Analysis of the characteristics of public financial management; comparison and application of public financial management in the state management of thuy nguyen district, hai phong city

UPPSALA UNIVERSITÉT&
VNU UNIVERSITY OF ECONOM ICS & BUSINESS
UPPSALA
uu UNIVERSITET

--------------------- * * * ---------------------

MASTER THESIS OF MPPM

Anaỉysỉs of the characterỉstics of publỉc íìnancial
management; comparỉson and applỉcatỉon of publỉc
íinancial management ỉn the State Management of Thuy
Nguyen District, Hai Phong City

Author:

Bùi A nh T uấn

Supervisor:

P hD .H an s B lom kvist

LocalSupervisor: P hD .N guyễn Phú Hà
Class:

M P P M IN T A K E 7
ĐẠI HỌC QUỐC GIA HẢ NỌl
TRUNG TẦM
THÒNG
TIN THƯ----V»ÊN
_________

____—
------------rm

H anoi, Jan u ary - 201$

Ơ ĨD 5 { C T O J iũ ^


ACKNOVVLEDGEM ENT
I woulđ like to sincerely thank District party committee o f Thuy Nguyen
District People’s Committee for granting me a great opportunity to participate in
Master Program o f Public Management which jointly trained by ưppsala University
o f Sweden and University o f Economics and Business - Vietnam National
University; I am also deeply indebted to Dr. Hans Blomkvist from Uppsala
University (Svveden) and Dr. Nguyen Phu Ha from ưniversity o f Economics and
Business - Vietnam National ưniversity for their enthusiastic supports and valuable
suggestions during the study and completion o f this thesis.
I gratefully acknovvledge the experts and leaders o f Thuy Nguyen district,
district and commune departments, leaders o f enterprises who supported me in the
process o f conducting research, survey and verification o f infomiation, as well as
readily gave their time for joining the interview and provided me with necessary
information to íuỉlìll alỉ the steps o fth e thesis.
My deep gratitude to Uppsala University (Sweden) and University o f
Economics and Business - Vietnam National University and protessors o f the
Master Program o f Public Management Council for giving me a chance to prescnt
this thesis and I would appreciate your comments that will hclp ĩurther improve my
thesis.
Respectfully,

Bùi Anh Tuấn

ABSTRACT
Title:A N A LY SIS OF THE CHA RACTERISTICS 0 F PUBLIC FINANCIAL
M ANAGEM ENT,

COM PARISON

AND

APPLICATION

OF

PUBLIC

FINANCIAL M A NAG EM EN T IN THE STATE MANAGEMENT OF THƯY
NGUYEN DISTRICT, HAI PHONG CITY
Level: Finalassignm entfor M aster Program inPublic Management.
Authors: Bùi Anh Tuấn
Sweden Supervisor: PhD.Hans Blomkvist
LocalSupervisor: PhD.Nguyễn Phú Hà
Time o f completion: December 2014
O bjective:This research aims to improve the aggregate íìscal discipline, allocative
efficiency and operational efíìciency on the basis o f enhanced transparency,
accountability, predictability and participation in public íìnancial management o f
Thuy Nguyen district, Hai Phong City.
Methodology:
Based on the theoretical framework for good govemance associated with the
objectives o f public iìnancial managem ent, the thesis mainly used secondary data

obtained from the docum ents reílecting the results o f the State budget expenditure
in Thuy Nguyen district in 3 years from 2011 to 2013, compared with plan
assigned to see the strengths and vveaknesses in the State budget expcnditure
managemcnt in Thuy Nguyen district. The thesis also applied the the concept oi'the
“ladder o f citizen participation” with eight levels developed by Sherry Amstein
(1969) to evaluate the levels o f participation. This model is considered a tool to
identify levels o f participation o f organizations as vvell as citizens in three main
categories: Non-participation, Dcgrees o f tokcnism and Degrees o f citizen power.
In addition, so that the causes o f the weaknesses in the State budget
expenditure m anagem ent could be deeply analyzed, the author conducted in-depth
intervievvs with a num ber o f leaders o f district People’s Committee, and officials o f
division o f planning and íinance, division o f education, division o f health at district
level as vvell as some chainnen and accountants at commune level.


district construction debts increased by nearly 2 times in comparison with the
allocated budget after three years.
-

District State Treasury has done vvell both in revenue control and cash - on

hand íbrecast to timely serve spending neeđs. Only at the end o f the year, when
demands for spending are too large, it suffers from shortage o f money.
-

The participation o f commune authorities in the district activities; o f socio -

political organizations in the Party and government activities; o f people in district
govemment activities was at the same level o f No power (compared vvith eightlevel ladder developed by Sherry Arnstein (1969) to describe the process o f citizen
participation). This shows that the "abolishment o f district People's Council" has

many shortcomings. Some activities such as determination o f socio-economic
objectives and determination o f budget allocation, etc., were not conducted in
accordance with intemational good practices.
In terms o f respect for people’s opinions, there was difference in situation
between the district level and commune level. Comparison between the two levels
shovved that the degree o f citizen participation in the activities o f commune level
was between the “Degrees o f tokenism” and ‘Degrees o f power” in the 8 - level
ladder described by Sherry Amstein (1969) while disírict level only reached “No
povver”. It proved that commune People's Council has efficiently implemented its
function and power, rcpresenting the will and aspirations oí local peoplc. Thercby,
the level o f rcsponsibility o f authorities for the settlement o f citizens’ claims was
higher at commune level than district level.
Some recommendations were made for the effective management o f public
expenditure management, nainely:
-

Strengthening the monitoring and supervision o f the implementation o f

íìnancially transparent processes at all levels, especially commune level. Public
disclosure o f tìnancial performance should be clear, simple, understanđable and
timely.
-

Strengthening the coordination and participation o f stakeholders and

citizens to identify key tasks and key investment prọịects in order to avoid
spreading - out budget and limit povver abuse, corruption and vvaste.


-

Output

-

based

allocation

vvill

improve

budget

perfonnance

and

accountability o f budget users. The output here is understood as the result o f the
activities períormed by the organization as assigned.
-

Improving self-responsibility o f civil servants, contributing to saving State

budget spending. Specifying the responsibilities o f each individual in the
organization and enhance their self-responsibility wiỉl contribute to improving the
efficiency o f State budget spending.
Suggestions for íuture research:
Expanding the research scope to other districts o f Hai Phong City will

provide a more obịective perspective for assessment.
Contribution o f the thesis:
Strengthening public íìnancial management towards openness, transparency,
accountability and participation will help Thuy Nguyen effectively use its
resources and to be a reliable place to receive investments from the higher levels
and private sectors.
Key words: Abolishment o f People's Councils, public lìnance, pubiicity and
transparcncy, accountability, participation, predictability.


TABLE OF CONTENTS
A C K N O W LED G EM EN T

ABSTRACT
TABLE OF CONTENTS
LIST OF TABLES
LIST OF FIGURES
LIST OF CHARTS

ABBREVIATIONS
1.

2.

3.

4.

IN TRO D U CTIO N ..............................................................................................................1
1.1.

B ackground.................................................................................................................. 1

1.2.

Research objectives.....................................................................................................2

1.3.

Research questions......................................................................................................2

THEORETICAL FR A M E W O R K .................................................................................3
2.1.

Four pillars o f good govem ance............................................................................... 3

2.2.

Main Objectives o f Public Finance M anagem ent................................................. 3

2.3.

Public expenditure m anagem ent and good govem ance......................................4

RESEARCH M E TH O D O LO G Y ...................................................................................9
3.1.

Outline o f the research m ethodology.......................................................................9

3.2.

Data collection m ethods............................................................................................ 9

3.3.

Methods o f data Processing..................................................................................... 10

DATA A N A L Y SIS......................................................................................................... 11
4.1.

Overvievv o f budget management o f Thuy Nguyen d istrict...............................11

4.2.

Assessment o f accountability in the management o f the district budget...... 13

4.3.

Assessment o f the budget transparency................................................................ 20

4.4.

Assessment o f the budget predictability...............................................................28

4.5.

Assessment o f participation in budgeting p ro cess..............................................32

5.

CO N CLƯ SIO N S............................................................................................................. 39

6.

R EC O M M EN D A TIO N S...............................................................................................41

7.

6.1.

Recom m endations..................................................................................................... 41

6.2.

Suggestion for future research:............................................................................... 41

CONTRIBƯ TION OF THE TH ESIS..........................................................................42

R E FE R E N C E S.........................................................................................................................43
A P PE N D IC E S..........................................................................................................................45


L IST O F T A B L E S
Table 1. Obịectives o f Public Finance M anagem ent........................................................ 3
Table 2. Public expenditure management and good governance............. .....................4
Table 3. Public expenditure management and good governance................................... 5
Table 4. Actual budget expenditures vs. estim ates.......................................................... 11
Table 5. Investment in Capital construction in 2011-2013 and debts by30/12/2013
..................................................................................................................................................14
Table 6. Aggregation o f Capital expenditure in 2 0 1 3 ..................................................... 15

Table 7. Total expenditure for land clearance in 2 0 1 1 ................................................... 16
Table 8. Actual expenses vs estimates o f the Division o f NaturalResources

and

Environm ent........................................................................................................................... 19
Table 9. Assessment o f períòrmance o f plans assigned o f the Division

o f Natural

Resources and Environm ent................................................................................................19
Table

10. General

transfers,

targeted transfers

for district

and commune

govem m ents........................................................................................................................... 23
Table 11. Budget settlement in 2011-2013.......................................................................25
Tablc 12. Actual revenues vs. estimated revenues 201 1-2013..................................... 28
Table 13. List o f construction works with funding withdrawal vvas not inaccordance
with thc recommendations oí the auditors........................................................................30

A B B R E V IA T IO N S

CPC

C om m une P eo p le’s C om m ittee

D PC

D istrict P eo p le’s C om m ittee

M&E

M onitoring and E valuation

PEM

P ublic E xpenditure M anagem ent

PFM

Public Financial M anagem ent

PPC

Provincial P eople’s C om m ittee

VFF

V ietnam F atherland Front

VND
V S IP

V ietnam dong
V ietnam Singapore Industrial Park


1
1.

1. 1.

IN T R O D Ư C T IO N

Background
Thuy Nguyen is a northem district o f Hai Phong city, located on important

traffic routes connecting to Quang Ninh and Hai Duong.

In Hai Phong

development strategy to 2020, Thuy Nguyen vvas identified as a dynamic econom ic
region atlracting íbreign investment prọịects such as Vietnam Singapore Industrial
Park(VSIP) o f Singapore, key projects o f the G overnm ent and o f the city.
In recent years, Thuy Nguyen has applied the regulations o f ímancial
management towards saving and efficiency. Especially the period 2011-2015 is
considered as stable budget cycle, Thuy Nguyen is applying the regulations in
accordance with the resolution o f Haiphong city People’s Council, i.e the city
provides balancing subsidy íor district level; the district sets spending limit for
commune level.

Thuy Nguyen has nine departments in the political system o f districts, 37
communes and towns are units oi'the State apparatus; There are 76 schools and one
hospital which belong to public agencies. Annual budget expenditure is from VND
700 to 900 billion.
Thus, in ordcr to ensure economically and effectively budget spending, it is
necessary to ensure transparency in the budget execution. The unit vvhich uses the
State budget must improve its accountability. The level o f participation o f pcople
under the motto "people know, people discuss, people do and people check" should
also be promoted. Predictability in budget planning should be improved to achieve
scientitìcness and effectiveness.
The government o f Vietnam has four levels: national, provincial, district and
commune levels. Each level o f govem m ent has an elected body to approve the
budget and monitor budget execution. Since 2011, at the request o f the M inistry o f
Home AtTairs, Thuy Nguyen district piloted the "abolishment o f People 's Council"
model. How it affects the objectives o f aggregate fiscal discipline, allocative
eữiciency and operational efficiency in budget m anagem ent needs to be studied
vvith a vievv to identitying lessons leamed.


2

1.2.
-

Research objectives
To review the implementation o f íollovving objectives: aggregate fiscal

discipline, allocative effíciency and effective perform ance o f public lìnancial
m anagem ent o f Thuy Nguyen in 2011-2013.
-

To exam ine the degree o f transparency, accountability and participation in

the budget cycle in Thuy Nguyen district.

1.3.
-

Research questions
Does Thuy Nguyen district’s m anagem ent o f budget expenditure ensure the

aggregate íĩscal discipline, allocative effìciency and operational efficiency?
-

W hat are the levels o f transparency, accountability and predictability in the

budgeting process o f Thuy Nguyen district?
-

What types o f participation in vvhich citizens engage at the district and

commune budgeting process?


3

2.

T H E O R E T IC A L F R A M E W O R K

The assessment o f public ĩinancial management, vvhich vvas done using new
concept o f public management acquired from the Master program held by Uppsala
University (Svveden), is summarized as íòllovvs:

2. ỉ.

Four pillars o f good governance

A ccoun tab ility

P redictability
G overn m ents should be
pred ictab le so citizens can
plan th eir ow n lives

G overn m en ts should be
an sw erab le to citizen s for
w h a tth e y do

P articipation

T ransparen cy
C itizens should know vvhat
their govern m en t is d oin g so
they can hold ỉt accou n tab le

C itizens should have a direct
say in w hat their
govern m en ts do w hen it
affects them

Figure l.F ou r pillar o f good governance

2.2.

Main Objectives o f Public Finance Management
Table !.O bjectives o f Public Kinance Management
Contents

Requirements

1 Aggregate íiscal
discipline

To control and achieve a sustainable balance
between revenues, expenditure and debt
To allocate resources to uses that reílect the

2. Allocative eíriciency
govem m ent’s policy priorities
To deliver public services effĩciently and
3. Operational eíTiciency
etTectively


4

2.3.

Public expenditure management and good governance

Table 2. Public expenditure management and good governance
O p erational
Fiscal discipline

Allocative eữìciency
efficiency

A ccountability

Stay within overall

Achieve required

Appropriate balance

budget authority

results from

o f delegation and

programs

control

Publish medium-

Publish program

Audit and

term economic

budgets, targets

legislative review of

tbrecasts and fiscal

and results

efficiency and

T ransparency
targets

Predictability

compliance

Detailed plans and

Identiíy and

Maintain cost and

budgets within

manage físcal risks

cash discipline at

targets

to períòrmance

input level

Consult stakeholders

Consult on national

Enable citizens to

on fiscal targets

strategies; enable

complain and obtain

local decisions on

redress

Participation
local programs
Applying the theoretical framework to analyze Thuy Nguyen district budget
management, the authors build specific content, as shovvn in the following table:

5

Table 3.Public expenditure management and good governance
Fiscal discipline

Allocative eíĩĩcency

O perational
eíTiciency

A ccountability

-Budget estimates

- Budget

- Autonomy

based on allocation

expenditures meet

decentralized and

norms which have

the targets

authorized in

been approved by

- Not spreading out

association with

the Provincial

investments

guidances, M&E

People's Council

- Saving o f

(PPC).

resources

- Actual
expenditures do not
exceed estimates
T ransparency

- Publicity o f

- Publicity o f targets

- Results o f actual

expenditure norms

in expenditure

spending

- Forecast o f

estimates including

estimates

resources will be

recurrent

allocated in order o f

expenditures and

inspection

priority.

Capital expenditures

audit

vs.

Publicity

as

of
and

conclusions
well

as

the

follow-up activities
after

their

recommendations
Predictability

- Forecasting o f

- Allocation norms

-Revenues are

revenues close to

consistent

concentrated in the

actual revenues and

spending priorities.

must be clearly

with

Postpone

State Treasury

o f - State treasury to

deíìned at the

construction

works

beginning o f the

to

budget year

budgetary risks

prevent

from

ensure funds for
expenditure needs.
- Having inspection


6

- Expenditure

and audit plans to

estim ates are in

reduce loss and

accordance vvith the

waste.

actual revenues
Participation

- Stakeholders

- Commune

- Opinions o f

participate in the

People’s Council

citizens and level

annual budgeting

determines its socio-

o f respect o f

process.

economic targets

govemment

- People knovv about

and conduct the

authorities

priorities in Capital

monitoring o f

- Settlement o f the

construction vvorks

implementation

govemment

process

authorities on the

- District role in

petitions o f

determining its

citizens.

socio-economic
targets and
monitoring tunction
o f socio-political
organizations

(Source: Author)

Transparency is generally defined as the principle o f enabling the public to gain
information about the operations and structures o f a given entity. Transparency is
often considered synonym ous vvith openness and disclosure, although one can fĩnd
some subtle differences am ong these terms (Etzioni 2010).
It is essential not only that iníbrm ation be provided, but that it be relevant and in
understandable form. Dum ping on the public immense amounts o f ravv íĩnancial
íìgures does nothing to improve fiscal transparency (Schiavo - Campo and Tommasi
1999).
Kopits

and

Craig

comprehensive,

(1998)

time ly,

added:

“It involves ready access to relỉable,

understandable,

and

mternationally

comparable


7

information on government activities so that the electorate and jìnancial markets
can accurately assess the government 's financial position and the true costs and
beneỹits o f government activities (including their present and/uture economic and
social ỉmplications). ”
When considering the issue o f public íìnancial management, general comments
vvere that the budget should be put in the accountability process.. Accountability has
been variously deíìned, some deíĩnitions are as follo\vs:
- D eíìnition #1 '.“Accountability” is the obligation to render an account for a
responsibility conferred.lt presumes the existence o f at least two parties: one vvho
allocates responsibility andone who accepts it with the undertaking to report upon
the m anner in which it hasbeen discharged(Ottawa: Intbrmation Canada, 1975);
- Deíìnition #2:“Accountability is the liability assumed by all those who exercise
authority toaccount for the manner in vvhich they have tullìlled responsibilities
entrusted tothem ” (M inister o f Supply and Services Canada, 1979);
In tcnns o f participation, Sherry Am stein (1969) described citizen participation as a
ladder vvith eight levels:
1.M alnipulation
2.Therapy
3.Informing
4.Consultation
5.Placation
Ỏ.Partnership
7.Delegated power
8.Citizen

control


8

Arnstein (1969) Ladder of citizen participation
C ftỉz e n c o n tr o l
D e le g a te d p o w e r

Degrees of
citizen povver

P a r tn e r s h ip

Degrees of
tokenism

No power
George Julian

Ti«fHânComuiUncy

Figure 2.Ladder of citi/.cn participation


9

3.

R E SE A R C H M E T H O D O L O G Y

3.1.

Outỉine o f the research methodology
The thesis mainly used the comparative method. The first part o f the thesis is

the analysis o f modem public íìnancial management with the application o f modern
public ílnancial principles to assess budgeting operation.
The latter part o f the thesis, Thuy Nguyen district’s management o f budget
expenditures vvas assessed from the perspective o f the new public management. The
overall assessment considered the level o f compliance with the aggregate íiscal
discipline, by comparing the achievements vvith the initial goals to see the
difference. The study o f budget execution process was done in different stages:
Budget estimation, budget execution, budget settlement and budget revenues.
The collected data were synthesized by content based on the theoretical íramevvork
of:
-

Transparency

-

Accountability

-

Predictability

-

Participation

The above-mentioned

issues vvere analyzed

in terms o f strengths and

weaknesses in the process o f pertonning thc budget expenditures o f Thuy Nguyen
district and in association with the analysis o f budget revenues to clariíỳ the
autonomy o f Thuy Nguyen district's budget. Thereby, general conclusion about
district budget autonomy was made.
They vvere also analyzed in combination with interviews vvith multiple
stakeholders at different perspectives to clarify the level o f compliance with fiscal
discipline, allocative efíìciency and operational eftìciency o f the district budget.

3.2.

Data coỉlection methods
Data were available from the annual report 2011 - 2013: Estimates o f

revenue and expenditure, performance reports and budget settlement reports. Based


10

on the key concemed issues o f the thesis, the author developed questionnaires to
conduct interviews with the leaders o f the tìnancially autonomous units such as:
Health; Education; District departments; Schools; district and commune People’s
Committees to dravv conclusions about the effectiveness o f budget spending in each

unit; allocative efficiency o f expenditure and participation in drafting the annual
district budgct.

3.3.

Methods o f data Processing
Synthesis and comparison methods vvere used. Data vvere synthesized by

each stage o f budget operation, namely budget estimation, budget execution, budget
settlement and budget revenues. Comparison method was used to compare: norms
estimated vs. norms allocated; actual vs. estimates to determine the degree o f
compliance with the tlscal discipline o f the district; comparison o f the ratio o f
subsidies

in

the

total

budget

every

year;

comparisonbetween

the

actual

períbrmances vs. report to determine the transparency o f management. Statistical
method vvas used as well to check the Capital construction debts accumulated to
201 3. The data Processing vvas also combined with a summary o f in-depth interview
results to assess the level o f participation o f citizens and civil society organizations
in the budgeting process.


11
4.

D A T A A N A L Y S IS

4. ỉ. Overview o f budget management o f Thuy Nguy en district
In the implementation o f the public íĩnance refonn program in accordance vvith the
State budget law, Thuy Nguyen has increased decentralization o f budget management
to communes and delegation o f íìnancial povverto units using State budget. It also set
salary caps o f offìcials andcivil servants according to theallocated norms.
In order to strengthen control o f public expenditures towards publicity and
transparency, each unit using State budget issued intemal spending rules which were
developed in an open discussion vvith the involvement o f its oữìcials.
Management based on estimates approved by the district People's Council is one o f the
regulations o f the State budget lavv. However, the actual expenditures líom State budget
in 2011-2013 o f Thuy Nguyen districtmuch exceeded the estimates, see Table 1 belovv:
Table 4.Actual budget expenditures vs. estỉmates
Unit:VND million
Items

2011

2012

2013

Estimate

Settlement

Percentage increase

Total expenditure

55,9621

747,301

33.5%

Recurrent expenditure

427,697

465,217

8.7%

Capital expenditure

131,924

282,084

113.80%

Total expenditure

601,743

685,919

14%

Recurrent expenditure

459,890

488,654

6.2%

Capital expenditure

141,853

197,265

39%

Total expenditure

654,049

855,848

30.8%

Recurrent expenditure

499,880

555,349

11%

Capital expenditure

154,189

300,499

94.80%

ịSource: Disírict financial settlement report)


12
In terms o f total expenditures, in 2011 and 2013 the actual expenditures exceeded
the estimates by over 30%, vvhich vvas mainly due to the loose management o f
Capital expenditures Though Capital expenditure increased to 113.80% in 2011 and

94.80% in 2013, there remained debts because o f spreading investments. Chart 4.1
and 4.2 provide comparisons o f the actual vs. estimate in recurrent expenditure and
in Capital expenditure to show a clearer picture o f the district hudget management
Chart l.A ctual vs. estimate in recurrent expenditure in 2011-2013

Unit: VND billion

□ E u ia a ie i

■ \rtual

2011
( 8 , 7%)

(Source: District fììnancial settlement report)
Chart 2. Actual vs. estimate in Capital expenditure in 2011-2013

Unừ: VND billion

□Emmatcs
■ Actual

2011

2012

(113,8%)

(39%)

(Source: District financial settỉement report)


13
So that the picture o f Thuy Nguyen district budget management can be seen more
clearly, the next part o f the thesis vvill analyze in depth the four pillars o f "good
govemance", namely: accountability, transparency, predictability and participation.

4.2. Assessment o f accountabiỉity in the management o f the district budget
4.2.1. Hai Phong city People's Committee developed the allocation norms o f
recurrent expenditures fo r

State agencies

at district and commune

levels.Hoxvever, during the implementation process, the DPC adịusted to
increase the norms fo r the district authorities and reduced the norms fo r the
communes under its management.
In order to maintain íìscal discipline and avoid deficits, the norm for administrative
expenditure vvas specitìed in the Decision No.2050 o f Hai Phong city People’s
Committee vvith an amount o f VND 22 million / person / year. It vvould not be changed
during stable budget period 2011-2015 (uníess there is an adjustment íor inílation).
Nevertheless,

in 2013 the DPC adịusted to decrease the norms allocated for 37

communes by an average of VND 21.64 million/ person / year, while administrative
expenses tbr the district level washigher than prescribeđ atVND 23.87 million / person /
vear. I’he main cause o f this adjustment was that they had to pay salary for contract staíì’

in addition to full-time statT vvho arc regulated by the City Department o f Home Atĩairs.
ITius, in terms o f accountability, the DPC "tightened" spending o f the lower - level
authorities but they werc "generous" to its level by allovvingthemselves to allocate
expenditure over the norms. It is an unacceptable action.

4.2.2. The situations o f spreading investment, debts and ineffìcient investments
have regularly happened
Characterized as a poor district, the objective reason vvhich caused large investment
đebtsot' over 40% in all types o f constructions ovvned by the district and commune
levels in 2011-2013 (illustrated in Table 4.2 ) vvas that the city govemment (higher
authorities) provided Capital expenditures in drops and untimely. Hovvever, the main
cause o f this situation was due to the fact that the People's Committee
determinedtoo manysocio - economic obịectives to be achievedwithout linking them
to tìnancial resources.


14
Table 5. Investm ent in Capital construction in 2011-2013 and debts by
30/12/2013

ưnit: VND million
Work

Accum ulate

Debt from
done by
Contents

Total

Debts in

d funds

previous

debts/
Capital construction

2011-

b y30/12/20

year

vvork
by 30/12/201

2013

13

done

26,526

106,242

89,040

43,728

41%

264,415

746,214

658,820

351,809

47%

12,514

46,210

31,988

26,736

58%

293,455

918,666

799,848

392,273

42%

Constructions
invested and
ovvned by
communes
Constructions
invested and
owned by
District
Other
constructions

Total

(Source: District fm ancial settlement report)
In-depth analysis on the investment in Capital construction, we can see that the
investments have been sprcading. Even in the Resolution o f the People's Council
there vvere too many goals determined, so it was difficult to identify key
objectivesand key constructions
Table 5 illustratesm ore about the spreading o f investment and the DPC started to
find theirresponsibility for settling these debts. In the 2013 estimates, spending for
school construction accounted for 62.2% o f the total Capital expenditures o f the
district, but thcy mainly used

Capital expenditures for payments o f construction

15
debts arising from many years ago. Expcnditure for rural roads vvas high, which
accounted for 16.3%. With regards to construction items to be constructed and
repaired such as otĩices o f the Party, Goverment and mass organizations, though
Hai Phong city People’s Committe directcd Thuy Nguyen district to "stop the

construction and repaỉr o f thehead offices ” since 2010, it still deployed some o f the
construction items.
Table 6. Aggregation of Capital expenditure in 2013

ưnit: VND million.
Investment items

Estimate

Rate (%)

1,800

2,6%

11,000

16,3%

Landíill

4,500

6,7%

4

Head office o f education

4,500

6,7%

5

Schools

42,161

62,2%

6

Radio stations

700

1%

7

Cutural houses

500

0,7%

8

Sports Center

500

0,7%

9

DistrictCommissioner Headquarters

700

1%

10

PeopIe's Committee Headquarters

1,200

1,8%

1

Drainage ditch

2

Rural roads

3

Total

67,561

(Source: District/ ìnancial settlement report)
Spreading investment led to inefíìcient investment. Land

has been lefỉ idle

many years despite hugc o f money was spent by the DPC for land clearance.

for


16

Table 7. Total expenditure for land clearance in 201 ỉ

Uoit: VND million
Content

2011

2012

2013

Total

Land clearance

45,518

48,945

53,200

147,663

(Source: District /m ancial settỉemení report)
Thuy Nguyen district notiíìed its communes and the thousands o f households on
land acquisition policy, mainly agricultural land to serve the industrial prọịects. It
drew up an inventory, developed land, crops and architectonic model compensation
plans. It requested people to stop production for many years. Hovvever, by the end
o f 2013, hundreds o f hectares o f land has been left idle and thousands o f households
were sutĩered ÍTom “exceedỉng o f fallow land but lacking o f cultívatìon land”. The
district did not allocate funds for land clearance as announced to households but
vvaited for the advancem ent from the enterprises havinginvestment prọịects. Some
enterprises are really facing diftìculties but some intended not to carry out their
prọịect, which led to delayed prọịects causing loss to many people
The delay of many prọịects of Vinashin in Thuy Nguyen Hai Phong has made thousand
of local households lose their families' livelihoods

A project o f Nam Trieu Shipbuilding Corporation left idle.


17
Hundreds of hectares of land has been left idlc
Thuy Nguyen notified Lam Dong CPC about acquisition of more than 75ha of land,
mainly rice cultivation and aquaculture ponds to build Lam Dong Shipyard of Thanh
Long shipbuilding industry limited company. Then, the commune receiveđ a recall of
more than 50 ha of land of more than 50 households for building South Kien Bridge
industrial zone of Shinec shipbuilding industry joint slock company (a shareholder of
Vinashin) and 12 ha of agricultural land for building factory of the Cam River
shipbuilding company.
As much as 140ha out of 200ha of Lam Dong commune were revoked for three Vinashin
projects, affecting at least 400 households.
Tam Hung Commune is now home to two delayed projects of the Vinashin’s affiliate
Nam Trieu Shipbuilding Corporation. The projects, covering a total 67.5ha of land, were
started in 2008 but remain idle to this day.
People of Hoang Dong Commune also had to give up 69ha of land to Vinashin An
Duong shipbuilding project, which is still a fallow land plot..
A project to upgrade and expand the shipyard tầctory of Pha Rung one member limited
company, with a total investment ot'more than VND 4,876 billion, on 93ha of land in
Minh Duc town, completed the clearance but after started the construction of somc items,
it was delayed.
Local authorities vvant to re-lease the planned land plots to households for a short time,
but few want to take the land because it would take them at least 3-5 years torecover
their investment..
Meanvvhile, an entertainment and tourism complex planned by Quang Minh-Vinashin
Tourism and Investment Company also occupies 151 ha of land at Thuy Son Commune.
The project has not progressed because of a lack of C apital
People are in excess of fallow land but lack of cultivation land

Lai Van Duc, o f Tam Hung Commune, said, he and his brothers leased 2,880 square
metres íor aquaculture. They invested much of their savings in the area, but because of
the Vinashin projects that area is not in use.
Source (Labour Nevvspaper) - No. 281 by HOANG HOAN - 9:38 AM, 04/12/2013
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