Amendment of the Law on public debt management: Attaching the responsibility of explaining with allocating and using public debt

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Mr. Tran Xuan Ha, Deputy Minister delivered a speech at the seminar

Speaking at the seminar, Mr. Nguyen DucHai, Chairman of the Finance and Budget Committee said: the current Law on Public Debt Management which was approved by the National Assembly at the 5th session of the 12th National Assembly has become an important legal basis for public debt management frameworks.

The Public Debt Management Law does not only provide definitions with uniformity of public debt, government debt,guaranteed government debt, local government debt, and even national external debt but alsooffersthe principles of public debt management, which states that the State will comprehensively manage the public debt, from mobilization, allocation and use of loans to the repayment of debt ...

However, the legal frameworks for public debt management still have some limitations and inadequacies. Although there is a Law on Public Debt Management which stipulates that the Government will be responsible for unifying the State management of public debt, it does not stipulate a unified and specialized debt management agency under the Government.

The provisions on the functions and authorities of relevant agencies such as the Ministry of Finance, the Ministry of Planning and Investment, the State Bank, local authorities, show that the authority to borrow, repay, and manage the debt is still generally fragmented in different ministries and agencies, thus leading to difficulties in debt management in an unified way, as well as the imputability of relevant agencies.

"In essence,public debt management is the national debt, which, in the end, is the debt of the people. When Vietnam graduates from the IDA (World Bank) in 2017-2018, it is time to be mentally prepared to enter the period of access, to mobilize higher level loans with harsh conditions. Therefore, it requires careful consideration and calculation of borrowing and more importantly the management of public debt must be strict and efficient, "Mr.Hai said.

Sharing about the process of drafting the Law on Public Debt Management (revised), Deputy Minister of Finance Mr. Tran Xuan Ha said: from early 2015, the Ministry of Finance has actively carried out the assessment and summary of implementation of the current law. In addition, the Ministry of Finance has consulted international experts from WB, IMF and independent national experts on experience in public debt management through technical assistance activities and international conferences.

By now, the Ministry of Finance has finalized a file on the on Public Debt Management Project (revised) and finalized the final steps to submit to the Government for comments before submitting to the Standing Committee and National Assembly at the3rd session (May 2017) and passingat the4th session by the end of 2017.

According to the Deputy Minister, the aim of the Ministry of Finance in this draft is to improve the management policy, creating a synchronized legal basis between public debt management and budget and public investment management; to adequately and promptly mobilize capital for investment in socio-economic development while ensuring safety, sustainabilitydebt and national financial security; to improve the efficiency of loan utilization; to facilitate the implementation of active debt management.

Besides, it helps to define the functions, tasks and authorities of agencies in the public debt management; to attach theexplaining responsibility based on assigned functions and duties in all stages from mobilization, allocation, use,management and debt repayment; to selectively approach good international practices in line with the practical conditions of Vietnam in order to bring public debt management activities of Vietnam to be close to international practices.

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At the seminar, national and international experts with experiences in public debt management, representatives of some ministries, sectors and localities which directly managing and using public debt discussed the important contents in the draft on the scope of public debt; adjust the functions and mandates of the agencies in borrowing, allocating, use and repaying debt; issues in public debt planning, public debt strategies and risk management; the public debt monitoring, enhancing the explaining responsibility of agencies involved in public debt management.

The comments received at this seminar will be accepted by the Ministry of Finance for inclusion in the draft law submitted to the Government.