Delegation and decentralization of powers must be accompanied by enhanced transparency to ensure effective management of loan capital utilization.

On the morning of November 3, continuing the 10th Session, the National Assembly held a plenary meeting to hear the Government’s Proposal and the Verification Report on the Draft Law amending and supplementing several articles of the Law on Public Debt Management.

The National Assembly’s Committee on Economic and Financial Affairs agreed on the necessity of amending and supplementing several articles of the Law on Public Debt Management in order to fully institutionalize the Party’s guidelines and orientations on restructuring and improving the organization of the political system, perfecting the legal framework, promoting decentralization and delegation of powers, ensuring consistency in institutional reform, and simultaneously addressing certain practical difficulties and obstacles that have arisen.

Presenting the Proposal on the Draft Law on Amendments and Supplements to a Number of Articles of the Law on Public Debt Management, Minister of Finance Nguyen Van Thang stated that the draft Law consists of three Articles. Among them, amendments and supplements are made to 23 out of 63 articles, including amendments and supplements to 17 articles, the repeal of certain provisions in 5 articles, and the addition of new provisions in 5 articles.

Enhancing proactivity and accountability of local authorities in budget decision-making and utilization.

To continue implementing the policy of decentralization and delegation of powers in line with the streamlining and restructuring of the state apparatus and improving governance efficiency, the draft Law stipulates the delegation of authority to the Prime Minister and the Ministry of Finance in several public debt management tasks, thereby enhancing the proactivity and self-responsibility of local authorities in budget decision-making and utilization.

Accordingly, the draft supplements and clarifies the tasks and powers of the President and the Government, and amends and supplements the powers and duties of the Prime Minister and the Ministry of Finance.

The draft Law also proposes to add provisions requiring ministries, provincial and municipal People’s Committees, state-owned enterprises (SOEs), and subsidiaries wholly owned by such SOEs to prepare proposals for Official Development Assistance (ODA) loans and concessional foreign loans to be submitted to the Ministry of Finance for assessment and to the Prime Minister for approval as a basis for carrying out investment procedures for programs and projects. The loan proposal information focuses on four key aspects of the proposed foreign loan and any letter of intent from the donor (if available), thereby reducing the amount of information that the governing body must provide at this stage.

At the same time, the draft adds a provision on the deadline for the Prime Minister to approve the annual public debt borrowing and repayment plan to ensure synchronization in the implementation of the State budget estimates, the public investment plan, and the annual borrowing and repayment plan once approved by competent authorities.

To address difficulties faced by public non-business units in providing collateral for on-lending portions of loans, and to institutionalize the policy of encouragement under Politburo Resolution No. 57, the Government proposes that the Law include a provision authorizing the Government to provide detailed guidance, serving as a basis for stipulating that no collateral shall be required for public science and technology organizations or public higher education institutions when re-borrowing ODA or concessional foreign loans from the Government.

Several provisions have been omitted to ensure consistency with the amended Law on State Budget, including the removal of provisions relating to the three-year public debt management program, the form of borrowing from the State financial reserve fund, and procedures for submitting to the Prime Minister for decision on borrowing from the State financial reserve fund.

Enhancing transparency and ensuring effective management of loan mobilization and utilization

The verification report presented by Phan Van Mai, Chairman of the National Assembly’s Committee on Economic and Financial Affairs, clearly states that the Committee agrees on the necessity of amending and supplementing certain articles of the Law on Public Debt Management in order to improve the organizational structure of the political system and the legal framework, and to promote decentralization and delegation of authority.

Regarding the scope of amendment, the Committee requested the drafting agency to focus its review on urgent issues, practical obstacles, and provisions that require revision to ensure consistency within the legal system.

For unclear matters with differing opinions or those lacking thorough impact assessment, further research and synthesis of practical implementation should be conducted for consideration in a comprehensive revision in the future.

The Committee generally agreed with the draft Law on amending and supplementing certain provisions related to the decentralization of authority for the Prime Minister to determine the annual limits on on-lending and Government guarantees, in connection with the approval of the Public Debt Borrowing and Repayment Plan, thereby helping shorten the approval process for these limits.

It also supported adding responsibilities to the Ministry of Finance to ensure flexibility in implementation and reduce administrative procedures.

The Committee requested the Government to continue reviewing to ensure that the decentralization and delegation of authority are accompanied by enhanced objectivity, transparency, and effective management of loan mobilization and utilization.

The Committee also concurred with the provision allowing public non-business units to access ODA loans and concessional foreign loans. However, it recommended careful consideration of provisions ensuring that the lending agencies are not exposed to credit risks, along with a thorough assessment of potential impacts and risks to ensure public debt safety.