As reported, on December 6th, 2022, in Geneva, Switzerland, the Delegation of the State Audit Office of Viet Nam (SAV) led by the State Auditor General, Mr. Ngo Van Tuan, attended the 13th UNCTAD Debt Management Conference.
SAV Delegation attended the 13th UNCTAD Debt Management Conference
Attending the Conference were Mrs. Rebeca Grynspan - Secretary General of UNCTAD; Mr. Richard Kozul-Wright - Director of the Globalization and Development Strategy Division of UNCTAD and more than 350 senior national debt managers from over 100 countries around the world; representatives of intergovernmental organizations; agencies and organizations of the United Nations; non-governmental organizations; universities and private sector organizations, etc.
UNCTAD Debt Management Conference is a biennial forum for sharing experiences and exchanging views among governments, international organizations, academia and civil society on current developments in the debt situation in developing countries and debt management issues in the broader macroeconomic context. The conference brings together senior national debt managers from around the world to discuss some of the most relevant topics in the field today.
The conference this year takes place at a critical time with many global crises affecting the world economy, from the continued impacts of the Covid-19 pandemic to the cost of living crisis, including the problem of climate change.
The Conference would explore the impact of these crises on debt sustainability in developing countries, in order to reassess the method of achieving sustainable development goals achieved and the role of new technologies in mobilizing financial resources.
The aforementioned issues would be addressed through the perspective of macroeconomic solutions applicable to individual countries and the international community, as well as through policies and good practices in debt management.
Delivering a speech at the conference, SAV’s Auditor General, Mr. Ngo Van Tuan stated “Public debt is an important resource to promote socio-economic development in developing countries, including Viet Nam. However, the most crucial preventive measure for avoiding a debt crisis is to manage and use loans effectively, facilitating countries to repay the debt principal and interest on time".
The scene of the Conference
In the context of the global economy facing various uncertainties and unpredictable challenges, international forums such as UNCTAD 13 would create a suitable platform for countries to find the most effective solutions to gradually overcome the ongoing crises. By uniting and working together, it is likely that a sustainable and prosperous international community will be created.
SAV’s Auditor General, Mr. Ngo Van Tuan emphasized that since the end of 2019, the world has faced various rapid, complicated and unpredictable changes. Political instability, natural disasters, particularly the ongoing Covid-19 pandemic have hindered socio-economic development in most countries. On the background of a widespread economic recession, tight fiscal policies and inflationary pressures, government revenues have been negatively affected, leaving many countries with double burdens of not only having to increase their spending on economic recovery and development but also meeting financial needs to fulfill long-term debt payment obligations. “In such context, Viet Nam continues to effectively control public debt, all key indicators remain below the threshold set by the National Assembly with Viet Nam's public debt-to-GDP ratio being at 43-44%, the ratio of government debt to GDP being in the range of 40-41%, the ratio of external debt to GDP being from 40-41%, the debt payment obligation of the government to the budget revenue being from 18-19 %. In November 2022, the international credibility rating agency - Fitch Ratings assessed that Viet Nam's government debt is under control. In fact, while countries with the same credibility ratings have seen their debt burdens increase since 2019, reaching a record high of 60% of GDP in 2020 and are projected to stabilize at approximately 55% of GDP by 2024, Viet Nam's public debt remained stable at 40% during the same period,” said SAV’s Auditor General.
At the Conference, SAV’s Auditor General, Mr. Ngo Van Tuan shared 07 solutions to deal with the public debt crisis in Viet Nam, which are:
Firstly, to continue improving the legal framework, regularly amend regulations on public debt, budget, and public investment in line with international practices.
Secondly, to combine flexible and harmonized fiscal and monetary policies, closely follow the national financial plan as well as the Government's five-year and annual loan and repayment plans. Simultaneously, mobilize non-budget resources domestically and overseas to implement the Program of socio-economic recovery and development.
Thirdly, to mobilize capital from Government bonds to meet the budgetary capital needs with an appropriate interest rate, and simultaneously ensure the attractiveness of the market. Issue a variety of government bonds, particularly short-term government bonds of less than 5 years to meet borrowing needs, harmonize cash flow for debt payment, and reduce debt costs compared to long-term bonds.
Fourthly, to restructure the Government's domestic debt category, take advantage of other capital sources such as additional sources of the budget, unused expenditures fund, loans from the state budget to develop appropriate capital financing plans, save debt costs for the central budget, strengthen the connection between the State Treasury, Public Debt Management Agencies and the State Budget.
Fifthly, to adjust policies to set aside a part of supplement revenue for principal debt payment, thereby reducing debt burden and direct payment pressure of the Government in the medium and long term.
Sixthly, to remove policy barriers to disburse public investment, and simultaneously allocate more capital to key infrastructure projects with high far-reaching potential and high socio-economic development potential.
Seventhly, to promote the role of the Supreme Audit Office in detecting and preventing public debt crisis risks.
SAV’s Auditor General, Mr. Ngo Van Tuan emphasized that maintaining control of public debt safety indicators is necessary but this action should be placed in relation to the efficiency of loan usage. Therefore, the use of budget monitoring measures to ensure that loans are used for the right purposes and in an effective manner is the key to preventing a public debt crisis.
The 13th UNCTAD Debt Management Conference would end on December 7th, 2022./.