Vietnam aims to enhance debt management through international partnerships
The World Bank's 2024 Debt Management Performance Assessment (DeMPA) for Vietnam has commended the country's strong performance in managing public debt. The assessment, led by lead debt specialist Lars Jessen, provides key findings and recommendations on Vietnam's public debt management practices.
Key Findings
The report highlights several strengths in Vietnam's public debt management. The legal framework for public debt management has seen significant improvements since the introduction of the Public Debt Management Law in 2017. The 2017 Law on Public Debt Management and subsequent internal procedures have enhanced management practices, with strong coordination among relevant agencies and a sufficient capacity among staff to manage public debt effectively.
Vietnam's debt management strategy is of high quality, with clear objectives and borrowing purposes defined in legal documents. Key debt data is published regularly, ensuring transparency and accountability. The State Audit Office conducts annual financial and compliance audits, which are reported to the National Assembly, ensuring effective oversight and accountability. Vietnam demonstrates strong alignment between fiscal and monetary policies, which supports stable and effective debt management practices.
Areas for Improvement
While the report highlights several strengths, it also identifies areas where Vietnam can enhance its public debt management practices. These typically include ongoing assessments and improvements to ensure that the current strategies remain aligned with international best practices. Specific recommendations for improvement are not detailed in the available information.
Future Collaborations
The World Bank emphasizes the importance of ongoing collaboration with Vietnam's Ministry of Finance and other relevant agencies to enhance public debt management capacities. This collaboration aims to support Vietnam in maintaining and improving its debt management practices over time.
Looking Ahead
The plan for borrowing and paying public debt has been outlined for the years up to 2026 in Vietnam. The World Bank suggests establishing a single, dedicated debt management agency in Vietnam to further strengthen its public debt management capacities. The DeMPA aims to strengthen capacity and institutions for sustainable debt management.
Lars Jessen, the lead debt specialist for the DeMPA, will share international experience and provide consultation on improving public debt management. Vietnam is currently revising its regulations on public debt management to align with international best practices.
Deputy Minister of Finance Tran Quoc Phuong welcomed the DeMPA delegation at the ministry's headquarters in Hanoi on July 22. Phuong also mentioned that mobilizing and effectively using public debt resources is crucial, and a deficit is forecasted for the full year of 2024 in Vietnam's public debt. However, public debt in Vietnam is expected to stay within the permissible limit for 2024.
The budget landscape for this year in Vietnam has been finalized, and a significant state budget surplus has been recorded in the first nine months of 2024. The DeMPA uses a comprehensive set of indicators to evaluate how effectively a country manages its public debt. Diverse sources of loans are in the pipeline for Vietnam.
In conclusion, the DeMPA assessment provides a positive outlook on Vietnam's public debt management practices, with a focus on maintaining and further refining these strategies in line with international standards. The World Bank's recommendations and continued collaboration will undoubtedly help Vietnam to achieve its goals in sustainable public debt management.
[1] World Bank. (2024). Vietnam Public Debt Management Performance Assessment (DeMPA). [Online]. Available: https://www.worldbank.org/en/country/vietnam/publication/vietnam-public-debt-management-performance-assessment-dempa [2] VietnamNet Bridge. (2024). Vietnam's Public Debt Management Praised by World Bank. [Online]. Available: https://vietnamnet.vn/en/business/vietnams-public-debt-management-praised-by-world-bank-724810.html [3] Reuters. (2024). Vietnam's Public Debt Management Gets Positive Review from World Bank. [Online]. Available: https://www.reuters.com/business/finance/vietnams-public-debt-management-gets-positive-review-world-bank-2024-07-22/
- The World Bank's report on Vietnam's public debt management commends the country's strong business strategies in managing public debt, particularly in aligning fiscal and monetary policies, which supports stable and effective finance practices.
- In the future, the World Bank recommends establishing a dedicated debt management agency to further strengthen Vietnam's finance capacities and align its practices with international best practices, as part of Vietnam's ongoing business collaborations with the World Bank.
