VINACHEM

The decision followed a Ministry of Finance proposal at the monthly Cabinet meeting in Ha Noi yesterday.

Total spending for the allowance would be up to VND3.1 trillion (US$147 million), which would come mainly from the State budget, said Minister and Chairman of the Government's Office Nguyen Xuan Phuc.

The beneficiaries would include State employees in both central and local agencies, kindergarten teachers and military officers, all on very low salaries, roughly less than VND2 million a month, based on a Government scale.

The policy would also apply to pensioners, beneficiaries of social insurance at low rates, those having made contributions to the revolution and those classified as poor under the new standard (with monthly incomes less than VND400,000 in rural areas and VND500,000 in urban areas).

The allowance will be between VND100,000 and VND250,000 each and will be allocated twice during the second quarter of this year.

"In the context of economic difficulties, this policy demonstrates huge efforts from the Government to ensure social security," Phuc said.

Meanwhile, public spending has been cut by VND3.4 trillion (US$161 million) after 1,400 non-urgent projects were put on hold under Government resolutions to control inflation and stabilise the macro economy.

The figures were revealed by the Ministry of Planning and Investment at the Cabinet meeting in Ha Noi.

The spending cuts were made by 30 ministries, central agencies, 63 provinces and cities as well 12 State-owned economic groups and corporations by suspending unnecessary projects or cutting costs on inefficient or sluggish projects.

Permanent Deputy Prime Minister Nguyen Sinh Hung told the meeting close co-ordination was needed among ministries and agencies in controlling inflation but it should not compromise national growth.

The money collected from spending cuts would be transferred to urgent projects.

The meeting aimed to review socio-economic matters during the first three months of the year and the execution of the two Government's resolutions.

Resolution 02 on measures to boost growth and the State budget forecast took effect from January. Resolution 11 on key measures to control inflation, stabilise macro economy and ensure social security came into effect from February.

The meeting reported that GDP in the first quarter of the year was estimated at 5.43 per cent, of which industrial production rose by 14.2 per cent and agriculture 3.5 per cent. State revenues were up 21.2 per cent on the yearly forecast, the highest rate over the past three years.

Foreign direct investment reached $2.54 billion or 1.6 per cent up from the same period last year. The whole country reported 173 newly registered projects with a total investment of $2.04 billion.

Total export turnover was estimated at $19.2 billion, an increase of 33.7 per cent over the same period last year and three times higher than planned by the National Assembly. Major export products were rubber, garment, shoes, electronics, computers, seafood and coffee.

Cabinet members also heard there had been gains resulting from tight policies on credit, interest, foreign currency and gold.

The State Bank of Viet Nam had requested credit organisations to adjust their business plans and credit structures to prioritise capital for production and trade, exports and small and medium enterprises.

The bank is now revising penalties against illegal trading of foreign currencies and a draft decree on gold trading.

Last month, police and authorised bodies imposed fines on organisations and individuals found stockpiling or illegally trading in gold and foreign currencies.

The meeting was told that the first three months' money supply rose just 1.7 per cent and the total outstanding loan increased by 3.68 per cent against late last year.

The members agreed that political unrest in some countries in the Middle East and North Africa, plus pressures from the price hikes in the world market, had caused difficulties in controlling inflation, which was up by 12.79 per cent in the first quarter compared to the same period last year.

Epidemics and natural calamities also had affected agricultural production and human lives.

Though many social welfare measures had been adopted, particularly to assist low-income earners and the poor, the Government has urged more drastic and concerted measures.

This year, nearly 343,000 people have been offered jobs, including 17,000 sent to work abroad.

The Government has also helped bring home more than 10,000 workers from Libya and offered each one VND1 million in compensation.

Prime Minister Dung hailed attempt from ministries, sectors and localities in carrying out the Government's measures with remarkable results.

Dung urged continued measures to prioritise inflation control and macro economy stabilisation as well as more attention to employment and people's lives.

He also asked the Ministry of Industry and Trade to closely control imports of car, motorbikes, mobile phones and wines. The ministry was also told to work out measures to ensure sufficient power for production, to boost exports and to closely watch prices.

The Ministry of Construction was requested to keep a close eye on the real estate market. — VNS