Decentralization in the financial sector: Municipalities demand more responsibility!

Decentralization in the financial sector: Municipalities demand more responsibility!

A significant step to promote decentralization in the financial sector has recently been announced in Vietnam. Finance Minister Nguyen Van Thang explained at a conference that the aim of this initiative is to implement a policy of decentralization, delegation of power and reorganization of the two-tier local government. These measures are part of a comprehensive reform process that is intended to reorganize the distribution of tasks, powers and financial resources. A clear focus is placed on efficiency and local conditions in order to strengthen decision-making in communities. Vietnam.vn reports that there is no generally applicable formula for delegating tasks to provinces or municipalities.

In a key issue, Hai Phong city officials advocated that the Ministry of Finance develop a unified strategy to abolish the district level. This would mean that all tasks that were previously at the district level would be transferred to the municipal level in the future. Tasks that cannot be fulfilled should be transferred to the provincial level. This would result in significantly simplified administration and clearer responsibilities.

The importance of decentralization

Decentralization in Vietnam is part of a profound change that involves the need to redefine relationships between different levels of government. Loud BMZ This process requires individual adaptation of reforms to the specific circumstances of each country. Germany's experience in promoting decentralization processes can be considered valuable, as Germany has extensive knowledge of federal structures.

A central principle here is that of “consistent decentralization to the local level,” which states: “The local decides, the local acts and the local bears responsibility.” Finance Minister Thang emphasized that the implementation of these principles should take place where it is most effective. In particular, the municipalities' concerns regarding the handling and administration after the implementation of the new model were addressed.

Public asset management and divestment

The management of public assets was also discussed during the discussion. The representatives of the Da Nang People's Committee called for consultation on adjusting the Public Assets Management Law. The Ministry of Finance should review the state financial model after mergers and adapt it to local circumstances. The Finance Minister agreed and recognized the need to transfer excess assets following restructuring to facilitate the financing of investments and projects in line with local development.

Another point raised by Thai Nguyen Province is the need for assistance in the distribution of excess assets. The Ministry of Finance will examine the disinvestment of companies based on the actual situation. It is also important to ensure that no tasks are missed during this process. The adjustment of the financial, tax and customs systems should be based on the original laws and the money flows should be distributed accordingly.