Prime Minister Nguyen Tan Dung Tuesday exhorted state-owned corporations to do their utmost in fighting the economic slowdown and achieving next year’s growth target of 6-6.5 percent.

Banks should also share the difficulties of small and medium enterprises by offering credit at low interest rates, he said.

Deputy Prime Minister Hoang Trung Hai instructed the state-owned corporations to ensure work for employees, generate jobs, and closely cooperate with trade unions in dealing with wildcat strikes.

He said the textile and garment, footwear and seacooking sectors need to acquire more export contracts and the government should offer stronger trade promotion support to firms.

Hai also said the Ministry of Industry and Trade should take measures to reduce the rising trade deficit.

Deputy Prime Minister Nguyen Sinh Hung, meanwhile, urged the corporations to increase investment, reduce production costs and encourage locals to use domestic products.

He said projects that had been delayed by moves to curb soaring inflation should be restored and investment increased in cement and power projects.

Base rate reduction proposed

Chairman of the Vietnam National Textile and Garment Group (Vinatex), Le Quoc An, proposed that the government reduces the base interest rate to eight percent from the current 10 percent.

He also suggested that the government uses the planned stimulus package to offer direct financial assistance to poor people in remote and mountainous areas.

Chairman of the Management Board of the Bank for Investment and Development of Vietnam, Tran Bac Ha, said the government should accord priority to construction of offices for lease and houses for low-income people.

His bank will next year offer VND85-90 trillion ($5.2-5.5 billion) for export-oriented production and projects in ship building, cement production and energy sectors.

Stimulus package for housing

The Ministry of Construction proposed at the meeting that the government spends part of a planned stimulus package in building 10,000 flats for low-income people by 2015. The construction could cost about VND2.5 trillion ($151.5 million).

The Minister of Planning and Investment, Vo Hong Phuc, said that money from the state budget should be used to subsidize local banks so that they can give credit at low interest rates for infrastructure projects, including construction of housing for low-income people, said.

To prevent economic recession, the government has said it plans to spend $1 billion from the state budget, or over two percent of the country’s GDP, to boost investment and consumption.

However, the total value of the stimulus package, which includes money collected from other channels such as tax reductions and lower interest rates, may increase to $5-6 billion.

The government will give small-and medium sized enterprises a 30 percent discount on their tax bills in the fourth quarter of 2008 and in 2009, Phuc said, adding that the firms will also be allowed to defer for nine months the remaining 70 percent of the tax bills in 2009.

Reported by Bao Van