A limit of public debt to no more than 65 percent of the gross domesticproduct by 2020 and 60 percent by 2030 has been targeted in a nationalstrategy approved on July 27.

Public debt is the debt owedby the central Government and local governments as well as loansguaranteed by the Government for financing national operations.

By 2020, the Government's debt is not to exceed 55 percent of the GDPand borrowing from foreign countries will not be higher than 50 percentof the GDP. By 2030, the correlative figures should be 50 percent and 45percent.

To meet these goals, borrowing to cover Statebudget overspending needs to fall to below 4.5 percent of the GDP by2015, 4 percent by 2020, and 3 percent after 2020.

PrimeMinister Nguyen Tan Dung said the strategy is to balance the Statebudget and investments for socio-economic development in specificperiods, to assure efficiency in mobilising and using loans and tomaintain the country's financial security.

The nation canissue a maximum of 225 trillion VND (10.82 billion USD) worth of Statebonds by 2015, and 500 trillion VND (24.04 billion USD) in 2016-20, toraise funds for developing health care, education and traffic andirrigation works.

It can borrow around 550 trillion VND(26.44 billion USD) maximum by 2020, or an average of 55 trillionVND (2.64 billion USD) per year, to build infrastructure for theindustrialisation and modernisation process.

Investmentand export credits, locality borrowing, as well as enterprises andcredit institutions approaching foreign loans, must be performedreasonably and selectively in accordance with Government targets, Dungnoted.

Since "domestic capital is decisive and foreigncapital is important", borrowing portfolios "need to be adjustedfollowing a direction of increasing domestic debts and graduallylessening the country's dependence on foreign debt".

By2020, the value of foreign loans is to fall to below half of that oftotal Government's debt while the value of official developmentassistance capital should account for about 60 percent of its totalloans from overseas.

Dung urged the country to minimiserisks involving currencies, exchange rates and capital liquidity andboost the development of the State bond market. The average term ofState bonds should be extended to 4-6 years by 2015 and 6-8 years by2020, he said.

Dung asked for debt payment responsibilitiesto be fully performed, noting that there shouldn't be overdue debts toavoid affecting the country's international commitments.

He specified that the Government's debt mustn't exceed 25 percent oftotal State budget revenue each year while foreign borrowing should belower than 25 percent of total export value. Foreign exchange reservesalso need to be double that of short-term foreign loans annually.

Dung urged the country to speed up the development of the domesticcapital market and actively take part in the international capitalmarket, in addition to strengthening risk supervision for nationalborrowing, especially State corporation debt.

He saidappropriate mechanisms for public-private partnership and otherinvestment co-operation models, such as build-operate-transfer, areneeded to better mobilise capital from the society for infrastructuredevelopment.

These forms should be effectively exploitedto gradually replace ODA sources, which are tending to decline, and easethe burden on the State budget, he said.-VNA