work with the private sector to develop off-shore gas reserves and infrastructure and encourage additional exploration to bring greater gas supplies on line as soon as possible and reduce the need for imported coal, the report said.

The Ministry of Health, meanwhile, has been set a target of 25.5 hospital beds per 10,000 people, with health insurance coverage among the population to be 82.2 per cent.

In order to boost health insurance coverage, EuroCham has suggested quick access to innovative pharmaceuticals for Vietnamese patients, with the effective elimination of local clinical trial requirements for drugs, biologics, and vaccines approved by stringent international authorities and the further optimization of the drug registration process being key to improving patient access.

EuroCham emphasized that ensuring a holistic approach to government procurement, building on doctors’ choice of high quality medicines, and optimizing the reimbursement system will be crucial in meeting the demands of a modern and innovative universal healthcare system.

A regulatory change is also required to increase health insurance coverage. According to the laws on social insurance, from 2016 the base to calculate compulsory insurance contributions (social insurance / health insurance / unemployment insurance) will include actual salaries and fixed or regular allowances.

This change is causing increasing financial difficulties for enterprises during the economic downturn. EuroCham therefore recommended that the government consider postponing the application of the requirement until 2020.

The Ministry of Labor, Invalids and Social Affairs (MoLISA) has been tasked with reducing the poverty rate (under a multi-dimensional approach) by 1 to 1.5 per cent, with unemployment in urban areas to be below 4 per cent and the ratio of the workforce with training to be 55 to 57 per cent.

To bolster the trained workforce, the Vietnam Chamber of Commerce and Industry (VCCI) pointed out that strengthening the spillover effects of foreign-invested enterprises (FIEs) and foreign direct investment (FDI) absorption capacity while at the same time improving education will enhance the capacity of Vietnam’s workforce and the technological sophistication of domestic enterprises.

Moreover, the strong effect of geographical proximity indicates that the current predilection of policymakers for industrial zones may inadvertently undermine spillover potential. Without basic enhancements in absorptive capacity, lucrative tax breaks and subsidies will likely continue to prove less effective than officials would prefer.

The Ministry of Agricultural and Rural Development is to ensure that forest coverage is at 41.45 per cent.