Vietnam targets stronger debt governance through global cooperation

Vietnam targets stronger debt governance through global cooperation

Vietnam is working closely with international partners to improve its public debt management, helping lay the groundwork for stronger fiscal stability and sustainable development.

Deputy Minister of Finance Tran Quoc Phuong and the working group of the World Bank's DeMPA

Deputy Minister of Finance Tran Quoc Phuong welcomed a delegation from the World Bank’s 2024 Public Debt Management Performance Assessment (DeMPA) at the ministry’s headquarters in Hanoi on July 22. Led by lead debt specialist Lars Jessen, the delegation is collaborating with Vietnamese officials to review and strengthen the country’s debt management framework.

DeMPA is a diagnostic tool developed by the World Bank to assess a country's debt management performance. It's a methodology that uses a comprehensive set of indicators to evaluate how effectively a country manages its public debt. The tool helps identify strengths and weaknesses in debt management practices, ultimately aiming to strengthen capacity and institutions for sustainable debt management.

"The demand for domestic and foreign loans from the Vietnamese government for infrastructural development is huge, covering large projects like the North-South high-speed railway and other important transport projects," Phuong said. "Therefore, mobilising and effectively using public debt resources is crucial."

Phuong said that Vietnam is currently revising its regulations on public debt management, making input and assessments from international organisations like the World Bank especially valuable. He added that relevant departments within the Ministry of Finance will closely examine and clarify legal frameworks related to public debt in the near future.

Lars Jessen confirmed his participation in meetings between the DeMPA working group and Ministry of Finance units, where he will share international experience and provide consultation on improving public debt management – including strategic tools, planning, data systems, and reporting and disclosure frameworks. He also presented an overview of the 2024 DeMPA assessment and acknowledged the World Bank’s recognition of Vietnam’s strong performance in managing public debt.

"Vietnam’s overall debt management efficiency is considered strong, with notable improvements in the legal framework since the Public Debt Management Law was introduced in 2017, along with the implementation of supporting internal procedures," said Jessen.

The World Bank highlighted several achievements in Vietnam’s public debt management, while also recommending improvements, such as enhancing transparency through regular reporting to the National Assembly and establishing a single, dedicated debt management agency.

VIR