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Period 2011-2020

The Strategy on Public Debts and National Foreign Debts in the Period of 2011–2020 and Visions to 2030 was approved by Prime Minister Nguyen Tan Dung in his Decision No. 958/QĐ-TTg on July 27, 2012. The following is the full content (for reference) of the Strategy.






1. Viewpoint

The compilation and realization of the National Strategy on Public Debts and Foreign Debts in the Period of 2011–2020 and Visions to 2030 is based on the following four points of view:

a) To meet the great demand for socio-economic development capital, it is very necessary and essential to mobilize domestic and foreign loans, especially when internal sources are insufficient.

b) The mobilization of loans and clearance of debts must be within the standards of safety relating to the country’s public debts, governmental debts and foreign debts in order to guarantee the national financial security.

c) It is important to renovate instruments for public debt management, diversify models of taking loans at sound costs, change the structure of loans by increasing domestically-mobilized loans, reducing foreign loans and the government’s guarantees.

d) The Government shall manage the mobilization, distribution and use of loans, debt clearance, manage the country’s public and foreign debts in an effective and safe manner.

2. Objectives

Loans shall be mobilized at proper costs and acceptable level of risks, ensuring the State budget balance and serving socio-economic development investment in a certain period of time; loans shall be distributed and used effectively to the purposes; the clearance of debts must be ensured; the indexes for public debts, government debts and foreign debts must be kept at safe levels in order to maintain national financial security in conformity with Viet Nam’s specific conditions and international practices.

3. Specific norms

a) Different sources of capital should be mobilized to serve the budget spending and investments in programs and projects on infrastructure building, transportation, health care, education and other important programs as mentioned in the National Assembly’s resolutions from time to time.

- Domestic and international loans can be taken to redeem the budget overspendings so that it is possible to reduce the budget overspendings (including governmental bonds) below 4.5% of GDP by 2015, around 4% of GDP in the period of 2016-2020 and about 3% of GDP after 2020;

- Governmental bonds will be issued for investments in transport, irrigation, health and education works, with the maximum total of VND 225 trillion in the period of 2011-2015 and an annual average of VND 45 trillion. The maximum for the period of 2016-2020 will be VND 500 trillion, of which VND 350 trillion will be spent on development investment and the rest for refinancing debts;

- Loans shall be mobilized to finance the implementation of the project on building a uniform infrastructure system to serve national industrialization and modernization in the period of 2011-2020, with the total of VND 550 trillion, averaging VND 55 trillion per year at maximum;

- The State’s credits for investments, exports and policies must be realized with selected goals and recipients;

- Loans and debt payment of local governments for socio-economic development are included in their local budgets and must be within the annual borrowing limits stipulated by the Law on State Budget and the Law on Public debt Management;

- Enterprises shall be supported in accessing foreign capital sources through re-financing loans and properly providing government guarantees to important programs and projects in the Government’s priority list within the limits of public debt safety approved by the National Assembly;

- Foreign loans taken by enterprises and credit organizations must be in the national annual limits of foreign loans decided by the Prime Minister.

b) The list of debts, conditions of taking and using loans should be adjusted to increase the percentage of domestic debts while slashing down the country’s dependence on foreign debts, raising efficiency, ensuring the capability of debt payment at appropriate costs and risks.

- The proportion of foreign debts in the Government’s gross loans shall be reduced below 50%, the minimal proportion of ODA loans must be kept at about 60% of the Government’s total foreign debts by 2020.

- Risks relating to refunding, liquidity, exchange rate, and currency must be minimized; mechanisms will be adopted to boost the development of the governmental bond market; the term of loan will be extended through issuing governmental bonds in the periods of 2011-2015 and 2016-2020 by 4-6 years and 6-8 years on average respectively.

- All debt obligations must be fulfilled in order to avoid overdue debts which can negatively affect the Government’s international commitments.

c) The country’s public debts, government debts and foreign debts must be kept at safe levels as approved by the National Assembly in specific phases and in line with international practices.

- Public debts (including government debts, Government-guaranteed debts and local authorities’ debts) must not exceed 65% of GDP by 2020, in which the Government’s outstanding debts not exceeding 55% of GDP and foreign debts not more than 50% of GDP.

- The Government’s direct debt obligations (excluding refunding) must not exceed 25% of the annual total State budget collection and the national foreign debt obligations must be below 25% of the export turnover of goods and services.

- The State foreign exchange reserve must be guaranteed over 200% every year in comparison with the annual total of short-term foreign debts.

d) Frameworks, institutions and policies on managing public debts, government debts and national foreign debts should be further perfected in order to secure stability and uniformity, meet requirements of the renovation, and create favorable conditions for the development of domestic capital markets and improve the access to international capital markets.

đ) Organizations should be continuously renewed to form modern and professional debt management agencies in conformity with international practices.

4. Public debts must be gradually slashed down, so that it will not exceed 60% of GDP by 2030, in which government debts will not exceed 50% of GDP and national foreign debts not higher than 45% of GDP.


1. Loans continue to be mobilized in line with the principle that domestic capital is decisive sources and foreign capital is important ones. It is necessary to mobilize a maximum sum of ODA capital and a proper sum of foreign preferential loans while being cautious to foreign trade loans in order to maintain the debt safety and national financial security.

2. The Government’s mobilization and use of ODA capital and foreign preferential loans to serve the implementation of socio-economic development plans must observe the Prime Minister’s Decision 106/QĐ-TTg dated January 19, 2012 approving the orientation plan on attracting, managing and using ODA and other preferential loans from donors in the period 2011-2015.

3. Governmental bonds issued in the domestic capital market will be used to mainly compensate the annual State budget overspendings and invest in transport, irrigation, health, and education projects as stipulated by the National Assembly’s resolutions. It is necessary to review and allocate sufficient capital for the projects approved by the National Assembly so that these projects can be completed and put into operation on schedule. Among new projects using governmental bonds capital, urgent and key projects will be prioritized. The Government will submit the National Assembly for approving the list of projects and the total investment for each project.

4. The Government’s foreign trade loans will be taken only to refinance effective projects and programs. However, it is necessary to pay all debts and minimize the use of these loans for balancing the State budget.

5. Governmental guarantees will continue to be provided to enterprises who take domestic and foreign loans in conformity with the annual limits of governmental guarantees in order to invest in keynote programs and projects, investment credit programs, export credit programs, credit policies and others as decided by the Prime Minister.

6. Local governments’ loans will be mobilized and used through issuing bonds or re-borrowing the Government’s foreign loans and other legal financial sources to invest in socio-economic infrastructure projects which are listed in the local expenditure plans. This process will be conducted in line with regulations of the Law on State budget and the local budgets will be used to repay on schedule.

7. Foreign loans and payments of enterprises and credit organizations must be within the annual limits of foreign trade loans approved by competent agencies. Enterprises take and repay loans in the principle of self-control and self-responsibility, except for the cases in which the Government has commitments.

8. Enterprises and credit organizations shall be responsible and obliged to use loans on purposes. They shall not be allowed to use short-term loans to investment in medium and long-term projects. They shall bear all risks and legal responsibility for mobilizing, using and repaying loans on schedule.


1. Perfecting institutions, policies and instrument to manage debts

The perfection of institutions, policies and instrument for debt management will be conducted through two periods 2011-2015 and 2016-2020:

a) Period of 2011-2015:

- To further review and remove difficulties, issue a full and uniform set of mechanisms and policies on managing public debts and national foreign debts. To focus on amending and supplementing regulations on managing and using ODA capital, criteria for public debts in terms of their sources, mechanisms for enterprises and credit organizations to take and repay foreign loans in the model of self-control, local governments’ loans and repayments, mobilization and use of preferential loans, foreign trade loans, risk management, and national credit rating in order to create a legally-effective environment for debt management in conformity with international practices.

- To issue mechanisms and policies on PPP (public-private partnership), BOT, BTO, BT, etc. to mobilize social capital sources for infrastructure development and fruitfully exploit these sources, gradually replacing the decreasing ODA loans and lightening the State budget’s investment burden.

- To set up and well apply debt instruments (strategies, medium-term programs, annual detailed plans, debt monitor indicators) as the foundation for mobilizing and using loans to serve socio-economic development in specific periods.

- To set up the mechanism for registering loans in the public sector, including debts in State-owned groups and corporations, within the limits of public debt safety approved by the National Assembly, publicize loan limits to help borrowers easily realize their loan-using projects.

- To renew and improve plans on loan mobilization and use, minimizing tautology and waste while raising efficiency of capital use.

- To revise, supplement and adjust norms and technical standards in line with Viet Nam’s specific realities and international practices.

b) Period of 2016-2020:

The implementation of the Law on Public Debt Management should be reviewed, amended, and supplemented. Other legal documents and relevant regulations guiding the implementation of the Law should be revised and supplemented to gradually relax capital transactions in order to facilitate the integration and expansion of financial and trade relations with the world through establishing a strict management system, controlling the movement of foreign capital flows, early discovering potential risks and taking precautionary measures to prevent crises of public debts and national foreign debts.

2. Further improving efficiency of loan mobilization and use

- To make full use of ODA loans and actively take preferential loans with an appropriate proportion; to further harmonize procedures; to minimize the Government’s foreign trade loans and guarantees for enterprises.

- To design public investment programs by reviewing national goal programs and keynote projects in order to lay foundation for properly mobilizing and distributing capital sources, including budget allocations, refinancing, and guaranteeing important programs and projects.

- Loans to balance the State budget must be strictly controlled, so as to secure the overspendings as set in the Strategy and gradually update the methods of calculating State budget overspendings in line with international practices.

- To raise efficiency of loan negotiations in order to reduce dependence on donors, especially in contracts on building, installing and purchasing equipment and technology with foreign loans, slash down input costs, and increase effectiveness of investment.

- Projects’ governing bodies and owners should well realize different stages of the projects: selecting, preparing the profiles and approving the projects, at the same time fully considering aspect relating to quality and efficiency of capital use, debt capacity, and stability of the project.

3. Enhancing supervision and management of risks, guaranteeing debt safety and national financial security

- To control loans through debt instruments: strategies, medium-term programs, plans, and limits on the basis of debt safety norms.

- To boost up inspection and supervision over the use of loans in order to ensure debt capacity. To strictly monitor enterprises’ mobilization, distribution, use and payment of public and foreign debts in order to minimize risks and guarantee debt safety and national financial security.

- To inspect debt payment, so as to ensure that all debts are refunded completely on time and that no overdue debts are accumulated and can affect international commitments. At the same time, it is necessary to use financial tools in minimizing risks in the public debt list.

- To build up the database of debts, which can be used to forecast, analyze, evaluate and warn risks in the list of public debts and national foreign debts. At the same time, it is essential to propose solutions for dealing with all potential risks in the debt list.

- To step up inspection, audit, and obedience of laws in loan users in order to ensure investment efficiency.

4. Developing a governmental bonds market

- To continue perfecting the bond market, focusing on renewing the method of issuance, regulations on players in the market, bidding mechanism, management of market interest rates, and market restructuring through buying unmatured bonds, exchanging bonds and other derivative tools.

- To develop domestic capital market in order to increase the mobilization of capital in Vietnamese currency, especially through developing investors’ facilities, diversifying terms, and increasing liquidity so that governmental bonds can become a standard curve of interest rate for debt instruments.

- To develop investors’ facilities, form a network of primary dealers in order to boost bond transactions in the market, and attach the issuance market and the transaction market.

- To gradually complete principles of market-based transactions and abolish the ceiling interest rate in order to draw a standard curve of interest rate for governmental bonds.

5. Tightening the management of debts in State-owned groups and corporations

- To review and complete institutions, mechanisms, policies and models of State management and owner’s management over State enterprises; to separate the State administration management and the State owner representation in enterprises; to ensure the effective representation of ownership in State-run enterprises.

- To improve enterprises’ efficiency and competitiveness, create an equal playground for enterprises in all economic sectors, guaranteeing equal opportunities and access to all resources, especially land, credit capital, and legally valuable information of enterprises.

- To speed up rearrangement and equitization of State-owned economic groups, corporations and enterprises, to consolidate and strengthen their capability, efficiency, self-sufficiency and self-responsibility.

- To inspect and monitor State-owned enterprises in taking, using and refunding loans, so that they cannot go bankrupt or insolvent. To dissolve all unsuccessful and ineffective State-owned enterprises which waste State capital.

- To continue constraining groups and corporations’ loans not three times higher than their owner equity. State-owned groups and enterprises will be allowed to invest in their main business lines and the auxiliary ones which are directly related to the main lines; they are not permitted to invest in securities, banking, insurance, and real estate (except these are their main lines). They must withdraw their capital invested in these fields no later than 2015.

- Proper measures should be taken to request enterprises with the ratio of liabilities-owner’s equity exceeding the stipulated safety level to design a roadmap for cutting down this ratio to the permitted level, so that the national financial security will be guaranteed.

6. Sufficient funds must be secured for building and realizing the debt strategy. The sum for designing and realizing the strategy on public debts and national foreign debts will be about VND 240 billion, focusing on major activities like compiling, disseminating, training, guiding the implementation, and implementing the strategy.

7. Information of debts must be made open and transparent through reports, both periodical and unscheduled, on the mobilization, distribution, use of loans as well as on refunding public debts and national foreign debts, in conformity with the Law on Public Debt Management and international practices.

8. Organizational apparatus should be completed, administrative reforms sped up, and debt management agencies modernized for higher efficiency.

- The Government will maintain its uniform management over public debts and national foreign debts through relevant agencies with specific responsibilities, competence and assignments; debts will be monitored, reviewed and supervised uniformly on the basis of collaboration between governmental agencies.

- A modern, independent and professional debt management organization will be founded in line with international practices in order to execute uniformly the State management over public debts as stipulated by the Law on Public Debt Management.

- Equipment and technology will be fully provided in order to improve the efficiency of the information system and modernize the collection, summation and analysis of the debt structure, so as to facilitate advanced debt management, development of the capital market, and international economic integration.

- Administrative procedures will be further reformed, investment and construction procedures harmonized, the distribution of State budget and the refinance of loans strictly monitored.


The strategy on public debts and national foreign debts in the period 2011-2020 and visions to 2030 will be implemented in two phases of five years each: 2011-2015 and 2016-2020 through specific plans as follows:

1. Targets and orientations for mobilizing and using loans, managing debts and norms of debt safety in each 5-year periods of 2011-2015 and 2016-2020.

2. Medium-term debt management program, started for next three years 2013-2015.

3. To develop the domestic capital markets, including the market of governmental bonds, in order to increase the mobilization of capital for the State budget and for development investments.

4. To enhance management over risks in the list of public debts in order to reduce public debt obligations and realize norms of debt safety.

5. To manage the provision of government guarantees, including specifying prioritized programs and projects provided with government guarantees in specific periods and setting up monitoring mechanisms.

6. Local governments’ mobilization, use, payment and management of debts in line with regulations on State budget management.

7. To improve efficiency in mobilizing and using loans, and refunding foreign trade loans taken by the Government.

8. To mobilize and use the Government’s ODA capital and foreign preferential loans from donors in the period of 2011-2015.

9. To design a public investment program, with national goal programs.

10. To consolidate financial institutions that are responsible for investment credits, export credits and credits for State policies (i.e. VDB, Social Policy Bank).

11. To raise the national credit rankings in order to foster the mobilization of capital on international financial markets.

12. To perfect the organizational apparatus of debt management agency, to enhance qualifications and capacity of debt management staff.

13. To further perfect database and publicize information of public debts and national foreign debts.

14. To study the public debt management in some countries and draw lessons for Viet Nam.
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