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The index of public budget increases sharply, increasing the confidence of investors in Vietnam

20:43 | 30/05/2020

VCN - According to the recently released Global Survey of Open Budget Publicity Index 2019, Vietnam's budget transparency score has increased sharply compared to previous years. Mr. Nguyen Minh Tan, Deputy Director of the State Budget Department, Ministry of Finance spoke about this issue.      

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the index of public budget increases sharply increasing the confidence of investors in vietnam
Mr. Nguyen Minh Tan

How do you evaluate the results of the recently released Global Survey of Open Budget Index 2019?

The Open Budget Survey (OBS) is an initiative to promote budget transparency, conducted by the International Budget Partnership Organization (IBP) every two years, starting in 2006.Up to now, it has been implemented in over 100 countries in the world.

The survey was conducted via an open budget questionnaire based on three major pillars: budget disclosure; public participation; supervision of legislative and auditing agencies.

Vietnam has been one of the countries surveyed by IBP since 2006, but it is entirely implemented by IBP itself (independent review).

In 2012, IBP cooperated with the Center for International Integration (CDI) to participate in a survey and assessment of Vietnam's budget transparency.

In order to ensure accuracy, transparency and objectivity, since 2015, IBP has requested the Ministry of Finance to participate in the survey process to provide comments and provide supporting documents to answer the survey questions.

2019 is the 3rd consecutive year that the Ministry of Finance coordinates with relevantagencies (Ministry of Planning and Investment, Government Office, State Audit) to participate in the evaluation process of IBP.

The results of Vietnam's budget transparency score in 2019 have improved significantly compared to the 2017 evaluation period, ranking 77 of 117 countries, up 14 levels, of which reaching 38 of 100 points for Publicity, increasing by 23 points; 11 of 100 points for Public participation, increasing by 4 points; 74 of 100 points for Supervisory, an increase of two points compared to 2017.

Evaluation results show our efforts in perfecting the legal framework, regimes and policies to increase budget transparency.It also shows the active cooperation of the authorities in the IBP survey process.

However, the assessment results also indicate our current limitations that the scores for the "Public Participation" pillar are low. The main reason is that the evaluation criteria are based on good practices of OECD countries, so they are not suitable for Vietnam's conditions.

However, subjectively, the Ministry of Finance and other relevant authorities should draw experience from information and propaganda for people in order to have solutions to encourage people to actively participate in financial policy making and State budget.

In your opinion, what has helped Vietnam achieve remarkable progress in the level of budget transparency in recent years?

The above-mentioned progress was made, first of all, thanks to the National Assembly's adoption of the 2015 SBL (effective from the 2017 budget year) with provisions on scope, subjects, content and public form that has been expanded, such as the disclosure of data and explanatory reports on the State budget estimates when the Government submits to the National Assembly.

Next is the close attention and direction of the Government, the Prime Minister, ministers, heads and chairpersons of People's Committees at all levels of local governments on the publicity of budgets of their respective branches and localities.

So far, the Ministry of Finance has published eight key budget documents that need to be disclosed in accordance with international good practice, including: budget development orientations and draft budget estimates submitted to the National Assembly, budget estimates decided by the National Assembly, citizen budget reports, quarterly budget reports, six-month budget reports, year-end budget reports, audit reports.

In which 7 of 8 documents were recognized and calculated by IBP, especially for the six-month budget report, temporary points have not been calculated because there is no quantitative information about the State budget forecast for the whole year that has been provided. In the future, the Ministry of Finance will study to complete and supplement the information in the six-month evaluation report to meet the requirements set out.

In order to create favorable conditions for people to access and participate in making budget estimates and supervising the process of managing and using the state budget, citizen budget reports are built in simple and easy-to-understand language.

At the same time, the website of the Ministry of Finance has also opened the column of Public Disclosure to fully and promptly disclose documents and data on the State Budget; Question and answer column to receive and answer questions and suggestions of the people.

In the context of many economies around the world affected by the Covid-19 pandemic, how meaningful is the budget transparency index in Vietnam highly appreciated by international transparency organizations to the beliefs of people and especially foreign investors who have invested in Vietnam in the near future?

As we all know, since the beginning of 2020, the Covid-19 pandemic has spread globally and is causing serious impacts on the world economy in general and Vietnam's economy in particular.

Prestigious international organizations have simultaneously lowered their forecast of global economic growth in 2020, of which the OECD (March 2020) is forecast to reach 2.4%, the World Bank (March 2020) forecasts to reach 2.5%, IMF (April 2020) forecast at -3%; Growth of key economies is also expected to decline seriously, in which the US is only 0.4% (ADB forecast in April 2020) or may be -5.9% (IMF, April 2020), EU at -1% (ADB, April 2020) or even -7.2% (IMF, April 2020), China 2.3% (ADB, April 2020) or 1.2% (IMF, April 2020), Japan -1.5% (ADB, April 2020) or even -5.2% (IMF, April 2020).

The capital market and the global financial market have been affected by the pandemic, so there has been a tendency to disburse capital, shifting FDI inflows from one country to another to avoid supply disruptions and dependencies.

In this context, Vietnam has implemented good control of the pandemic situation and has promoted socio-economic development and restoration activities. Although economic growth has declined (GDP in the first quarter only increased by 3.81% compared to the whole year plan of 6.8%), it is still a bright spot in the region and around the world. The macro-economic foundation and the major balances of the economy remained stable, facilitating the recovery and socio-economic development after the pandemic ended.

The Government has proactively updated and informed the situation and measures of disease prevention for the people; met and discussed with businesses to grasp difficulties and fully assess and comprehend the impact of the Covid-19 pandemic to the economy and balance the budget, thereby issuing and directing the implementation of solutions and policies to support businesses and people to overcome difficulties caused by the pandemic.

In such a situation, the fact that Vietnam's budget transparency index recognized and appreciated by international organizations will play an important role in strengthening the confidence of people and businesses, especially foreign investors, creating a basis to attract more foreign and domestic capital inflows to Vietnam.

We hope that Vietnam will continue to be a safe and attractive place chosen by foreign investors in the near future.

What will the Ministry of Finance do to continue the good implementation of state budget disclosure?

In order to implement the work of publicizing the State Budget, in the future, the Minister of Finance will continue to direct units in the financial sector to perform the following tasks and solutions:

Firstly, continue to review, study amendments and supplements to legal regulations on financial - state budget disclosure, towards international standards, such as publicizing non-budget state financial funds, publicizing details of the three-year state budget - finance plan, public forecasts on the implementation of the state budget for the whole year from the middle of the budget year.

Secondly, promoting the application of information technology in publicizing the budget to create the maximum conditions for people to access and exploit state budget information.

Thirdly, strengthening the inspection of the public implementation of budget of ministries, sectors, localities, budget-using units, and organizations supported by the state budget, ensuring implementation in accordance with the provisions of the SBL.

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Finally, actively coordinate with press agencies, civil society organizations and mass organizations to carry out propaganda activities among the people to improve their understanding and attract people's interest in the state budget activities, helping people perform the role of inspection and supervision in the process of management and use of the state budget of sectors and levels.

By Hong Van/Bui Diep