On the morning of August 30, in Ha Noi, Deputy Minister of Finance, Ta Anh Tuan had a working session with the Technical Assistance Delegation on public debt management institutions of the World Bank (WB) and the International Monetary Fund (IMF). Attending the meeting were also representatives of several departments of the Ministry of Finance, and experts of the IMF and the WB.
Deputy Minister Ta Anh Tuan spoke at the meeting
According to experts of the IMF and WB, since the 2017 Law on Public Debt Management was promulgated, Viet Nam has made considerable progress in public debt management. However, Viet Nam's public debt management still faces many challenges. Current debt management strategies and plans mainly focus on debt safety indicators and do not provide enough guidance for public debt management regarding loan and risk management. The involvement of many departments of the Ministry of Finance in public debt management complicates information and communication with market participants. Debt reporting also confronts challenges in terms of coverage, timeliness, and a lack of analysis. The management of contingent liabilities is still fragmented and needs further improvement, etc. Therefore, building a unified DMO will help better address existing and emerging challenges. Experts suggested that the Ministry of Finance may establish a DMO, which is a relatively simple model, easy to manage and operate once the Law is promulgated. The model has budgeting and planning functions, as well as policy implementation functions, especially short-term market development functions. Non-public debt management tasks will be transferred to other departments that are better able to handle such tasks, or the DMO can be established as a General Department under the Ministry of Finance which is similar to the model of the State Treasury, etc.
Speaking at the meeting, Deputy Minister Ta Anh Tuan highly appreciated the cooperation and support experts from the IMF and WB extended to the Ministry of Finance, especially in successfully organizing seminars on international experience, and recent good practices in public debt management.
The Deputy Minister said that international experiences in public debt management as well as the recommendations of experts are very meaningful in the process of reforming public debt management in Viet Nam in the upcoming period. The international recommendations create a basis for the Ministry of Finance to study and develop policies, tools, and public debt management apparatus to ensure compliance with regulations; conduct innovative research, and improve the effectiveness and efficiency of public debt management agencies.
According to the Deputy Minister, depending on the institutional framework of each country, there will be different debt management models (DMOs). Each DMO model has different advantages and disadvantages. According to the Deputy Minister, what matters most is the full implementation of debt management functions in the DMO, whether in the form of a General Department or Department.
Expert representatives of IMF and WB at the meeting
The Deputy Minister also frankly said that, in Vietnam, public debt management at the government level is still scattered among ministries; and even within the Ministry of Finance is still scattered. However, public debt management is a critical issue that requires reform and may raise many different opinions on the reform.
“We understand that having a relatively independent and specialized public debt management agency as proposed by the Technical Assistance Delegations of the IMF and WB is a major issue, requiring high political will. In order to implement reforms, it is necessary to take smart steps, have tactics and strategies.” - Deputy Minister said.
Upon the agreement with the proposals of the Technical Assistance Delegation on the organization of a specific work program, the Deputy Minister suggested that the two sides continue working and should have a communication plan to raise awareness of the importance of public debt management reform among all levels and sectors, etc.