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It is required to unify the focal point for public debt management

10:09 | 20/08/2017

VCN -  On August 17, 2017,  National Assembly Standing Committee comments on the report explaining, receiving and correcting the project on Law on Public Debt Management (revised). According to a summary of the National Assembly State Budget and Finance Committee and the Ministry of Finance, while the other contents have received a high level of consensus, the content of unified public debt management function still has different opinions.

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it is required to unify the focal point for public debt management

Unified management is one of the reasons for the gradual increase in public debt amounts and passivity in borrowing. Photo: S.T

Still wondering

Recognizing contributions from the market as well as consultation workshops, many deputies propose to unify one focal point for public debt management. Some also agree to unify one focal point but consider not to negotiation point with international organizations. Some propose to carefully evaluate the efficiency of unify the public debt management to one focal point. Some others disagree to unify the public debt management to one focal point and propose to remain the management structure as current. Accordingly, verify agency and drafting agency plan to introduce 2 options.

The first option is to absorb the opinion of unifying one public debt management agency. Because the Resolution No. 07 / NQ-TU of the Politburo on policies, measures to restructure the state budget, public debt management requires to unify the public debt management to overcome the overlapping management of public investment and public debts, which have not associated with budget balancing, borrowing, allocation and use. Law on public debt management (revised) needs to institutionalize this policy in order to overcome these shortcomings and exigencies. In addition, the unified focal point also meets the requirements of administrative reform, saves costs in debt management and create timely conditions to cope with changes and performance of the domestic and international debt market as well as comply with international practices.

The second option is to remain the stability of the apparatus, not to disorder the structure, functions and duties of some agencies and not to amend relevant laws, that means remaining the draft law which was submitted to the National Assembly at the meeting in June 2017, but more clarify some contents. Specifically, the Government is responsible for unifying the state management of public debt; adjusting the functions and tasks of the ministries and branches in the public debt management process in order to specify the tasks, powers and responsibilities of each agency in debt management and overcome current inadequacies and shortcomings. Of which, the Ministry of Finance negotiates and signs framework agreement and specific agreements. Ministry of Planning and Investment unifies the public investment management. The State Bank of Vietnam implements foreign exchange management

Separate implementation is no longer remained

Supporting the first option, Assoc. Prof. Dr. Dinh Trong Thinh (International Finance Faculty - Financial Academy) said that the management of public debt is now very dispersed with 3 clues. However, the Ministry of Finance is a general management ministry but the fact that ministries and sectors manage public debts under their functions and tasks and then report to the Ministry of Finance for statistics and summary. From 2000s, it was said that the public dents must be managed by one focal point under the Government or Ministry of Finance, thereby summarizing, planning and implementing projects of borrowing, debt management and debt handling to meet the requirements of comprehensive uniform and management policies. However, the status of separate implementation still exists, making the search for domestic and foreign fund sources, the debt management and the efficiency in debt use not to achieve results as expected. This is one of reasons making public debts gradually increase, borrowing become passive and restructure quite hard.

According to Assoc. Prof. Dr. Dinh Trong Thinh, the uniform of public debt management to one focal point agency is extremely urgent. This agency may be placed at the Ministry of Finance but must be governed by the Government. It is suggested that this agency should belong directly to the Government and manage Government's public debts only. However, this option will create a new apparatus for public debt management and relatively cumbersome and does not attach state budget revenues and expenditures with debt management. "In my view, it should be revised and attached to the Ministry of Finance. We already have the Debt Management and External Finance Department, as well as policies on public debt management under the Ministry of Finance, so we can promote it. Along with that is to gather amounts related to public debt management, which are being managed by other ministries to the Ministry of Finance. Since then, there has been a unified debt management policy from making borrowing plan to repaying the debts in order to use effectively the public debts of the economy, "said by Assoc. Prof. Dr. Dinh Trong Thinh.

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Similarly, former Deputy Chairman of the Economic Committee of the National Assembly Dang Van Thanh said that the assignment of three agencies jointly managing public debt is causing unspecific allocation of responsibilities in both legal science and actual development of long-term debt strategy. There is no focal point for debt management, leading to a lack of coordination at macro level between fiscal, monetary policy and debt management policy. Unspecific allocation of responsibilities also leads to a lack of initiative in debt management, and not reducing the cost of borrowing. Sometime, foreign capital has not been used up, but the country still implement the capital mobilization as planned, raising costs of capital mobilization. From the above restrictions, the development and operation of a specialized unit in charge of managing, regulating, borrowing and repaying debts are necessary.

State Auditor General Ho Duc Phuc: it is required to unify the public debt management to a focal point and the focal point must take full responsibility under the Government from explanation to monitoring and supervision of public debts. Other agencies are under the assignment of the Government in close cooperation according to their functions and tasks. With the current conditions, the Ministry of Finance is the focal point, which is the most reasonable because the agency is responsible for repaying and monitoring the use of the budget. Public investment is also a budget and is managed and used as a budget. Therefore, the Ministry of Finance is the unit in charge of monitoring, supervising, advising and repaying debts, that is right option.

By Hong Van/ Huyen Trang