Foreign partners support Vietnam’s public finance management reform

International organisations and development partners have contributed significantly to the Ministry of Finance’s positive outcomes on the reform of public finance management, said Finance Minister Dinh Tien Dung.

Dung made the statement at a high-level dialogue of the Public Finance Partner Group (PFPG) held in Hanoi on June 3.

He said the cooperation with the World Bank to design a public finance report is a milestone in improving public expenditure management.

He noted future focuses must be restructuring the State budget for efficient regular spending, public debt management and resources mobilisation to ensure the nation’s finance security.

Concurring with the minister, WB vice president for East Asia and Pacific region Victoria Kwakwa said this year’s report has been released while Vietnam is making key decisions on State budget.

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Vietnam has overcome a macroeconomic crisis, put inflation under control and revived the local business climate, she said.

She expected the report on expenditure would help the Government draft its middle-term budget plan, which could include boosting budget collection and optimising the use of limited resources.

In 2015, the Finance Ministry and its partners prioritised 14 cooperative activities for 2015-2016, ten of which were completed on schedule in May 2016. They proposed continuing collaboration on the four remaining activities for 2016-2017.

Apart from the set plan for 2015-2016, the ministry worked with the Asian Development Bank and the French development agency ADF to hold a seminar on State participation in public-private partnership projects and with Canada to design processes and regulations for drafting legal materials.

Coordination obstacles facing the group included, the different views and organisation of each partner. Some tasks put forward at their last dialogue in 2015, including setting up a working apparatus and compiling a list of group coordinators, which have yet to be completed due to a shortage of finance and human resources.

Vietnam has recently attained an economic growth rate of 6.68 percent with low inflation and an upbeat import-export market. The country’s participation in a number of free trade agreements has provided ground for further global integration. However, the local economy has also been affected by slow global economic recovery, low oil prices and a prolonged drought.

Vietnam’s economic reform is expected to benefit the country in the long-term but has fueled shortcomings in the short term, such as a support policy for businesses in need which is contributing to overspending of the State budget.