Financial Reform - A Useful Measure to Fight Corruption

In any country, loss and waste result from problems in public financial policies. The main reason is non-transparent expenditure and financial management, which create favourable conditions for corruption.

 

Under the Anti-Corruption Law of Vietnam, corrupt behaviour occurs when those who have titles and powers abuse these for their own benefit. Corruption is hidden in the form of complicated behaviour, so the Party and State of Vietnam consider it a serious problem, which needs various preventive and punitive measures.

 

In late 2006, the third plenum of the Central Committee of the Communist Party of Vietnam issued the fourth Resolution on promoting the Party’s leadership in preventing and combating corruption and waste. This was the first time the Party Central Committee issued a separate resolution on the issue, which points out basic preventive measures, among which, education and dissemination should be promoted for cadres and officials, and people should improve their awareness of prevention and fighting against corruption and waste.

 

The Government, in turn, has taken measures to fight corruption over the past years. One of the measures is the adoption of the Anti-corruption Law by the National Assembly. Concretely, a programme of action, the peak of which was comprehensive administrative reform for 2001-2010, has been implemented. Under the programme, the reform of public finance, one of four main contents, has been implemented nationwide. Initial results have been seen with financial and budgetary decentralisation.

 

An outstanding feature of administrative reform of public finance, as a focus in 2006, is tough actions of the State administrative agency. In 2006, the Prime Minister issued documents, asking ministries, agencies and localities to take concrete measures to promote administrative reform, thus creating change for the better in relationships between State agencies, people, and enterprises. These include Decision N⁰ 22/2006/QD-TTg dated January 24, 2006 on the settlement of complaints and petitions of individuals, organisations and enterprises about administrative procedures, Directive N⁰ 10/2006/CT-TTg dated March 21, 2006 on reducing administrative documents on activities of State administrative agencies and Directive N⁰ 32/2006/CT-TTg dated September 7, 2006 on urgent measures of administrative discipline and ordering the settlement of problems between people and enterprises.

 

The financial mechanism for organisations within the State administrative system has initially changed, with positive results for personnel, administrative management and financial mechanisms for income-earning administrative units. Many ministries and agencies have implemented a lump sum mechanism for personnel and administrative management. The mechanism gives power and responsibility to agencies in the organisation, helping them practice thrift and create favourable conditions for staff members to supervise the implementation of mechanisms.

 

Thanks to the programme of action, transparency and publicity, public finance has made a contribution to the prevention of and fight against embezzlement and corruption of officials, who abuse their powers for their own benefits, such as the using agencies’ vehicles for private trips, using State-owned buildings for their own business purposes or overspending State budget money on buying equipment. The fact that many cases of the kind were brought to light in 2006 proves a certain change in this fierce combat. An exemplary case, of power abuse for individual benefits and the use of agency vehicles at Project Management Unit 18 (PMU 18), was brought to light and PMU 18’s officials were arrested.

 

Vietnam’s improvement of the effectiveness of public financial management has interested not only Vietnamese leaders, but also leaders of other countries and international organisations. During the 2006 APEC Summit in Hanoi in late November, Vietnam’s APEC reform initiative received a positive response from leaders of other economies. Also, Vietnam has become the first country to pilot the reform programme of the United Nations. Kemal Devis, head of the United Nations Development Programme (UNDP) and third most important person in the United Nations, said the programme encouraged United Nations agencies to share offices, vehicles, budgets and action plans.

 

Looking back one year, not a long time for a nationwide movement, it is clear that the biggest success in Vietnam’s administrative reform with a focus on public finance, is building up the trust of Vietnamese and foreign investors. This can be seen via commitments of foreign investment with US$10.2 billion attracted, and commitments on aid of US$ 4.45 billion, in 2006. The figures were record highs. This implies investors are more confident in the Vietnamese investment and business environment, which has become more transparent and stable.

 

Under the Anti-corruption Law, corruption is defined as such behaviours as embezzlement of public poverty; bribe taking; power and title abuse for public property speculation; power abuse on duty; power abuse to influence other people to gain individual benefits; bribe offering and intermediary by officials to settle work of agencies, organisations and localities; title and power abuse in misusing public property; trouble making; task and duty implementation refusal; title and power abuse to defend those who violate the law or illegal interference into examination, inspection, auditing, investigation, prosecution, judgment and judgment execution.