The Ministry of Finance (MoF) is publicly seeking opinions in regard to a draft government decree requiring the ministry and local governments publicize State financial reports from 2018.

The draft decree requires State agencies to publicize budget collections and expenditures, financial funds, public debt, State capital in businesses, State assets, and capital use.

Their publication will be implemented via MoF and local government websites. MoF will also be required to provide printed financial reports.

Deputy Director of the Financial Economic Institute at MoF’s Finance Academy, Dr. Nguyen Duc Do, believes that this is a new management and governance step from the State to meet international auditing standards. “These figures are not currently being publicized so this idea should be welcomed,” he said.

Within the current state of the economy there is a need for transparency in the State budget to ensure the economy operates effectively and does not fall into a debt crisis. Not only that, when residents monitor expenditures State agencies will be cautious in using State funds, as right now there are still cases where local government expenditures are nowhere near the actual figures.

If information on State assets and monetary situation is publicized it will attract attention from citizens. Officials will need to be more cautious when using State budget funds and use them arbitrarily. Rather, when using State budget funds they will need to tighten their spending and will therefore reduce losses and corruption, Mr. Do said.

For citizens, this will create a channel to monitor how effectively tax money is used. When the decree comes into effect the State will have another management tool and citizens will have more chance to monitor and know the truth about the State’s finances. “In the meantime, publicizing the financial reports of local governments will be fundamental in assessing the competitiveness of each province, ensuring transparency and publicity,” Mr. Do added.

Many experts, though, believe that the State publicizing financial reports is necessary not only for citizens and the local businesses community but also for foreign investors and organizations. If this information is provided in full and is reliable, efforts to attract FDI will be easier. The State can also borrow from foreign partners with favorable conditions in loan terms, interest rates, and other matters. 

There are still concerns, however, about the transparency of information as well as the monitoring mechanism.

Facts show that without responsibility specifically attached to an individual or organization the implementation of State tasks have always failed. Information is often provided late, is inaccurate, or is not in accordance with standards.

In contrast, if foreign countries and organizations do not receive necessary information the State will find it hard to take out loans from them. At present, Vietnam has to issue sovereign bonds in international financial markets and must compete with rivals when doing so.

According to MoF, foreign countries and international financial organizations always ask Vietnam to provide adequate information about State finances when they discuss aid programs. The International Monetary Fund and the World Bank said they are willing to support Vietnam in developing State accounting systems.

VN Economic Times