VietNamNet Bridge - Hanoi, the capital city, is believed to be favored over other localities, but lags far behind them in the provincial competitiveness index.

On April 17, when National Assembly deputies discussed the draft state budget law, Tran Du Lich from the HCM City National Assembly Deputies’ delegation said he could not answer HCM City voters’ question about  why Hanoi is allowed to retain 41 percent of its budget revenue, while HCM City has to hand in 77 percent of its revenue to the state budget and can only retain 23 percent.

Lich commented: “Transparency is the supreme principle. If transparency exists, no one would compare with envy like this.” 

“It is necessary to stop the ‘ask-and-grant’ mechanism. The National Assembly needs to control what is actually incoming and outgoing,” Lich said at the discussion, adding that Hanoi should think of contributing more to the state budget.

The amended draft state budget law is scheduled to be submitted to the National Assembly for approval in the upcoming session. 

Regarding the local budgets’ over-expenditures and local authorities’ borrowing, the National Assembly’s Finance & Budget Committee and the law compiler – the Ministry of Finance – have agreed on the loan maximum amount to local authorities as follows:

● Hanoi and HCM City can borrow no more than 150 percent of capital for structure construction allocated annually by provincial budgets.

● The provinces which hand in money to the central budget can borrow no more than 100 percent of capital for structural construction allocated annually by provincial budgets.

● As for provinces which receive financial support from the state budget, the figures must not be higher than 30-50 percent.

The figures, as an analyst commented, show that Hanoi is more ‘favored” than other cities and provinces. 

However, he said, Hanoi’s achievements do not correspond to the preferential treatment.

Hanoi less dynamic

The report on the provincial competitiveness index (PCI) released by the Vietnam Chamber of Commerce and Industry (VCCI) and the US Agency for International Development (USAID) showed that Hanoi ranks 26th in the country, and is the city slowest in changing management methods.

The report, released late last week, pointed out that Hanoi is the most non-dynamic city in the country in dealing with foreign-invested enterprises’ problems. 

The report also pointed out that Hanoi has a higher “prevalence of corruption” in bidding for state-funded projects than other cities and provinces. 

Tran Ngoc Nam, deputy director of the Hanoi Planning and Investment Department, said Hanoi ranks lower than Da Nang City in the PCI report because Hanoi has to deal with many difficulties and many works, especially since the former Ha Tay province is now part of the capital city.

Thanh Lich