Download Ensuring consistency between plans, sector strategies and budgets

Ensure the consistency between
sectoral plan, strategy and budget
PRSP Forum, April 2006
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Introduction
 Vietnam has developed and announced its
CPRGS.
Affirming Vietnam’s commitments in
mainstreaming poverty reduction in
economic development.
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1.
The relationship between the Ten-year
Development Strategy, CPRGS and
Development Plans
1.1. Relationship chart:
Ten-year Development
Strategy
Five-year Plan
National Targeted
Program
CPRGS
Public Investment
Program
Annual Plan
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1.2 Ten-year Development Plan 2001-2010
The Vietnamese government has developed its ten-year socioeconomic development strategy 2001-2010:

Strategy on people’ s health;

National strategy on clean water and rural environment hygiene;

National strategy on reproductive health;

Strategy on Vietnam’s population;

National strategy on nutrition;

Master program on public administration reform;

National strategy on Vietnam’s women progress to 2010;

Strategies in education, science and technology and environment
protection 2001-2010;

…
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1.3 Elaborating strategic goals of CPRGS in the fiveyear and annual plans for implementation.
 The Five-year Plan for the whole national economy is
developed by MPI based on the overall socio-economic
development strategy, development strategy of sectors and
fields with close cooperation of Central Ministries and
agencies.
 The Five-year Plan has received various opinions from
Ministries, sectors, donors, international organizations and the
public.
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1.4 Develop National Targeted Programs to
concentrate resources on important goals,
especially poverty reduction.
Program on population and family planning;

Program on poverty reduction and employment;

Program on clean water and rural environment
hygiene;

Program on the control and prevention of some social
diseases, dangerous epidemics and HIV/AIDS;

Cultural Program;

Education and Training Program;

Anti-crime Program.
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 Programs supporting people in escaping
from poverty :

Program on socio-economic development in
disadvantaged, mountainous and remote areas;

Support program on eliminating
classrooms and building houses;

Support program on building houses for ethnic
minority people, poor people in Central
Highlands, mountainous areas, Mekong River
Delta, etc.
cottage
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1.5 Public Investment Program is part of the Fiveyear Plan.
 Public Investment Program is the State’s
Investment Program consisting of investment
projects within the state plan and funded by
the state budget or credit.
 Main objective of the Public Investment Plan
is to build economic and social infrastructure
to facilitate organizations, individuals inside
and outside the country in expanding
production, business and eliminating poverty.
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2. State budget is linked to socio-economic
development plan aiming at economic growth and
poverty reduction
 Vietnam’s main plans are the socio-economic
development plan and annual budget plan.
 Budget plan is developed based on socio-economic
development targets identified in the socio-economic
development plan.
2.1 Estimate revenue based on projections for economic
growth (GDP), price indices, related targets; legal
regulations on state budget revenue.
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2.2 Estimating annual state budget
expenditure in implementing the proposed
socio-economic targets.
 Allocate
the annual state budget towards the
direction of:

Development objectives of each sector and field;

Allocating budget for prioritized poverty reduction, national
target programs and projects contributing to the
restructure and reform of economic structure;

Focusing on the relationship between the construction of
new investment works and maintenance costs;

Prioritize education, training, vocational training, science
and technology, healthcare and environment protection;

Prioritizing national key construction works, socioeconomic infrastructure to create a favorable investment
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environment to attract capital.
2.3 Developing criteria in budget allocation
 Developing criteria and levels in allocating the state budget for
development investment activities in line with general objectives
and orientations;
 Objectives by sector and region are specified in the socio-
economic development strategy 2001-2010, five-year plan
2006-2010, planning, development orientations by sector and
field approved by the state and the annual plan.
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2.3 Developing criteria in budget allocation (cont’d)
 Increase in expenditure on development investment compared
to the total budget expenditure has to be higher than the
increase in regular expenditure and development investment
expenditure of the previous year
 Ensure the reasonable balance between
investment in
economic infrastructure and investment in social infrastructure.
 Prioritize
building infrastructure for socio-economic
development in poor regions, narrowing the gap between poor
regions and developed ones, focusing investment in focal
economic regions and centers.
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2.3 Developing criteria in budget allocation (con’t)
 Ensure sufficient capital to implement programs and
investment projects within the state budget.
In line with the general criteria in budget allocation, MPI
is now developing specific criteria in allocating
investment capital to support localities.
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3. Achievements
 Vietnam
has made significant achievements in
implementing
socio-economic
development
objectives 2001-2005:
All objectives in the five-year plan are met, some even
exceed the targets:

GDP of the following year is higher than that of the previous
year, GDP in 2005 reached 8.4%, the average growth rate
of the five-year period is 7.5% reaching the targets.

State budget revenue/GDP equals 23.8% (the target is 2021%). The total budget revenue in the five-year period
reaches 18.3% on average, higher than the economic
growth rate combined with price increase. Financial
resources have been ensured to implement important socioeconomic development objectives and efficient economic
restructuring.
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3. Achievements (cont’d)
 Total budget expenditure increases 18.3% on average, in
which expenditure on development investment accounts
for nearly 30% of the total budget expenditure, equivalent
to 8.5% of GDP.
 Expenditure on education and training increased from 15%
of the total budget expenditure in 2000 to 19% in 2005.
 Expenditure on health care, culture and social activities
increased 2.2-2.5 times compared to 2000.
 The percentage of poor households all over the country
decreased from 17.5% in 2001 to 7% in 2005. The average
decrease in the number of poor households is by 2-2.5%,
equivalent to 300-310 thousand households.
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Conclusion
 The process of designing socio-economic development plan
has had many reforms specifying the objectives mentioned in
the socio-economic development strategy in the five-year and
annual plans.
 However, the socio-economic criteria for some sectors and
fields are not suitable to resource capacity
implementation process still faces difficulties.
so
the
 Vietnam is piloting with making medium-term financial and
expenditure plans within the framework of the Public
Administration Project to be applied when possible to all
sectors, fields and localities.
 In the near future, Vietnam will improve the quality of making
socio-economic development plan, of developing the state
budget estimate and of linking more tightly the socioeconomic development plan with the state budget estimate.
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Thank you!
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