RESULT REPORT ON SCIENTIFIC SEMINAR Vietnam Development Report 2010

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized NATIONAL ASSEMBLY S STANDING COMMITTEE LEGISLATIVE STUDIES INSTITUTE SOCIALIST REPUBLIC OF VIETNAM Independence Freedom - Happiness RESULT REPORT ON SCIENTIFIC SEMINAR Vietnam Development Report 2010 Hanoi, 20 th June Seminar Organization Context: The 7 th Meeting of the National Assembly Session XII is underway with ebullient discussions on various contents relating to socio-economic issues, especially institutionally-related ones. From actual service to National Assembly delegates before and after the 7 th Meeting of the National Assembly Session XII, there has been an increasing demand of information on the country s development issues such as economic and social ones, etc, especially on the State s operational and organizational reforms, modern institutions from the central level to local ones, legal system and supervision. The Vietnam Development Report 2010 was led by the World Bank in partnership with other donors for Vietnam, covering many issues relating to modern institutions such as the State apparatus, socio-economic situation, supervision works, etc. The report has been published and issued to directly serve the mid-term Consultative Group Meeting of donors for Vietnam (CG Meeting), which was held in Rach Gia district, Kien Giang province from 9 th to 10 th June The report was rich of information, covering multi-way views on modern institutions, especially in Vietnam s current context. With its function of scientific information supply and dissemination to National Assembly delegates, and with approval by the National Assembly s management, the Legislative Studies Institute has cooperated with the World Bank to organize the seminar for supplying highly valuable and updated scientific information to National Assembly delegates, so they could bring into full play of their roles and thought to perform their task for deciding the country s important issues. 2. Seminar Organization: Using the National Assembly s meeting break, the seminar was held in the Saturday afternoon on 12 th June 2010 in Hanoi. It was co-chaired by Ph.D Dinh Xuan Thao, the Director of National Assembly s Standing Committee s Legislative Studies Institute, and Madam Victoria Kwakwa, the World Bank s Country Director in Vietnam. Seminar participants also included Vice Directors of Legislative Studies Institute: Ph.D Le Thanh Van and Ph.D Hoang Van Tu, and more than 100 guests, of which there have been more than 40 National 1

2 Assembly delegates, who was joining the 7 th Meeting of National Assembly Session XII and representatives from National Assembly commissions, the National Assembly Office s divisions, ministries and central branches. In this seminar, participants have heard the presentation by Mr. James Anderson, a representative of Vietnam Development Report 2010 s author team, as well as some comments by senior experts on the report s main content: Prof. Dr. Tran Ngoc Duong, Prof. Dr. Nguyen Dinh Huong, Vice Prof. Dr. Dang Van Thanh; senior expert Pham Chi Lan and comments from some National Assembly delegates such as Prof. Dr. Nguyen Minh Thuyet, Vice Chairman of National Assembly s Culture, Education, and Teenage and Youth Commission, National Assembly delegate Nguyen Dinh Xuan, etc. 3. Seminar Content: After the presentation on the report s main content by Mr. James Anderson, World Bank s senior expert, Vietnamese experts have given out some their comments as follows: 3.1. Education * Prof. Ph.D. Nguyen Dinh Huong Legislative Studies Institute s senior expert commented: The report has recorded Vietnam s educational development with its limited budget. In spite of facing with many difficulties, the educational scale has developed, and reform trends have been arisen out to improve educational quality from pre-school education to higher education. Education is a direct public service for citizens and has been as a field to receive regular attention by both citizens and the Government. It was regret that the report has not covered much on educational institutions, and sometimes, combined education and healthcare fields at the same time, which, but, both need to be taken care for citizen s satisfaction and its development trend. Some shortcomings in educational institutions have been mentioned in the Resolution No. 35 of the National Assembly such as: pre-school education and 5-year-old educational popularization with current lacked and mattered training of pre-school teachers; primary and secondary education, enrolment and specialized educational classification and socialization; professional education and higher education with many needed discussions on models, quality, educational fields and systematic management with involvement by many ministries, braches and local businesses at the same time; and systematic management applicable to the entire educational field and international cooperation in the educational field when Vietnam joined WTO, etc Socio-Economic Situation 2

3 Prof. Ph.D. Dang Van Thanh Legislative Studies Institute s senior expert have mentioned some his comments: Having experienced more than 20 years of reforms and integration, the economy has gained many achievements and crosed over threshold of a underdeveloped country. Its economic structure has continued its shift in terms of sectors, regions and economic sectors in line with the country s industrialization and modernization and socialist-oriented market-based economic development. Macro economics has basically stable. Physical and spiritual life enjoyed by classes of citizens has been improved, and poor households have been reduced quickly. There have been social and cultural developments. Public security and social safety have been strengthened, which have contributed to improve political-social stability. External relations have been expanded, rising up the country s position and prestige in the international field, etc. However, many socio-economic weaknesses have still existed: the economy have not improved in qualitative terms, and faced low levels of competitiveness and efficiency, and unhealthy factors have been still available in the country s monetary and financial system. Social situation has still contained concerns, containing seeds of instability, especially rising downgrade in social rules and ethics, and increase of evils and crimes, weakness in effectiveness and efficiency in the State s management, and corruption, etc Institutions * Prof. Ph.D. Dang Van Thanh has also highly appreciated the report on its serious, well-prepared and quite rich content. It has not only helped us to have a comprehensive view on institutional theories and facts which have set up and developed in Vietnam after many-year reforms. The report also focused its presentation on devoluation, decentralization and accoutability, which have been as two aspects of modern institutions and as content, aspects and works on which Vietnam has quite drastically focused for the past twenty years. It has been right to state that devolution and decentralization have gained many benefits, promoting rapid, active and effective socio-economic development, but containing many negative consequences, among which included accountability and lack of regular and continuous inspection and supervision. It has anaylized and assessed that Vietnam s devolution and decentralization process has achieved many positive results: healthy competition among actors and localities, contributing to improved economic environment and considerabe increase of service quantity and quality when many economic sectors have been allowed for participation and socialization. However, the report also pointed out many shortcomings and negative consequences arising out from devolution and decentralization: that has been of local nature, disciplined nature, and indeliberate or deliberate break-down or violations of devolution-related limitations, not caring or causing harms to 3

4 general benefits as enjoyed by the country, regions or their friend localities. Accountability has not been at high and sufficient level, meanwhile postdevolution control and supervision have been relaxed. There have been insufficient diversification and low quality of govermentally-supplied services, as well as lack of information access and policy-caused effect assessment to benefit groups and social classes. It was true that after 16-year reforms, achieved results have still been at the modest level, which could be said that many objectives have not been achieved as expected. The State s administration apparatus has been simplified, but not of effective and efficient performance. Administrative procedures have been cut down, but occurring slowly and troublesomely. Serving quality, capacity and attitude by public servants have been much lower than required. There have still been available shortcomings in training methods, and recruitment and employment mechanism. National finance has been improved somehow, but its resources have been limited with weak potentials, unconcentrated allocation, and ineffective and uneconomic usage. Waste and illegal appropriation of national funds and assets have still occurred, although many measures have been conducted for prevention. National finance and the State s budget have been made public, but not really transparent. * Prof. Ph.D. Tran Ngoc Duong also agreed that it has been an useful report with its objective review and many meaningful comments for Vietnam s current continued institutional State reforms. He thought that administration reforms required synchronous reforms in all three areas: institutional reform, public servant and work reform, and administrative procedure reform. However, institutional reform, and public and work one have not corresponded to administrative procedure reform. Firstly, the extent of devolution and decentralization from the national government to provinces has been quite large. With new authority, the provinces has been, more so than in the past, able to align their mix of services with local desires. At the same time, the manner and degree of oversight have been strengthened. However, lower state agencies accountability through citizen participation and transparency required a change in culture, customs and thought that cannot achieved quickly, has gained some progress, but still contained many concerns. According to the report, downward accountability satisfying directly the people s aspiration through participation and increased transparency has been implemented at the commune level meanwhile almost powers have been assigned to the provincial level. Therefore, it has resulted in contradiction, causing difficulty for actual implementation. Secondly, competition among provinces did not always bring out benefit, decisions inside a province might cause important impacts on others, including both positive and negative ones. 4

5 Thirdly, devolution and decentralization in functional areas to for administrative non-productive agencies (service suppliers) have posed an unanswerable challenge that is how to both ensure autonomy in service supply autonomy and uniformity in service quality He also suggested re-consideration of devolution of authority to local levels. In his opinion, nowadays, devolution and decentralization have not been clearly distinguished. These issues has been different in nature. Devolution means that a job is assigned to all levels for their joint implementation, e.g all levels from the central government to provinces are allowed to allocate investment projects. Devolution is mainly made by the Government s rulemaking activities. By which, a shift from devolution to decentralization between the central government and local governments should be made. What issues falls within the competence of the Central government, what ones belongs to local government, and decentralization should be realized by legislative activities Judiciary Prof. Ph.D. Dang Van Thanh assessed that the report has emphasized the legal system s uniformity, stability and predictability as a tool to build up trust to investors, citizens and, even, law enforcers. He thought that separating lawmaking functions with law-drafting one would reduce risks and increase opportunities for exchange of basic law issues, which was valuable for consideration. It also stated that devolution and decentralization would result in increased workload for the judicial field, especially for courts. Disputes would be on rise and become complicated. The judiciary field should obtain its corresponding development, and harmonization among its independence and its accountability. Accountability should be improved without any harm to judicial activities independence. Legislative capacity should be rapidly strengthened to satisfy concerned requirements on increased quality and quantity of draft laws and codes for socialist-oriented multi-sector economic development. There should be available active solutions to continue improved legislative quality. Synchronous, uniform and sufficient system of legal documents should be built up. Legal documents content in the economic and financial field should origin from objective demands by economic and financial activities, from requirements from actual life and business activities, and ensure their scientific and feasible nature. Especially, policies as mentioned in draft laws for the economic field should be reflected clearly from its directive opinion in building up them. Supervision for law enforcement should be strengthened. Supervision should discover shortcomings and unrealistic issues as regulated by law draft s regulations and as reflected in law enforcement. 5

6 * Prof. Ph.D. Tran Ngoc Duong: improved drafting responsibility and further strongly and actually democratic actions in law and rule making should be made as an additional step to improve quality of law and rule making. The key challenge for legal reform would ensure that legal framework would be internally consistent, implementable and would be well understood by the public and by those who enforce it. A stable and predictable set of law could give firms the confidence they need to undertake costly investments. Meanwhile, firms generally would not report that economic and financial laws are predictable. Making laws more predictable would begin with publication of draft laws, but it would not end there. The next step would focus on consultation on draft laws and facilitate for debates. So, it should closely link law making function with technical drafting. To overcome dependence as occurred in the judicial activities, the report suggested, the judges role should be made clear as arbiters rather than participants in the case as today. At the same time, strengthening transparency in judicial activities by increased analysis before deciding on the case has been still very limited. According to Madam Pham Chi Lan Economic Expert: In general, Vietnam s legal system has still faced its lacked transparency, consistency, stability, accountability, feasibility and predictability. Normally, laws have depended on more detailed legal documents, even on administrative organ s official letters, for explanation and implementation guidance. A precaution trend was that, instead of issuing legal documents, organs have used more number of official letters, and there have been rapidly increasing official letters with their validity like issued legal normative documents Public Financial Management Madam Pham Chi Lan said that, in fact, both budgetary expenditures and collections have resulted in many concerns to the entire society, especially leakage and ineffective, wasteful and corrupt budgetary expenditures in both activities have occurred for a long time and seemed to be worst. Here was not only of limitations in related State organ s devolution of powers or accountability, but also of the role which has played by interest groups and large-scaled state-owned enterprises in the State s investments (as the largest part of budgetary expenditure) Human Resource Management Madam Pham Chi Lan said that the Report has highlighted brain leakage, staff employment, remuneration regime and motivation for staff encouragement 6

7 at the State s bodies. Such issues have actually occurred at almost State bodies and linked closely each other. It was alarming with the alone fact that basic salary that only accounts for 30% total of salary, bonus and allowance. It has reflected distorted, artificial and troublous income and treatment system at the State s organs, and which has become as both a cause and effects of a cumbersome, improfessional and ineffective administrative apparatus. In addition, she also added that the report s recommendations should refer to the hotter issue of the country s public asset and resource management. Since devolution and decentralization, the management of such resources has been scattered, loose and less effective. Vietnam s sustainable development and socioeconomic stability could be threatened by uncontrolled exploitation of natural resources, which could result in their exhaustion, in case of unavailable development for processing industry, waste of land, including farming land, seriously environmental pollution, and falls of rights and benefits into someone s hands Corruption Prof. Tran Ngoc Duong agreed with the report s comment that he thought has been valuable and pointed out the nature of Vietnam s corruption. It was corruption is posing less of an obstacle for their operation, but the magnitude of bribes as a percentage of revenues, is not declining. In other side, he stated that inspection only helped the heads for better management, not as an anticorruption tool. The police and control units that was the best tools for anticorruption, but has not been highly appreciated in the Law on corruption prevention and fighting. 4. Seminar Conclusions and Recommendations The concluding speeches made by the co-chairman, Ph.D Dinh Xuan Thao, Legislative Studies Institute s Director, and Madam Victoria Kwakwa, World Bank s Country Director in Vietnam have agreed that presentations and comments by experts, participants and economists as their contributions to Vietnam Development Report 2010 have recorded Vietnam s achievements for the past 20 years of reforms. They have been, in details, developments in education-training, administration reforms and socio-economic situation, etc. However, on its development trend, Vietnam could not avoid to face with market-based economy s detects; and difficulties and challenges in its integration. It is important that Vietnam should find its own suitable way, increasing completion of its institutions and laws; maintaining its administration to be clean, healthy, etc. If such objectives are realized and such detects could be limited at the same time, Vietnam is likely to overcome crisis and gain its increasingly strong development with its potentials and actual powers. 7

8 In addition, National Assembly delegates and guests also said that seminars and conferences with the purpose of information supply and exchange was very useful and bring valuable multi-way information. Both co-chairmen and participants also noted that continued close cooperation between the Legislative Studies Institute and the World Bank is needed to organize such events./. 8