|National Assembly (NA)'s Commission of Finance and State Budget Deputy Chairman Tran Van speak at the NA meeting session yesterday, warning of the increasing state debts over the years. — Photo dantri.com.vn
HA NOI (VNS) — It is time for Viet Nam to tighten its belt itself rather than be forced to do so by international financial institutions, warned deputy chairman of the National Assembly (NA)'s Commission of Finance and State Budget yesterday following the latest reports showing the state budget was running in the red.
Tran Van gave out his alert in the afternoon meeting session of the NA yesterday which focused on the years-going unbalanced budget spending and efforts to map out a financial plan to tackle the issue in 2016 that will soon arrive in less than two months.
The unbalanced budget spending rate has been on-going for years at more than 5 per cent of GDP a year, said Van, rocketing from VND112 trillion (US$4.9 billion) in 2011 to VND226 trillion ($10 billion) this year.
The situation just got worse with the huge amount of government bonds sold of about VND85 trillion ($3.7 billion) in 2015 alone, together with the over disbursement of Official Development Assistance (ODA) funding of VND30 trillion ($1.3 billion) this year compared to the original budget plan agreed upon late last year.
"The consequence was that the state debt mounted up quickly at the five-year average rate of 20 per cent a year, from VND1.3 quadrillion ($58.3 billion) in 2011 to an estimate of VND2.7 quadrillion ($121 billion)", he announced to the NA.
Regarding Viet Nam's capability to pay off its debts, Van said that the country has already failed to do so in the last two years, and only managed to pay the old debts by borrowing new loans when the deadlines came.
"2013 was the first time we had to borrow new loans of VND40 trillion ($1.7 billion), but it soon climbed up to VND77 trillion ($3.4 billion) in 2014 and VND125 trillion ($5.5 billion) in 2015," said Van.
"It's hard to say that everything is doing well when we can't pay the debts on its deadlines but have to restructure debt in order to prolong the pay-off time."
Van also blamed the alarming situation on the increasing use of loans and the no-sign-of-decreasing spending amounts of a government system of which officials' capabilities have yet to be improved along with serious red-tape.
Ha Nam Province NA Deputy Phung Duc Tien seconded that, adding that the budget spending used for organising events, festivals and overseas business trips still accounted for quite a high cost in the annual budget.
In order to prevent further looming increases in the state debts, the deputy chairman of the National Assembly (NA)'s Commission of Finance and State Budget suggested the NA and the Government consider "freezing" the overspending amount set for next year, currently at VND254 trillion ($11.2 billion), for the next three years instead of deciding on a yearly rise based on the percentage ratio to GDP like the government has done until now.
He also asked to "freeze" new recruitment at state agencies and organisations in the next three years to "re-identify" the posts of government officers, aiming to a big slash in the number of state officers in the future in an effort to reduce budget spending. – VNS