Vietnam Gains Achievements in Fiscal Achivement and Public Investment Management

Diep Nguyen

11:15 23/07/2019

BizLIVE -

Fiscal reporting and procurement systems must be strengthened, especially competitive bidding and e-procurement as suggested in the PIMA. Efforts to reduce irregularities in land acquisitions are a good step.

Vietnam Gains Achievements in Fiscal Achivement and Public Investment Management

Photo Courtesy: Bloomberg

Despite progress in recent years, additional efforts are needed to improve governance and fight corruption. Priorities reflect recommendations of IMF TA and echo suggestions in SM/18/125 (Appendix VI). Actions are needed along three fronts as follows.
Greater Fiscal Transparency and Stronger Public Investment Management
Fiscal reporting and procurement systems must be strengthened, especially competitive bidding and e-procurement as suggested in the PIMA. Efforts to reduce irregularities in land acquisitions are a good step. 
Regarding the Public Investment Law, the authorities should aim for more clarification of roles between government agencies on project approval and between line ministries and provinces. A comprehensive PPP law that includes risk management and supervision should be finalized quickly.
Better Income and Asset Declarations, Stronger Judiciary and Legal Framework
A first priority is to further improve asset declarations to align them with best practices, by making them more centralized, expanding the information covered and the disclosure requirement. 
The independence of the Government Inspectorate should be strengthened against undue political influence and abuse. The State Audit, Government Inspectorate, and ministerial and subnational Inspectorates should be granted more resources and their technical capacity improved (World Bank 2016).
A second priority concerns strengthening the capacity of the judiciary to enforce contracts, strengthen legal interpretation, and facilitate resolution, restructuring and bankruptcy. The courts cannot handle the growing size and complexity of cases. Greater disclosure is needed of court judgments and case records; clarifying the roles of judges as arbiters rather than parties in cases; and enhancing the capacity for speedier resolution of cases.
A third priority concerns improvements in the legal framework to incorporate safeguards against unfounded criminal prosecution of public officials for good faith performance of their duties. For instance, to ensure compliance with Basel Core Principle 1.5, the legislative framework for bank supervision should include legal protection for financial supervisory staff against lawsuits (IMF FSAP 2013). 
Similarly, legislative protection against criminal liability could be provided for tax officers.
Strengthening Anti-Money Laundering systems
Staff welcomes the National Action Plan to strengthen the AML/CFT framework and execution. In line with FATF standards, the Plan envisages outreach on AML issues, training and regulatory capacity building, and closing regulatory gaps by November 2019. 
However, legislative gaps remain concerning customer due diligence for politically exposed persons. The FATF assessment which will get underway in 2019 will focus on the effective implementation of legislative provisions and institutional frameworks. Following the Asia Pacific Group (APG) assessment in October 2019, the IMF stands ready to assist the authorities in their efforts to make progress to address APG recommendations during the one-year observation period leading up to the 2020 FATF decision.
The information was taken from IMF July report.

DIEP NGUYEN

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