The design and implementation of support policies need to be realistic and timely.

Việt Nam•25/05/2024

Photo caption — Scene from the morning session on May 25th.

On May 25th, the National Assembly discussed in the plenary session the Report of the Supervisory Delegation regarding the implementation of Resolution 43. Delegates assessed that the effectiveness of tax policies was one of the highlights. However, concerns remained regarding limitations related to the disbursement of investment capital and the preferential loan package with a 2% interest rate, as well as the potential impact of policy absorption, processes, and procedures on implementation efficiency.

Representative Ha Sy Dong: The effectiveness of tax policies is a bright spot.

Resolution 43, introduced in early 2022 and planned for implementation in 2022 and 2023, aimed to revive the economy after COVID-19. If COVID-19 alone were the issue, these policy packages would have been unnecessary, given that the economy in 2022 already had excess capital and very low interest rates. The support packages also wouldn't have stimulated growth. However, beyond COVID-19, the economy in 2022 and 2023 faced other challenges such as war and global economic volatility, ultimately proving somewhat effective.

Furthermore, the delay in implementing Resolution 43 is not entirely a drawback. If it had been implemented aggressively in early 2022, when it was first issued, Resolution 43 would have further inflated the already burgeoning asset bubble. However, because of the delayed implementation, when the bubble had already peaked and begun its "landing" process, Resolution 43 helped Vietnam achieve a "soft landing" instead of a "hard landing" like many other countries.

The 2% interest rate reduction package has only disbursed just over 3%, but from a certain perspective, it's not necessarily a failure. If this package works well, dealing with inflation in 2022 will certainly be much more difficult. Just like the stimulus package in 2009 caused inflation in 2011.

In the context of tightening discipline and order within the policy implementation apparatus, feasibility should be prioritized. The 2% interest rate support package was not implemented due to its impracticality. Meanwhile, the VAT reduction package proved highly effective because this measure was based on existing tax procedures.

The VAT reduction also faced problems in categorizing which sectors should be subject to an 8% rate and which to a 10% rate. If given the chance to do it again, perhaps a uniform reduction to 8% would be better. The government 's management has been very flexible. Extending the tax payment deadline to the end of the year is a very practical solution because it's like giving businesses a short-term loan at 0% interest, and it has a significant impact, especially when inflation is high and bank loan procedures are difficult.

In fiscal policies, tax exemptions and deferrals are highly effective due to their ease of implementation. However, policies involving spending from the budget, such as public investment and interest rate subsidies, have been less effective. Other countries have used public investment policies very effectively to revive their economies, but Vietnam faces legal bottlenecks and stricter regulations within the government apparatus, preventing public investment from reaching its full potential.

In particular, focus on feasibility and timing, as this is crucial for macroeconomic policy. A policy that might be right in January may not be right in March when inflation and growth trends have changed. Therefore, if there are any future macroeconomic support programs or packages, the timing of their implementation must be carefully considered.

Representative Nguyen Ngoc Son: Policies need to ensure rapid and targeted absorption.

The National Assembly's monitoring report fully reflected the achievements, as well as the shortcomings and limitations, in the implementation of Resolution 43 and other resolutions on key national projects. Two particularly impressive policies were tax reductions and interest rate subsidies through the Social Policy Bank. These policies helped many beneficiaries overcome difficulties and obstacles to resume normal operations.

However, among the seven quantifiable policies outlined in Resolution 43, some have not been truly effective. For example, policies related to interest rate subsidies for commercial banks and the use of public telecommunications funds have not yielded the desired results. Furthermore, the disbursement of funds for development investment projects has not met expectations, reaching only 56%.

I believe that, after this, the National Assembly will pass a Resolution to serve as a basis for the Government to continue organizing and implementing the projects. This will provide a more comprehensive perspective. When applying special mechanisms to key national projects, many of the eight projects supervised by the National Assembly have proven effective and helped accelerate project progress.

However, monitoring results have also pointed out shortcomings and limitations in the organization and implementation of these projects. Most notably, compensation, support, and resettlement have not been fully implemented. Currently, there is a shortage of materials, especially even with the establishment and application of special mechanisms, the results are still not meeting expectations.

Regarding lessons learned in designing and implementing policies during emergency situations, emphasis should be placed on practical relevance and the resources that must be utilized during the implementation phase of this specific policy. It should be considered that the application of a specific policy is not intended to replace an established legal system, but rather to ensure that the legal policy is implemented at the desired time.

For example, Resolution 43 only applied that mechanism for two years. After that, it reverted to the normal legal system. If a special mechanism proves effective, it should be evaluated and summarized to amend the law in the system later. We should avoid applying a special mechanism at a specific time, like Resolution 43, for a more immediate, accelerated period, only to extend it for another 2-3 years; I believe that is inappropriate. When developing policies, it is necessary to ensure rapid absorption and that they meet the objectives set forth in the Resolution and the policy itself.

Representative Nguyen Thi Viet Nga: Delays in issuing guidelines have led to low disbursement rates and failure to meet targets.

Research based on reports combined with practical implementation and monitoring of this content in localities shows that the issuance of legal documents and specific guidelines for implementing Resolution 43 is still slow. Statistics from the National Assembly also show that not only some policy guidance documents are delayed, but most documents are issued late.

Of the 21 documents listed in the appendix, only one was issued on time, while the remaining 20 were delayed. Among those 20 delayed documents, four did not have specific deadlines but were still issued very late. Resolution 43, with a two-year timeframe, took exactly one year to issue. Many documents were delayed by two to seven months.

Resolution 43 of the National Assembly was issued under urgent circumstances to address pressing tasks, within a tight timeframe of two years. However, the promulgation of legal documents has been slow and delayed, similar to previous delays. This delay in promulgating legal documents is a direct cause of the low disbursement rate, the failure of some policies to achieve their set goals, and the negative impact on overall results.

Therefore, the National Assembly continues to monitor the review of accountability for organizations and individuals regarding the aforementioned shortcomings and limitations. Only through serious review will these shortcomings and limitations not be repeated, especially the delays in issuing documents.

Representative Nguyen Quang Huan: The process affects the progress.

According to parliamentary oversight, in addition to positive results, some limitations still exist, including the slow disbursement of funds. Further analysis of the causes is needed, as the issue of slow disbursement progress is raised in almost every session, but in a somewhat qualitative manner.

When providing valid reasons, while a number of items are given, it's still necessary to specify the percentage of fast or slow results in order to develop more concrete solutions. For example, analyzing slow disbursement could indicate whether the delay is due to the economy's inability to absorb the funds or because the timeframe is too short. Areas where disbursement is possible should be considered for reallocation. A series of questions need to be answered thoroughly.

For example, how does the process affect the project's progress? The government submitted the project list to the National Assembly Standing Committee five times. If an emergency situation is declared, the National Assembly only allocates the budget, while the decision on which project to choose or how to implement it rests with the government. The National Assembly only supervises and checks that the funds are used for the intended purpose.

In addition, there is the issue of procedures. Currently, some places are requesting special mechanisms for administrative procedures to expedite processing. This shows that without special mechanisms, procedures would be very lengthy. Therefore, it is necessary to study reforms to improve procedures and speed up disbursement.

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