Vietnam's GDP grows by 6-7 percent per annum
“There are many overlapping expenditure items. The state budget disburses money for many unnecessary items, which leads to a sharp increase in regular expenses. It’s more than the state budget can bear,” said Le Dang Doanh, an economist.
Doanh said, for example, on the same flight from Hanoi to HCM City, a Vietnamese deputy minister sat in a business class seat, while the leaders of the World Bank, IMF and the ambassadors of the countries that lend money to Vietnam were in economy class seats.
“I was also a passenger on the flight and I flew economy,” Doanh said. “So you can see, developed countries which provide loans to Vietnam practice thrift, while Vietnam, a developing country which is thirsty for capital, doesn’t think of saving money.”
Regular expenses are too high and many expenditure items are unnecessary: these are comments regularly seen in reports about the state budget.
According to Doanh, the laws of other countries set strict regulations about the treatment of officials on business trips.
When officials take long-distance flights which take 5-8 hours, they can book business-class tickets. For short-distance flights, from Hanoi to HCM City, for instance, which takes one hour and 40 minutes, economy class would be reasonable.
The regulations are different in Vietnam. The treatment of officials depends on their positions, not on the distance of flights or importance of the duties. Do Anh said this is an item that Vietnam can cut to save money.
A state official in Hanoi explained that current regulations clearly stipulate the types of cars high-ranking civil servants can use. Higher ranking officials can use more luxurious cars, and the cars allocated to officials now are more expensive than previously, worth billions of dong.
The official agreed with Doanh that the state’s money is being wasted. “Many high-ranking officials only fly business class, and many officials spend state money on their private trips,” he said.
He said that now is the right time to think of reforming state budget management and cut unnecessary expense items.
A report found that regular expenses have decreased in recent years which now account for 63 percent of total expenses instead of 70 percent as seen previously. However, Doanh believes that 63 percent is still a high figure.
The Ministry of Finance, which is drafting the state budget for 2019, estimates that overexpenditures 2019 will be 3.6 percent of GDP, or 0.1 percent lower than 2018.
The nation’s foreign debt is near the ceiling of 50 percent of GDP.