Thursday, September 24 2020


Transparency, supervision needed to reduce Viet Nam's public debt

Update: November, 05/2015 - 10:06

Nguyen Quang Thai, vice chairman of the Viet Nam Union of Economics and Science spoke to the Viet Nam Economic Times newspapers of measures for the country to reduce public debt.

Is it true that demand is overriding supply in our national budget, while public debt is at its highest level so far?

Budget shortages have been a serious problem for our country for many years.

Though we have the National Budget Law, the State budget is still divided into two segments: "within the budget balance sheet" and "outside the budget balance sheet". Meanwhile, the budget within the balance sheet is separated into the Central Government budget and local Government budget.

However, the approved state budget estimate by the National Assembly covers expenditures within the budget balance sheet and only some of the projected expenditures outside the budget balance sheet.

That's why in the annual final State balance sheet, the discrepancy between the approved budget and the real spending budget can be between 30 to 40 per cent. Sometimes overspending can amount to hundreds of trillions of dong.

During the session to approve the annual State budget, the National Assembly deputies carefully calculated each dong in the national budget. But when the Government submits a report on overspending, the deputies never analyse who should take responsibility for the overspending. How do you respond to that?

In our country, the final settlement of the national budget is reported to the NA full house meeting two years later. For example, NA deputies in 2016 will approve the final settlement on the 2014 national budget.

There are various reasons for the overspending, particularly the increase in public employees working in Government agencies, the Party and social organisations.

Many people have shifted the blame to lavish investment in public projects like Thang Long Avenue, the Ha Noi Museum and others. Do you support their argument?

I agree with those who say that most of the overspending was used for investment. I agree. But we have to look at each case separately. For example, the construction of national road 1A is something we must do.

Yet, in reality we spent money on two projects at the same time - building the new national road 1A and repairing the old 1A road from Ha Noi to Ninh Binh.

It is necessary to upgrade infrastructure, but we should take steps suitable for our financial situation.

In Viet Nam we have 63 cities and provinces, but up to 50 provinces cannot balance their revenue and spending. They have to rely on support from the State budget.

Provinces with a surplus between revenue and spending still ask the Government to let them use the surplus themselves.

In my opinion, it is time for us to restructure revenue collection and spending mechanisms.

It is reported that each Vietnamese citizen now has to bear US$1,021 in public debt. Do you think the figure scares people?

Most countries have to borrow money for development. But the issue here is the purpose of the borrowing. If the money is borrowed to buy cars or pay government officials and public employees' salaries, I don't think we should do it.

However, if we borrow the money to build infrastructure projects or to repay debts with low interest, I think we should.

Why? In these cases borrowing the money does not increase our debt.

But the issue here is that we should be transparent about how we use the borrowed money, with supervision from the public and relevant agencies.

Many people have raised the idea that Viet Nam should cut the amount of public employees in order to lessen the burden on the State budget. Do you support this idea?

I couldn't agree more!

In recent years, regular spending has increased considerably, including salaries for staff working in Government agencies and social organisations. So I think it is high time for us to think about who should receive salaries from the State budget and who should not.

In addition, we should shift some of the public services to the private sector or apply the public-private-partnership model. — VNS

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