VietNamNet Bridge – The simplification of Viet Nam’s governance structure over the last decade or so has not resulted in significant changes in policy-making and macro-economic management.

Administrative officials of the southern province of Kien Giang’s An Bien District meets with local residents regarding their complaints and denunciations. Public administration has improved over the years but not to the extent required, said Phung Quoc Hien, vice chairman of the National Assembly. — VNA/VNS Photo Le Sen

The process began in 2007, but the bureaucracy is still bloated and its payroll continues to increase in size, exerting greater pressure on the State exchequer. 

Acknowledging the hurdles still in the way of administrative reforms, the Party has called for stronger and more practical reforms, from the grassroots to the central levels.

Speaking at the opening ceremony of the sixth Party Central Committee Meeting earlier this month, Party General Secretary Nguyen Phu Trong expressed high appreciation of efforts made by the Party, the Government, the Viet Nam Fatherland Front and other agencies in accelerating institutional changes. 

However, the wait is still on for a positive breakthrough that can affect far-reaching, sustainable changes. 

According to a Government report, since 2007, its structure has been simplified, with 18 ministries, four ministry-level agencies and eight Government agencies. However, in August 2017, the National Assembly (NA) Supervisory Delegation pointed out that the change has created no significant impact in terms of policymaking and macro-economic management.

The socialisation and decentralisation processes have not been conducted efficiently. The merging of ministries has not included due adjustments of their functions. Therefore, some agencies are now overwhelmed with tasks and projects that should be handled by subordinate entities. 

The resolution adopted by the Politburo in 2015 has had little effect on reducing the number of public units as 28 and 822 new public units were established under ministries and general departments, respectively from 2011 to 2016.

Phung Quoc Hien, NA Vice Chairman, said public administration has improved over the years, but not to the extent required. This wastes State Budget resources and keeps the bureaucracy cumbersome and impractical, he said. 

Overlapping functions 

The increase in the number of public agencies has led to overlapping management of many issues, sparking conflicts of opinion among many ministries.

For instance, food safety, tourism, debt and rural development can fall under the purview of two or three ministries. Enterprises’ spending on specialised evaluations are multiplied since conclusions are not mutually recognised among ministries.

Additionally, interdisciplinary agencies are established to solve common issues, increasing the number of meetings held to tackle them. Su Ngoc Anh, director of the HCM City Department of Planning and Investment, said that in the seven first months of 2017, the department leaders attended more than 2000 conferences, three to four per day, not to mention emergency meetings. Such prolificacy is expensive and places a huge burden on the State budget. 

Lack of legal uniformity

The lack of a synchronised legal framework has obstructed ministries from properly implementing the Party’s policies. Moreover, special laws have not promoted proper decentralisation and have failed to address the issue of power concentration in the economic sector. 

Furthermore, the functions and duties of ministries and Government’s agencies are not clearly legislated; and this is one of the factors contributing to the increasing size of the bureaucracy. 

State fiscal dependence

The continued dependence of public units on Government funding indicates inadequate management of financial resources. The State budget allocates funds for paying 5.4 million people on the public-sector payroll. To ease this burden, the Government has been encouraging public sector units to manage their own affairs, including finances, and improve the quality of public services. 

They have been allowed to plan their use of State budget allocations, develop the human resources, expand operations, raise workers’ wages and sign labour contracts in order to complete assigned tasks. Agencies that can control their operational costs can also decide on their payroll. 

Meanwhile it is worth bearing in mind that 30 per cent of the State budget spends on public agencies, according to Le Vinh Tan, Home Affairs Minister.

Tan also stressed the abundance of public agences in localities. The central province of Thanh Hoa, for example, is home to 2,500 agencies, while Dak Nong Province has 500, mostly in education, health and science research. 

In 2016, about 57,000 public agencies, accounting for 27.33 per cent, were self-funded, and the remaining depend heavily on the State budget. 

A report prepared by the Ministry of Science and Technology (MoST) in 2016 indicated that there were 1,432 public scientific organisations, more than the Government can actually fund with only three financially independent ones.

Deputy Prime Minister Vuong Dinh Hue has noted that in the sci-tech sector, skilled staff (scientists, technicians, etc) are few, with the majority comprising management officials.  

According to Nguyen Huu Quang, deputy head of the NA Financial and Budgetary Committee, inadequate financial mechanisms are causing dependence and preventing public sector units from attracting funding from other sources, he said. 

At the meeting, Party leader Trong stressed the need to create favourable conditions for researchers and scientists with priority policies, improve public services quality and avoid misspending.

Payroll reform 

Public sector restructuring does not just mean a reduction in staff, it also requires enhancing efficiency, said NA deputy Le Thanh Van of Ca Mau Province. 

While the restructuring policy has been around for a long time, its implementation has remained incomplete. NA Chairwoman Nguyen Thi Kim Ngan said “We all agreed upon restructuring the public sector, however, no one wanted to carry it out in their localities or agencies." 

Deputy Van from Ca Mau Province said at an NA meeting that while State expenditure keeps increasing, the quality of staff varied.

As of mid-2017, the numbers of civil servants and staff were estimated at 270,000 and 2.44 million respectively. In general, the State payroll witnessed a decrease from 2011 to 2016, especially between 2014 and 2016, when staff strength reduced by 4,000 each year. However, in 2016, the number rose again, mostly in the education and health sectors with increases of 136,663 and 54,500 staff respectively. 

There is one public staff in every 40 people in Viet Nam while in US, the ratio is 1:160 in the 30 times bigger area and four times higher population.

A Government report shows that 13 of 15 ministries and ministerial-level agencies have exceeded their payroll target. Only the Ministry of Industry and Trade and Ministry of Home Affairs have proposed that they reduce their staff; the others asked to recruit more. 

After two years of implementing the Politburo’s resolution on public sector restructuring in 2015 and 2016, more than 17,000 staff reduced, including 731 working in Party agencies, 2,253 working at administrative offices and 11,206 working in other public sector agencies. 

As noted in an earlier example, the public sector has witnessed an increase in the number of management officials over skilled staff. 

From 2011 to 2016, the number of managers in ministries’ departments increased from 12,216 to 14,556. A similar increase was also seen in ministry-level agencies and other Government bodies, with the number of managers rising from 3,871 to 4,619. 

This excess is also true of localities, leading to poor management and responsibility in the public sector, Van said. 

Budget burden

At a time when the pressure of public debt has been rising, the spending on bureaucracy is accounting for a huge proportion of the Stage budget. 

According to Nguyen Huu Quang, deputy head of the NA Financial and Budgetary Committee, in the last five years, regular expenditures increased rapidly, from VND370,000 billion ($16.2 billion) in 2011 to VND740,000 billion ($32.6 billion) in 2016. Therefore, financial security is not guaranteed, he said. Debts are not being repaid on time, and have to be rolled over. Over the past three years, State assets have been sold and additional dividends paid to offset the expenses. 

Economist Pham Chi Lan said the State budget cannot pay for 11 million public staff across the country. She also emphasised the importance of autonomy for public agencies to deal with this situation.

Other experts have said that while reducing the number of people on the State payroll, the public sector needs to enhance the capacity of remaining staff.

Van noted that if Viet Nam can annually reduce the State payroll by 1.5 per cent each year, State budget spending can save from VND800 to 900 billion ($35.2 to 39.6 million). But it was important that the restructuring focuses on staff quality, not quantity, Van said. 

VNS