Restructuring public organizations is high on the agenda of the 6th plenum of the 12th Party Central Committee

Recent studies by the Economic Research Institute of Hanoi National University estimate state budget allocations for public organizations at 600 million USD, twice the allocation for the Ministry of Education and Training or the Ministry of Health, and 5 times higher the allocation for the Ministry of Science and Technology. Total annual spending for public organizations is between 2 billion USD and 3 billion USD. That’s between 1% and 1.7% of the GDP.

Limitations of activities

Statistics from the Ministry of Finance show that expenses for central committees of socio-political and socio-occupational organizations increased three folds from 2006 to 2015. Most public organizations have an administration system, state employees, buildings, and cars. Regular expenditures including wages and administrative expenses take up most of the allocated budget. Doctor Hoang Ngoc Giao, Director of the Institute for Legal Policy and Development of the Vietnam Union of Technical and Scientific Associations, said: “A large amount of the budget is allocated for public organizations but their operation is inefficient and clumsy.”

Luu Binh Nhuong, a National Assembly deputy for Ben Tre province says that the organization and operation of public agencies has been ineffective for many years. Given current budget limitations, it’s now time to streamline public organizations to improve their performance: “The Ministry of Finance issued a circular in 1981 stipulating the self-reliance of public organizations. It has been quite a few years since then. I think we can’t continue to subsidize public organizations for much longer given our limited budget. I agree that the state should only subsidize public organizations in realizing specific tasks assigned by the state, but not generally.”

Role models have been implemented

Quang Ninh province has streamlined its administrative system by merging public organizations and the Fatherland Front at the district and commune levels. But at a recent meeting, representatives of the Fatherland Front and the public organizations complained that the merge has not been effective because the tasks of the organizations are different. Bui Thi Thanh is Vice Chairwoman of the Vietnam Fatherland Front: “The Fatherland Front has more jobs including oversight and ganging public response at the grassroots level. But Fatherland Front staff at the grassroots level have limited qualifications and low income. It’s difficult for us to recruit staff.”

Streamlining and restructuring public organizations will help reduce budget spending and at the same time improve their performance. At the opening of the 6^th plenum of the 12^th Party Central Committee, Party leader Nguyen Phu Trong stressed the importance of immediately realizing this task, reviewing and duplicating successful models.