[By Vivel Ramkumar | Contributor]
When President Obama arrives in Vietnam this weekend, he will surely praise its leaders for their impressive achievement of sustained economic growth and poverty reduction. He will also talk about the benefits of the Trans-Pacific Partnership, thanking Vietnam for being part of the trade pact. But he should also highlight how modernizing governance can play an essential role in fulfilling Vietnam's aspiration of future prosperity.
Image: Vietnamese Deputy Prime Minister Pham Binh Minh shakes hands with U.S. Secretary of State John Kerry in Washington, D.C. in March. (Jim Watson/AFP/Getty)
There are signs that the government is acquainted with these issues and the changes they entail. A recent example is the path charted in "Vietnam 2035," a report that the government released earlier this year with the World Bank. (See here.) The report lays out how Vietnam can grow its economy while protecting its environment, promote equity and social inclusion, and improve the state's effectiveness and accountability.
The report highlights the interconnectedness of the economic and governance challenges that Vietnam faces as it enters the next phase in its development. For instance, it points out that Vietnam, as it loses access to concessional financing, will need to rely more on global capital markets, stating that this will "expose the country more directly to the scrutiny of global capital markets and private creditors, placing additional demands on prudent fiscal management and transparency, and the country's creditworthiness more broadly."
This observation is quite timely, as the government has been trying since last year to find an auspicious moment to issue $3 billion of bonds on the international markets. (See here.) In this context, one important way through which the government can woo risk-averse international investors is through increasing fiscal transparency, which is shown to improve the marketability of sovereign bonds.
Vietnam has a poor track record on fiscal transparency, as measured by the International Budget Partnership's Open Budget Index (OBI), an independent assessment of budget transparency. (See here.) The 2015 OBI found that Vietnam did not achieve basic international standards on budget transparency by failing to publish in a timely manner two of the most important budget documents: its budget proposal for the coming year (which the government presents to the legislature for approval) and its audit report (which independently verifies whether the government has executed the authorized budget in line with the law).
Encouragingly, Vietnam seems to be moving in the direction of sharing more information on the national budget with its citizens and international investors. Last year, Vietnam revised its State Budget Law and inserted provisions that require it to publish the state budget and related reports starting from the 2017 budget. This means the government should publish its budget proposal later this year. Having the budget available to the public in advance of being adopted by the National Assembly will be an important and welcome change, creating an opportunity for citizens and civil society to have input into plans for raising and spending public funds.
The significance of the change, however, will depend in part on how much information is presented in the document. It should include detailed estimates of expenditures, revenue, and debt. But it should also shine light on some of the darker corners of fiscal policy, such as extra-budgetary funds, support for state-owned enterprises, and quasi-fiscal activities. And then information on the approved state budget should be complemented later, once the fiscal year is completed, with an assessment of the actual results achieved from the implementation of the budget.
If Vietnam publishes its budget and audit report consistent with international norms, then it will fulfill two key requirements for joining the Open Government Partnership, a global multistakeholder initiative for open and accountable governance. While a number of countries interested in improving their image internationally would like to be a member of the initiative, OGP sets minimum good governance requirements that a country must meet before it can join. (Seehere.) Once a member, a country then lays out an action plan for future changes to promote transparency, empower citizens, and fight corruption - steps that are precisely in line with Vietnam's desire to modernize its economy and bolster the state's effectiveness and accountability.
While Vietnam has been well short of meeting the minimum OGP requirements, with the recent changes to its budget law, as well as a newly adopted law on access to information, it is now very close to becoming eligible for OGP membership.
President Obama should seize this opportunity to encourage Vietnam to commit to joining OGP and offer U.S. support to help make it happen. The United States already provides technical assistance to Vietnam's Ministry of Finance. It could redouble these efforts, assisting Vietnam in steps it is taking to improve fiscal transparency, consistent with both its revised budget law and OGP requirements. Other assistance could also include fostering a more open debate around the budget, with opportunities for civil society input.
OGP membership would also be a logical complement to the Trans-Pacific Partnership. Improved governance, including more open and responsive budgets, are the best way to help ensure that the gains achieved from economic reforms can have a positive impact on all sections of the population, particularly the most vulnerable. Making the commitment to join OGP would be an important step for Vietnam on its path to building a solid foundation for future prosperity.
Joel Friedman and Duong Thi Viet Anh co-authored this piece.
Vivek Ramkumar is director of International Advocacy & the Open Budget Initiative at the International Budget Partnership, a nonprofit organization headquartered in Washington, D.C., that collaborates with civil society around the world to analyze and influence public budgets in order to reduce poverty and improve the quality of governance.
Joel Friedman is a senior fellow with the IBP’s Open Budget Initiative and the vice president for fiscal policy with the Center on Budget & Policy Priorities, a D.C.-based nongovernmental public policy think tank.
Duong Thi Viet Anh is the managing director of CDI, which is a Vietnamese nongovernmental, nonprofit organization working for the rights of the disadvantaged groups to build a society of equity, solidarity, and sustainable development.
On December 12th of 2015, in the framework of the project “Enhancing transparency and people’s participation in managing the state budget”, the workshop Report on “The implementation of budget transparency, accountability and people’s participation in managing the state budget” survey was held in the Women Union office in Quang Tri with the support of Centre for Development and Integration (CDI). Representatives of Project Management Committee under the People's Council and Provincial Women Union, delegates from 2 departments of Hai Lang and Gio Linh districts with 6 towns and villages and project consultants attended the workshop.
In the workshop, delegates all discussed the survey results and also contributed several ideas. The report summarized both well-done and limited sides of implementing budget transparency management in the province based on the provisions of Vietnamese law and good international practices.
The survey was implemented in June of 2015 in 6 villages in the project’s area of Hai Lang and Gio Linh districts . The result was the important documentary input to design further activities for the Project. Moreover, this was the main base to track and assess the effectiveness of all activities throughout the Project.
On 12 Dec 2015, at the Youth Cultural House,1B Tang Bat Ho, the event “Budget Transparency in youth’s view”, a part of CSO pride 2015 was held by CDI, CECEM, ISEE and A4F. A chain of exciting activities was organizedto create a useful platform for young people to understand further about National Budget Law as well as to suggest ideas for effective actions in enforcingbudget transparency.
The opening activity was a knowledge game which attracted more than 60 young people to get involved. Besides, in the contest “Youth ideas for Budget Transparency”, young people had a chance to present their own ideas in front of the judge council who have rich experience in governance enforcement and national budget management. They are PhD. Bui Thi An – Congressman, Director of the Institute of Natural Resources, Environment and Community Development, Prof. Dang Hung Vo – Former Deputy Minister of Natural Resources and Environment, Mrs. Nguyen Thu Huong – Senior Program Coordinator of Oxfam and Mr. Hoang Tu Giang – Journalist from Saigon Times newspaper. The special prize was awarded to two young girls from Foreign Trade University with the idea of establishing an alternative organization for enforcing budget transparency process in national budget management.
Moreover, other young people coming to this event had a good chance to participate the workshop with judges in sharing methods of assessing information and enforcing budget transparency. From this workshop, they may have further understanding in budget transparency to build up ideas and contribute to the development of the country.
From 19/10/2015 to 21/10/2015, , the workshop “Review of the first 6 months and strategy building” of BTAP took place in Mai Chau, Hoa Binh with the participation of representatives from the Alliance’s members including CDI, ACDC, Oxfam and CEPEW; delegates from the People’s Committee and Farmers’ Association of Hoa Binh province and the People’s Committee of Quang Tri province. On the first day of the workshop, delegates from Hoa Binh and Quang Tri shared the results of implementing “enhancing transparency and the participation of the citizensin managing the state budget” project in the first 6 months. One of the most remarkable points of this workshop is applying evaluation form to select the mid-term public investment project in Quang Tri. Quang Tri Council of People shared “guideline of selecting mid-term public investment project in Quang Tri in the period of 2016 - 2020”. This document shows the details of criteria, selection process, mid-term public investment project evaluation and notes about applying to the reality. According to the plan, in the comingtime, Hoa Binh will take action in: (1) Consulting on allocation criteria and transparency in the implementation of vocational training programs and (2) Getting the public opinions about the budget allocation criteria of developing social investment to the villages.
Moreover, Hoa Binh and Quang Tri delegates gave straightforward sharings about the problems when implementing the plan such as information exchange and unification among members, the materials were not provided on time and the plan was changed frequently, which led to the passivity of time arrangement. The alliance members listened carefully and took a lesson in the upcoming time.
On the next two days, workshop concentrated on building an action strategy; Operation regulations and principles, operational coordination mechanism as well as the Action Plan of the Alliance for the period 2015-2016. At the end of the workshop, all the members of the alliance committed to build a strong alliance and make it a reliable channel of budget information for the citizensand community.
[September 05, 2015] The results of global survey about the Open Budget Index in 2015 (OBI2015) showed that 98 out of 102 countries have not reached the public system in the full budget. This lack of accountability system budget of many countries brings up challenges in the implementation of international commitments such as commitments on Sustainable Development Goals of the UN.
Global situation and comparisons between countries
Ninety-eight of 102 countries surveyed lack adequate systems for ensuring that public funds are used efficiently and effectively, according to the International Budget Partnership’s Open Budget Survey 2015. The report, the fifth of its kind, is the world’s only independent, comparative survey of budget transparency, citizen participation, and independent oversight institutions in the budgeting process. The 98 countries fall short on at least one of these pillars of accountability; 32 of these fall short on all three. The widespread lack of strong budget accountability systems poses a threat to the implementation of critical international agreements, such as the United Nations’ Sustainable Development Goals and the international agreement that is expected at the 2015 Paris Climate Conference.
“The public needs access to budget information and opportunities to participate throughout the budget process. Coupled with oversight by legislatures and audit institutions this contributes to a more accountable use of public money,” said Warren Krafchik, Executive Director of the International Budget Partnership. “A growing body of evidence indicates such budgetary checks and balances yield better outcomes for people, especially those who are poor or vulnerable.”
A mere 24 countries - less than one in four - score over 60 out of 100 on the Open Budget Index (OBI), the part of the survey that assesses transparency, and thus provide citizens with sufficient information to enable them to monitor the government’s use of public money. Alarmingly, the remaining 78 countries that provide insufficient budget information are home to 68% of the world’s population. Seventeen of these countries provide scant or no budget information to their citizens.
However, the study finds that budget transparency is generally improving - a finding consistent with previous reports. The average OBI score has increased to 45. Progress was particularly robust among some countries and regions that were previously not as transparent, including the Kyrgyz Republic (its OBI nearly tripled), Tunisia (its OBI effectively quadrupled), and Francophone West Africa.
Compounding the widespread lack of transparency that nonetheless remains is a similar lack of opportunities for public participation and oversight. With scores of 60 or less on this part of the survey, 95 of 102 countries fall short in providing opportunities for public participation. Further, the survey finds that legislative research and analytic capacity, as well as quality assurance systems in most national audit bodies, are lacking, severely compromising the ability of oversight institutions to be effective guardians of the public purse.
Results of Vietnam’s OBI survey
Open budget index of Vietnam announced for the year 2015 (OBI2015) is 18 points out of a total score of 100. This score level is almost unchanged compared with the assessment in 2012 (19 out of 100 points) and considerably lower more than the global average (45 points). This shows that the public is providedlittle information on the budget.
Compared with other countries in the region, the level of budget transparency of Vietnam is higher than China, Cambodia, Myanmar but lower than many other Southeast Asian countries like the Philippines, Indonesia, Malaysia and Thailand, in particular the Philippines the highest degree of transparencysignificantly better (65 points).
Score ratings of the three pillars of public budgets Vietnam have remarkable changes. The involvement of the public on budget issues gains 42/100 points and in limited degree. However, in this pillar, Vietnam ranked higher than the global average of 25 points and most countries in the region such as China, Thailand, Indonesia, Malaysia.
About pillars budgetary surveillance of legislatures and auditors, Vietnam is considered sufficient to point 61/100 ranking points for the legislature and 75/100 ranking points for agencies accountant. However the survey questions of Vietnam shows that supervision in the budget planning process is sufficient and in the process of implementing the budget is limited. The Legislative body includes the Finance and State Budget Committee and but does not have its own budget research and analyzing department as international best practices. The Legislature did not make decisions in the use of reserve funds which is not in the budget adopted by the National Assembly.
In the eight key budget documents should be made public, in OBI2015 period, Vietnam has announced the additional Budget Documents available to Citizens and increase the complexity of the budget report for the period (quarterly report). However, the draft budget has yet to be announced. Moreover, the interim report (6 months) has not been considered Interim report according to international rules because there is no quantitative information on macroeconomic forecasts and financial forecasts for the next stage of the budget period. The state audit report is released later than international regulations (no later than 18 months after the end of financial year).
The Open Budget Survey uses internationally accepted criteria developedby multilateral organizations such as the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), and the International Organisation of Supreme Audit Institutions (INTOSAI). It is a fact-based research instrument that assesses what occurs in practice through readily observable phenomena. The entire research process took approximately 18 months between March 2014 and September 2015 and involved about 300 experts in 102 countries. The Survey was revised somewhat from the 2012 version to reflct emerging developments in accepted good practice and to strengthen individual questions. A full discussion of these changes can be found in a technical note on the comparability of the Open Budget Index over time (see below).
Survey responses are typically supported by citations and comments. This may include a reference to a public document, an offial statement by the government, or comments from a face-to-face interview with a government offial or other knowledgeable party.
The Survey is compiled from a questionnaire completed for each country by independent budget experts who are not associated with the national government. Each country’s questionnaire is then independently reviewed by an anonymous expert who also has no association to government. In addition, IBP invites national governments to comment on the draft results from the Survey and considers these comments before fializing the Survey results.
See the full survey report for each period between 2006 and 2015 and the reports of 102 countries: www.openbudgetsurvey.org
To provide information to support for the activity “Planning for medium-term public investment” in the 2016-2020 period, Quang Tri province, a team led by the Economic-Budget Commission under the People’s Committee of Quang Tri province, with technical support by Professor Dang Hung Vo, Center for Development and Integration (CDI), non-governmental organizations in the budget transparency network (Oxfam, CECEM, ACDC, CEPEW, GPAR) has developed a set of criteria and processes to evaluate and select new investment projects at commune, district to provincial level under the method of preferential scoring. This is an activity within the framework of the project "Promoting transparency, accountability and the participation of people in managing the state budget" funded by the Delegation of the European Union (EC) and Oxfam.
The application of this tool is expected to help the authorities in Quang Tri Province understand the information relating to investment projects from the perspective of the needs and priorities of the people - those who will directly use and benefit from these works. Since then, the activities will help improve the efficiency in the use of investment projects as well as promoting openness and transparency and the participation of people in managing the state budget in Quang Tri province.
After the preparatory process from May 2015, in August 2015, in Quang Tri, the Economic - Budget Commission of the provincial People’s Committee has cooperated with the Centre for Development and Integration (CDI) to held the briefing at the villages, communes and districts in the province on the application of the evaluation process and the criteria for ranking list of the medium-term period public investment projects of 2016-2020. The specific application at the grassroot level in the province will also be implemented according to the plan right after the training session.
The following actions in the series of activities of the evaluation and selection process of medium-term investment list for 2016-2020 period in Quang Tri province to continue to consult the departments and unions of the province and experts are expected to take place in September and end in the first half of October 2015.
From 30 to 31 July 2015, the BTAP (Budget Transparency Accountability Participation) Coalition’s workshop on activitiy planning, an activity of the project "Promoting transparency and the participation of citizens in state budget management" funded by EC took place in Hanoi. The workshop aimed at planning the activities of the Coalition in 2015-2016 with participants including representatives of the coalition’s member organizations: Oxfam, CDI, ACDC, CEPEW; representatives of the People’s Committee and Women's Union of Quang Tri province; and representatives of the People’s Committee and Farmers’ Association of Hoa Binh province.
In the first meeting, the Coalition’s members have discussed and made operational initiatives for the Union in 2015-2016. The members presented 10 activity initiatives for the Coalition in the years after the first meeting, among which 5 initiatives are evaluated with the highest priority points are:
widespread practice of budget publicity and transparency process (provincial OBI)
clear budgeting process and relevant criteria. Budget allocations having the participation of the people
Apply information technology to information access and budget monitoring
Develop and publish a citizen budget
Supervise the work efficiency of projects after investment
During the 2nd day of work, the Coalition launched a detailed implementation plan for the five priority action initiatives in 2015-2016. In particular, activities related to the budget allocation process, citizen budget and efficient budget monitoring after investment were planned to be implemented in Hoa Binh and Quang Tri. The activities related to provincial OBI (Open Budget Index) and information technology for the Coalition were also planned in details by member organizations. Finally, members of the Coalition together unified a coordination mechanism in the Coalition to achieve the highest efficiency in order to strengthen the Coaliation as well as expanding the it in the future.
In 2013, five civil society organizations (CSOs) in Vietnam namely ACDC, Center for Development and Integration (CDI), CECEM, CEPEW formed Budget Transparency and Participation (BTAP) coalition. During 2014-2015, the coalition proposed recommendations for amendment of the State Budget Law to improve transparency, accountability and participatory in state budget management through various advocacy efforts.
On 25 June 2015, the National Assembly of Vietnam has approved the amended State Budget Law with some major amendments on mechanism that make budget open and enhance citizens’ participation in budget process. Provisions in the law states more clearly in article 15 that requires (1) budget documents to be published including executive budget proposal (both at national budget and local budget and It is indicated this document should include both the data and narratives contents); (2) in year report and 6 month report to be publish no later than 15 days of the following period (3) state audit’s report and corrective measures and results of corrective measures (no later than 30 days after its issuance). Article 15 also provides channel to publish budget documents including announcing at regular sessions/meetings; posting in office of relevant agencies; issuing publications; sending official notice to relevant organizations and individuals; publicizing on web pages; informing about through the mass media. Article 16 provides that people have right to monitor budget issues including performance of budget execution and openness of budget (article 16). Article 16 of the amended budget law also provides for mechanism of feedback from community.
While all these details, basing on recommendations of the five CSOs, are newly included in the law, they are creating an essential foundation for further steps to enhance the transparency, accountability and participatory approach in fiscal issues. Future plans of Vietnam BTAP network will include exercising right to access information of people on state budget issues such as feedback and comments using citizen budget documents and enhance people’s participation in budget monitoring including of public investment. Some further pilot of citizen budget will be implemented at local government and social accountability will be practice in wider scope in terms of monitoring budget spending at local level.
In September 2015, the Global Index on Open Budget Index will be luanched and this will be important benchmark index for Vietnam to compare with other good practice to enhance open budget in practice. Further support to BTAP coalition and CDI will be continued by International Budget Partnership.
On 12 May 2015, the Center for Development and Integration, the provincial People's Committee and the Women's Union of Quang Tri’s province have organized the launching workshop of the project "Promoting transparency and the participation of citizens in state budget management ". The project is financed by the European Union through Oxfam. Attending were Mr. Nguyen Duc Dung, Deputy Chairman of the provincial People's Committee.
The overall objective of this project is to increase transparency, accountability and participation of people in managing the state budget; namely empowerment of civil society organizations, community organizations locally to impact directly to the budget planning for the operation of the development and poverty reduction programme; and indirect impact on the relevant legal provisions.
A notable result of the project was that the People's Committees at commune to provincial level to create space for civil society organizations and community-based organizations to be involved in a practical way in the process of building the state budget and budget oversight of poverty reduction and development programmes, including health issues.
This project will be implemented for 3 years, from now until 2018 with a total budget funds 810,000 Euros for both Quang Tri, Hoa Binh province and the central agencies. The project’s goal is to raise awareness and participation in the activities of the project for over 6,000 women, the poor, ethnic minorities... The project was implemented by the implementing agencies such as the Center for Development and Integration (CDI); Center for Community Capacity Building (CECEM); Action Centre for Community Development (ACDC); People's Council of Quang Tri province and the Women's Union of Quang Tri province.
Speaking at the conference, Mr. Nguyen Duc Dung, Deputy Chairman of the provincial People's Council acquired the opinions requiring the Project Management Committee, the People's Committee and Women's Union at provincial and communal level to enhance accountability while performing the implementation in Gio Linh and Hai Lang district; and to have good staffing and time management to implement the proposed plan; mobilize local people to understand and support the project.
The effective implementation of the project will empower civil society organizations, community organizations to directly impact the budget estimations for the operation of programs to reduce poverty, development and indirect impact on the law and the relevant decrees.
On 15.04.2015, the sharing program "Taxpayers’ stories" was held in Hanoi.
Opening the program was the awards ceremony for the photo contest "Taxpayers’ view". The photo contest had been held on the Facebook group "Taxpayers” view photo contest" in six months from October 2014 to March 2015 to photos with content telling stories taking place at the localities concerning the state budget revenues and expenditures; using the budget; transparency of the budget at all levels; initiatives ensuring the participation of people in managing the budget, and effective budget management methods.
The contest received 351 photos by many authors with different ages and occupations in different regions across the country and reflects the multi-dimensional current situation in the use of the budget in many local budgets. The photos were recorded by individual devices of (cellphone, camera) and can help participants tell the stories about the use and management of budgets in many localities.
The contest’s first prize goes to "Who hears the taxpayers" by Truong Thanh Tung. The photo was shot on Kinh Duong Vuong street, Ho Chi Minh City, as a person wading through flooded streets with a slogan about listening to the taxpayers up above. The runner-up is “T2 Terminal - Noi Bai airport” by Nguyen Duc Thanh. The photo "On the same plane nothing in common" by Pham Kim Thoa won third prize. Many other outstanding works entered the finals were also displayed at the photo exhibition.
The program was followed by the presentation of solutions and initiatives to promote openness and transparency, accountability and participation of people in managing the state budget, which is funded by the European Union.
These are initiatives to concretize the recommendations that have been accepted in the new draft of the Law on budget amendments. These include:
- Ranking of the provinces in the publicity of state budget draft, based on the provisions of the Law on the content, form, and time of the publicity.
- Establish transparent budget model with the full participation of citizens in the budget process. Pilot publicity portfolio of public investment projects to be voted for prioritiy by the people, get the consent of people before approving the planned budget, and do Social Auditing for public services.
- Award "Youth accompanies the state budget" for small projects by youth groups carried out to increase the participation of the community, especially youth, to manage local budgets .
- Campaign TODOCABI of the youth to mobilize 100,000 people to be interested and supporting the process of amendment to update the budget law.
Ending the morning program was the talk "The participation of people in managing the budget" with the guests: member of Parliament Mr. Duong Trung Quoc; Prof. Dr. Dang Hung Vo; Mr. Nguyen Minh Tan, representative of Finance – Budget Department, Office of the National Assembly; participants coming from Quang Tri, Hoa Binh and representatives of Budget Transparency group. The guests presented many interesting and multi-dimenstional ideas, sharings and solutions that help enhance the participation of people in managing the budget.
The program was followed by constructive network discussion "Promote transparency and the participation of citizens in budget management" between civil society groups working on this issue in the afternoon.
On 12/30/2014, at Lakeside Hotel, Hanoi, the workshop on "Recommendations to revise the draft State Budget Law", organized by CDI and Mining Union, took place with the participation of representatives from various agencies interested in this topic.
The seminar aims to provide updates on amendment orientation of the draft State Budget Law from the last session of Congress, and provide additional information and evidence on the impact of transparency to effectively management and using of state budget.
Ms. Ngo Thi Minh Huong, Director of CDI held the opening speech. Followings were the presentation "The basic contents of the draft State Budget Law" from expert Pham Dinh Cuong, Ministry of Finance; and "Orientation for revision of the draft State Budget Law and contents need further consideration" from MA. Nguyen Minh Tan, Deputy Director, Department of Finance - Budget, Office of the National Assembly. After a heated discussion, the workshop continued with the presentation "The impact of publicity of state budget to effectiveness of management and use of the budget from mining - case study in Thai Nguyen," from Mr. Nguyen Dinh Hoa and "Management and use of state budget in the medical sector" from Mr. Tran Vu Hoang, representative of Medical Union.
The workshop ended successfully with many comments from different parties on the contents of publicity, transparency, accountability and participation of the people in the draft State Budget Law; at the same time also provided participants with multiple perspectives on the impact of transparency to effectively management and use of the budget in the various sectors of society.