Need to be flexible in receiving foreign aid capital

In an interview with TBTCVN, Mr. Pham Quang Tu – Deputy Country Director of Oxfam in Vietnam said that a rigid framework should not be imposed but should be flexible in formulating estimates of foreign aid as a source of revenue. State budget.

ODA capital has made an important contribution to infrastructure investment, promoting socio-economic development. Thus, localities will also be easier to apply and foreign organizations will also find it more convenient to carry out procedures for central and local governments. Reporter: The Ministry of Finance is soliciting public comments on the draft circular guiding the state financial management of foreign non-refundable aid as part of state budget revenue. From some facts about receiving foreign aid from the localities where Oxfam has provided aid, do you have any comments on the development of this circular? Mr. Pham Quang Tu: Faced with the fact that many localities are still confused in guiding the implementation of legal documents related to the receipt of foreign aid, I highly appreciate the fact that the Ministry of Finance has actively developed this circular to guide guidelines on financial management of foreign aid under the state budget in three different decrees, namely Decree 56 on ODA aid, Decree 80 on non-ODA aid and Decree 50 on emergency relief and disaster recovery. Mr. Pham Quang Tu An example in the implementation of Oxfam’s projects is the flood emergency relief program in Central 2020. The understanding and application of this fund by local governments are different. For Quang Tri and Quang Nam provinces, they immediately identified Oxfam’s support capital under the implementation guidelines of Decree 50. While Ha Tinh and Quang Binh have concerns about applying Decree 80 or Decree 50. From that example, it can be seen that, the same source of foreign funding, whether it is from the state budget or not from the budget, but with different sources being adjusted under different regulations, localities have different interpretations. , so there is confusion in how to apply the appropriate regulations, leading to many aid sources not being implemented in a timely and rapid manner compared to needs. If this situation continues, it may lead to us not being able to take full advantage of foreign aid sources, causing donors to move to another locality or to another country, which is a pity. Therefore, when the Ministry of Finance issues a common guideline for all 3 Decrees for sources under state budget management, it will create a synchronism as well as make it easy to understand for aid-receiving organizations. A good idea, worth noting. I hope that the guidance of this circular will help local governments better understand how to approve and implement projects to avoid overlap. Reporter: This new draft circular has specific regulations on the construction of foreign aid capital estimates. What is your view on this matter? Mr. Pham Quang Tu: In my opinion, the construction of an estimate is common and necessary when following a general financial management process, including: estimation, expenditure, and finalization, but it is necessary to calculate which type is appropriate. The draft circular contains provisions on annual, 3-year and 5-year financial planning for foreign aid sources under the state budget. However, out of the three sources of ODA, non-ODA aid, and emergency aid, it seems that only ODA can be identified in the long term and thus 5-year financial planning is almost exclusively applicable to this resource. As for the other two types of capital, it will be difficult to make a 5-year plan. Even if there is a plan, the practicality and feasibility are not high, especially for emergency relief according to Decree 50, it is even less planned, because it is only determined when natural disasters occur. Therefore, using a common estimation model for all three types of capital sources will lead to stereotypes, rigidity and impracticability. Figures 3 years and 5 years are only forecasts, so the error in planning for 3 years and 5 years will be more, until implementation will have to be adjusted a lot. Therefore, when implementing, it is necessary to create flexibility in adjusting compared to the plan without having to create too strict requirements, avoiding asking for up, down and approval many times. In my opinion, for investment aid, the planning should be applied on a 3-year, 5-year cycle. As for the source of emergency relief, it should be flexible and should ensure prompt approval so that it can be implemented due to its emergency nature of relief. Reporter: From the perspective of organizations providing foreign aid to Vietnam, what recommendations do you have for this draft decree? Mr. Pham Quang Tu: First of all, as discussed above, I think that planning needs to be more flexible, not rigid, most importantly, it is necessary to focus more on the process of controlling expenses and payment. In addition, in my opinion, Clause 2 of Article 2 should be removed in the draft circular on the subject of application being “agencies in charge of foreign aid programs/projects/non-projects”. The reason is that the governing body is not the one to directly manage and use the aid. For example, if the Department of Agriculture of Province A is the grant holder/project owner, the Provincial People’s Committee is the governing body. In this case, the Provincial People’s Committee is only the competent authority to approve and allow the department to receive this aid, but the funding will be transferred to the account and managed by the Department of Agriculture. With the regulation that the governing body is the subject of the circular, it means that the Provincial People’s Committee must perform all the contents that the project owner, the Department of Agriculture, must do. This is an unrealistic and formal regulation because the Provincial People’s Committee does not manage money but only receives reports from the Department of Agriculture. The Department of Agriculture is a state agency and a legal entity, when directly the project owner will have to take full responsibility and if there are errors in the implementation process, they must be responsible before the law and authorities. on. PV: Thank you sir! Proposing the Government to develop a joint decree “In foreign aid, there are two types: state budget (state budget) and non-state budget. Therefore, to ensure uniformity, we suggest that, through the development of this circular, the Ministry of Finance can summarize and advise and propose the Government to develop a common decree, guiding the entire the process of calling for the receipt, management and use of foreign grants. In that joint decree, it will divide into two branches of budgetary and non-budgetary sources, including all from ODA, non-ODA and emergency relief sources. This will ensure synchronization…”
Mr. Pham Quang Tu – Deputy Country Director of Oxfam in Vietnam