Overview of the launching ceremony of the “Vietnam Public Expenditure Review (PER): Fiscal Policies towards Sustainability, Efficiency, and Equity” (Source: vov.vn)
Hanoi (VNA) - TheWorld Bank and the♌ Government of Vietnam on October 3 launched a joint reporttitled “Vietnam Public Expenditu𝄹re Review (PER): Fiscal Policies towardsSustainability, Efficiency, and Equity”.
Themain purpose of the assessment is to inform fiscal policy decisions and reformaction plans of the Government, particularly in meeting growth, povertyreduction, and global integration objectives.
The PER was undertaken by relevantagencies of the Government of Vietnam, led by the Ministry of Finance incollaboration with the Ministries of Planning and Investment, Education andTraining, Health, Science and Technology, Agriculture an Rural Development, and Transport, otherrelevant central government agencies, and selected cities/provinces, includingLao Cai province, Hai Phong City, Quang Nam province, Ho Chi Minh City, and CanTho city.
The review saw WB and international organization experts' contributions to the analysis and recommendations, in particular through sharinginternational experience and information on global trends and good practices inpublic financial management.
On the basis of a comprehensive analysisof revenue, expenditure and borrowing policies in Vietnam during the 2011-15period, the PER identifies state budget revenue and expenditure trends over thepast years, highlights achievements and points to areas for potentialimprovement, key fiscal challenges, and strategic directions on fiscalconsolidation, and fiscal policy and governance reforms, in the short, medium andlong terms in Vietnam.
The review is undertaken as Vietnamis experiencing emerging fiscal challenges, including narrower fiscal space,rising public debt and concerns about the medium-term sustainability of thecurren🅠t fiscal position. State budget rev🐼enue mobilization, particularly fromtax and fees, as a percentage of GDP has decreased, whilst public spendingneeds continue to grow. In addition, the rapid pace of expansion, openness anddecentralization has made the economy more complex to manage.
“In order to ensure fiscal sustainability, the National Assemblyof Vietnam has issued a Resolution requiring the reduction of fiscal imbalancesand thereby of budget deficit to 3.9 percent of GDP during 2016-2020 and no more than3.5 percent in 2020," said Do Hoang Anh Tuan, Vice Minister of Finance.
"Achieving these targets will requireconcerted efforts to boost revenue mobilisation, restructure and enhanceefficiency in spending, and strengthen the management of public assets andliabilities, and of fiscal risks – at both central and local levels,” said Tuan.
“Weare pleased that this 🐠report provides concrete recommen🍎dations on policyoptions in these regards,” he added.
“This PER comes at a critical juncture when Vietnam facesimportant fiscal choices. We hope that the report has been providing a usefulanalytical foundation for the Government and relevant stakeholders includingthe National Assembly, in further developing its medium-term development,fiscal and budget plans and priorities,” said Ousmane Dione, Country Directorof the World Bank in Vietnam.
“This process of joint review is in many waysas important as the report itself. Because it is only through our dialogue thatanalysis and ideas can be transformed into action, policies and real results.Going forward, it will be important to ensure that the knowledge gained isspread to a wider audience, through effective dissemination activities startingwith today’s launch, and follow-up engagements be taken on the implementationof the recommendations," he said.
The report recommends 68 specificpolicy measures that Vietnam can implement to achieve a gradual fiscalconsolidation while ensuring adequate fiscal space for investment and socialspending; and to improve efficiency of spending through restructuring budgetallocations between central and local government, capital and recurrent spending,and reallocation within 🐼sectors.-VNA
