The Government should consider international practices to re-define its public debt in the revised Law on Public Debt Management that is scheduled for submission to the National Assembly late this month (Photo: VNA)Hanoi (VNA) - The Government shouldconsider international practices to re-define its public debt in the revisedLaw on Public Debt Management that is scheduled for submission to the NationalAssembly late this month.
Nguyen Thu Huong, a senior manager of Oxfam Vietnam,made the statement at a workshop discussing the draft law in Hanoi on October18.
According to the 2009 Law on Public DebtManagement, public debt only includes central Government debt,Government-backed loans and local government debt.
However, the World Bank and the InternationalMonetary Fund define public debt as debt liabilities of the public sectorincluding the central government, local administrations, central banks,organisations guaranteed by the State, State enterprises and funds that theGovernment has committed to pay such as pensions and insurance.
If public debt also includes debt from Stateenterprises, then the Government could issue policies to better manage thepublic debt, Huong added.
Huong also recommended adding regulations onreporting and publishing information related to public debt in the revised law.
The IMF has very detailed instructions onreporting and publishing information related to public debt, with public debtreported monthly with information on creditors, debt instruments, currency indebt, payment due dates and interest rates, she said.
Also at the workshop, Le Dang Doanh, formerdirector of the Central Institute for Economic Management, said therevised law should clearly regulate that whoever approves the spending of Statefunds is responsible for any violations uncovered later.
Doanh also suggested that under the revised law,the Ministry of Finance should be the main agency to assist the Government inthe management of public debt, instead of three agencies (Ministry of Finance,Ministry of Planning and Investment and the State Bank of Vietnam) as in thecurrent law.
Nguyen Minh Duc, an independent consultant, saidthe revised law should separate two loans under public debt, loans fordevelopment-investment spending and loans for making up deficits.
Loans under public debt should only be used fordevelopment-investment spending rather than both like now, he said.
The Ministry of Finance’s statistics showed thatVietnam’s public debt was approximately 98.4 billion USD, 64.73 percent ofgross domestic product (GDP) by the end of 2016.
According to Dr Vu Sy Cuong, from the Academy ofFinance, Vietnam’s public debt increased rapidly from 2011-16, at about 18.4percent per year on average, triple the GDP growth rate.
Thus, the Government is amending the 2009 Law onPublic Debt Management to keep public debt below 65 percent of GDP during2016-18.
Nguyen Minh Tan, deputy head of the Finance andBudget Division under the National Assembly’s Finance and Budget Committee,said that the division appreciated comments from the workshop.
“We will try to clarify some points of thecurrent law in the revised law,” he said.
Actually, the scale of public debt has beenunder discussion since 2009 and after many discussions the law came to a finaldefinition of public debt, he said.
Tan said he agreed that consistency in the Statemanagement of public debt was crucial.
“The responsibility of each relevant agency inmanaging public debt should be clearly regulated in the revised law,” he said.
On publishing information related to publicdebt, Tan said the draft law already mentioned this.
The revised law is scheduled to be submitted tothe NA at the fourth session which will open on October 23 and conclude onNovember 22.-VNA
Nguyen Thu Huong, a senior manager of Oxfam Vietnam,made the statement at a workshop discussing the draft law in Hanoi on October18.
According to the 2009 Law on Public DebtManagement, public debt only includes central Government debt,Government-backed loans and local government debt.
However, the World Bank and the InternationalMonetary Fund define public debt as debt liabilities of the public sectorincluding the central government, local administrations, central banks,organisations guaranteed by the State, State enterprises and funds that theGovernment has committed to pay such as pensions and insurance.
If public debt also includes debt from Stateenterprises, then the Government could issue policies to better manage thepublic debt, Huong added.
Huong also recommended adding regulations onreporting and publishing information related to public debt in the revised law.
The IMF has very detailed instructions onreporting and publishing information related to public debt, with public debtreported monthly with information on creditors, debt instruments, currency indebt, payment due dates and interest rates, she said.
Also at the workshop, Le Dang Doanh, formerdirector of the Central Institute for Economic Management, said therevised law should clearly regulate that whoever approves the spending of Statefunds is responsible for any violations uncovered later.
Doanh also suggested that under the revised law,the Ministry of Finance should be the main agency to assist the Government inthe management of public debt, instead of three agencies (Ministry of Finance,Ministry of Planning and Investment and the State Bank of Vietnam) as in thecurrent law.
Nguyen Minh Duc, an independent consultant, saidthe revised law should separate two loans under public debt, loans fordevelopment-investment spending and loans for making up deficits.
Loans under public debt should only be used fordevelopment-investment spending rather than both like now, he said.
The Ministry of Finance’s statistics showed thatVietnam’s public debt was approximately 98.4 billion USD, 64.73 percent ofgross domestic product (GDP) by the end of 2016.
According to Dr Vu Sy Cuong, from the Academy ofFinance, Vietnam’s public debt increased rapidly from 2011-16, at about 18.4percent per year on average, triple the GDP growth rate.
Thus, the Government is amending the 2009 Law onPublic Debt Management to keep public debt below 65 percent of GDP during2016-18.
Nguyen Minh Tan, deputy head of the Finance andBudget Division under the National Assembly’s Finance and Budget Committee,said that the division appreciated comments from the workshop.
“We will try to clarify some points of thecurrent law in the revised law,” he said.
Actually, the scale of public debt has beenunder discussion since 2009 and after many discussions the law came to a finaldefinition of public debt, he said.
Tan said he agreed that consistency in the Statemanagement of public debt was crucial.
“The responsibility of each relevant agency inmanaging public debt should be clearly regulated in the revised law,” he said.
On publishing information related to publicdebt, Tan said the draft law already mentioned this.
The revised law is scheduled to be submitted tothe NA at the fourth session which will open on October 23 and conclude onNovember 22.-VNA
VNA
