The Government has conferred the strongest and most radical authority at the local level on HCMC, associated with the supervision of the responsibilities of its leadership, stated Chairman of the Government Office Mai Tien Dung.

HCMC is a major locomotive and economic center as it contributes 28% of the nation’s GDP and nearly 30% of the country’s budget collections, where new policies are quickly adopted, many pilot projects are carried out and multiple macro initiatives and proposals have originated, Dung remarked at a meeting between the working group of the Prime Minister and the municipal government last Friday.

On that basis, the Prime Minister has decided to apply a strong decentralization mechanism to HCMC, with the duties the Government was previously in charge delegated to the city.

“Decentralization for HCMC is the most powerful and most thorough. In the city, the redistribution of tasks for ministerial and local units is conducted on a pilot basis to draw on lessons for other parts of the country in the spirit of intense decentralization associated with inspection and supervision of leaders’ responsibilities,” Dung said.

At a meeting with Deputy Prime Minister Vuong Dinh Hue this May, the HCMC government proposed that as a special municipality and the economic locomotive of the nation, the city should be provided with specific mechanisms and policies that guarantee financial and budgetary decentralization, and help generate financial resources for faster growth, thereby increasing the city’s contributions to the central Government.

Specifically, regarding a specific financial mechanism, the municipal government looks to get part of import and export tax revenues (8-12% of the total) in 10 years as an additional funding source for development of roads, river ports and seaports to facilitate inter-regional connectivity.

Besides, HCMC wants to study a mechanism for surcharges on some business operations in the city consistent with the actual situation. This source shall not be sent to the central level and not included in the budget balance at the beginning of the stable period.

The city is retaining 23% of its total budget revenues, well below 29% in 2001-2006 and 26% in 2007-2010.

HCMC Chairman Nguyen Thanh Phong told the working group of the Prime Minister that the municipal budget revenues were expected to reach VND310 trillion this year, higher than the planned VND298 trillion. Next year, it is forecast that the city would collect VND370 trillion.

Phong urged greater decentralization, with additional mechanisms to play the role of an economic locomotive. “The tasks assigned are for a locomotive yet the mechanisms are for a carriage, making it difficult to implement,” he explained.

SGT