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Cablegate: Mid-Term Consultative Group Meeting for Vietnam - Upbeat Mood, Improved Donor Coordination

This record is a partial extract of the original cable. The full text of the original cable is not available.


2001HANOI01554 - UNCLASSIFIED

UNCLASSIFIED PTQ3788

PAGE 01 HANOI 01554 01 OF 04 281007Z
ACTION EB-00

INFO LOG-00 NP-00 AID-00 CEA-01 CIAE-00 CTME-00 DODE-00
ITCE-00 DOTE-00 SRPP-00 EAP-00 EXME-00 E-00 FAAE-00
FBIE-00 UTED-00 VC-00 FRB-00 H-01 TEDE-00 INR-00
ITC-01 LAB-01 L-00 VCE-00 MOFM-05 MOF-03 AC-01
NSAE-00 NSCE-00 OMB-01 OPIC-01 ACE-00 SP-00 STR-00
TEST-00 USIE-00 FMP-00 DRL-02 G-00 NFAT-00 SAS-00
SWCI-00 /017W
------------------FEA5A6 281007Z /38
FM AMEMBASSY HANOI
TO SECSTATE WASHDC 3246
DEPTTREAS WASHDC
INFO USDOC WASHDC
USDA WASHDC
ASEAN COLLECTIVE
AMCONSUL HO CHI MINH CITY

UNCLAS SECTION 01 OF 04 HANOI 001554

SIPDIS

STATE FOR EB/IFD/ODF, EB/IFD/OMA, EAP/EP, EAP/BCLTV
STATE PASS USAID/ANE AFERRERA AND DMCCLUSKEY
STATE PASS USTR
TREASURY FOR OASIA
USDOC FOR 4431/MAC/OKSA/HPPHO
USDA FOR FAS/ITP/SCHIKH/HUYNH
PHNOM PENH FOR USAID LCHILES
MANILA PASS USADB
UNCLASSIFIED

PAGE 02 HANOI 01554 01 OF 04 281007Z

E.O. 12958: N/A
TAGS: EAID ECON EFIN VM SOE FINREF
SUBJECT: MID-TERM CONSULTATIVE GROUP MEETING FOR VIETNAM - UPBEAT MOOD, IMPROVED DONOR COORDINATION

REF: A) HANOI 1521, B) HANOI 1497

1. SUMMARY: ON JUNE 18 AND 19 IN HOI AN, IN VIETNAM'S CENTRAL
REGION, DONORS GATHERED FOR AN INFORMAL CONSULTATIVE GROUP
MEETING TO TAKE STOCK OF PROGRESS. IMF AND WORLD BANK GROUP
REPRESENTATIVES WERE PLEASED THEIR EXECUTIVE BOARDS HAD APPROVED
MAJOR STRUCTURAL REFORM/POVERTY ALLEVIATION CREDITS FOR VIETNAM.
IN ADDITION, PAPERS PRESENTED AND DONORS STATEMENTS REFLECTED A
GENERAL OPTIMISM FOR VIETNAM'S ECONOMIC OUTLOOK. MUCH OF THIS
HAS TO DO WITH THE FACT THE U.S.-VIETNAM BILATERAL TRADE
AGREEMENT HAS MOVED TO THE CONGRESS WHERE ALL HOPED IT WILL SOON
BE APPROVED. AS THE U.S. AND OTHER DONORS HAD URGED, THE AGENDA
CONTAINED MANY ITEMS REVOLVING AROUND VIETNAMESE COMMITMENTS ON
TRADE, STATE-OWNED ENTERPRISE, AND FINANCIAL SECTOR REFORM. THE
GOVERNMENT ELABORATED ON ITS PLANS FOR IMPLEMENTATION. KNOWING
WASHINGTON AGENCIES ARE INTERESTED IN FISCAL DEVELOPMENTS IN
VIETNAM, WE HAVE INCLUDED A NOTE PREPARED BY THE GOVERNMENT ON
PLANS TO IMPROVE TRANSPARENCY AND DIAGNOSTICS IN THIS CRITICAL
AREA.

2. AMBASSADOR PETERSON, ACCOMPANIED BY REGIONAL USAID DIRECTOR
CHILES AND EMBASSY HANOI ECONCOUNS DRY, MADE A NUMBER OF
INTERVENTIONS AT THE MEETING. AMBASSADOR NOTED U.S. DESIRE FOR
VIETNAM TO MOVE RAPIDLY ON ITS GROWTH TRAJECTORY. BUT IN ORDER
TO DO SO, HE SAID, THE GOVERNMENT MUST CREATE POLICIES WHICH THE
UNCLASSIFIED

PAGE 03 HANOI 01554 01 OF 04 281007Z
PEOPLE FULLY SUPPORT. "IMPROVING THE LOT OF THE PEOPLE SHOULD
ALWAYS BE THE GOAL." THE AMBASSADOR URGED THE GOVERNMENT TO
AGGRESSIVELY TACKLE STATE-OWNED ENTERPRISE REFORM TO REDUCE THE
"DRAG" THIS SECTOR IMPOSES ON THE ECONOMY AS A WHOLE. THESE
ENTERPRISES, THE AMBASSADOR CONTINUED, MUST STAND ON THEIR OWN IF
THEY ARE TO BE ALLOWED TO EXIST AT ALL. THE AMBASSADOR ALSO
EXPRESSED CONCERN ABOUT THE "MANIPULATION" THESE ENTERPRISES CAN
ENGAGE IN WITH SEVERE IMPACT ON PRIVATE SECTOR DEVELOPMENT. THE
AMBASSADOR ALSO STRESSED THE IMPORTANCE OF UNIVERSAL AND IMPROVED
EDUCATION IN VIETNAM. HE OBTAINED A COMMITMENT FROM THE
GOVERNMENT THAT THE GOVERNMENT WOULD SUPPORT A NATIONAL SAFETY
CONFERENCE LATER IN THE YEAR TO DEAL WITH VIETNAM'S HORRENDOUS,
PREVENTABLE INJURY PROBLEM.

3. THE GOVERNMENT SUBMITTED THE FOLLOWING PAPER ON BUDGETARY
MANAGEMENT WHICH WE BELIEVE USEFUL TO WASHINGTON AGENCIES AS A
REFERENCE TOOL. BEGIN TEXT:

JOINT MINISTRY OF FINANCE, MINISTRY OF PLANNING AND INVESTMENT &
WORLD BANK NOTE ON PUBLIC FINANCIAL MANAGEMENT
THIS JOINT NOTE SUMMARIZES THE ANALYSES ON PUBLIC FINANCIAL
MANAGEMENT AND ACCOUNTABILITY THAT HAS BEEN UNDERTAKEN BY THE
GOVERNMENT OVER THE LAST THREE YEARS, IN COLLABORATION WITH THE
DONORS AND THE PROCESSES THAT HAVE BEEN ESTABLISHED TO CONTINUE
DISCUSSIONS ON THESE ISSUES ON A CONTINUING BASIS. IN PARTICULAR
IT HIGHLIGHTS THE AGENDA OF ACTIONS THAT HAVE BEEN DEVELOPED BY
THE GOVERNMENT BASED ON THE ANALYSES AND THE DIALOGUE, ESPECIALLY
THE FOUR MAJOR INITIATIVES THAT ARE PLANNED IN TERMS OF WORK AND
ACTIONS.

BACKGROUND:
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PAGE 04 HANOI 01554 01 OF 04 281007Z

VARIOUS PIECES OF ANALYSES OF VIETNAM'S PUBLIC FINANCIAL
MANAGEMENT AND ACCOUNTABILITY ARRANGEMENTS HAVE BEEN UNDERTAKEN
SINCE SEPTEMBER 1998. THE FISCAL TRANSPARENCY REPORT - TOWARDS
FISCAL TRANSPARENCY- DONE JOINTLY BY THE WORLD BANK AND THE IMF,
WAS COMPLETED AND PUBLISHED WIDELY IN EARLY 1999. IT LAID OUT A
MEDIUM-TERM AGENDA OF ACTIONS FOR IMPROVING TRANSPARENCY OF
BUDGETARY INFORMATION AND PROCESSES - INTERNAL (OR MANAGEMENT),
EXTERNAL (I.E. FOR DONORS AND IFIS) AND PUBLIC.

THE SECOND PUBLIC EXPENDITURE REVIEW (PER) - MANAGING PUBLIC
RESOURCES BETTER- DONE JOINTLY BY THE GOVERNMENT AGENCIES AND THE
DONORS IN A HIGHLY PARTICIPATORY PROCESS, WENT FURTHER TO
INCREASE AND EXPAND TRANSPARENCY OF INFORMATION ON PUBLIC
SPENDING. THIS PER WAS FIRST DISCUSSED IN DALAT AT THE MID-TERM
CG IN JUNE 2000 AND SUBSEQUENTLY PRINTED IN TWO VOLUMES IN
NOVEMBER 2000. IT IS NOW AVAILABLE WIDELY ON THE WEB SINCE.

THIS PER WAS CARRIED OUT BY GOVERNMENT'S WORKING GROUP. SEVERAL
DONORS - WORLD BANK (MANAGING THE EFFORT), IMF, NETHERLANDS, UK,
DENMARK AND SWEDEN AS WELL AS ACTION AID, WORKED DIRECTLY WITH
THAT WORKING GROUP AND CONTRIBUTED SUBSTANTIALLY TO THE REPORT.
ALL DONORS WERE INVOLVED IN A SERIES OF FIVE CONSULTATIONS ON
VARIOUS DRAFTS OF THE PER DURING THE PROCESS OF ITS PREPARATION.
THE PUBLISHED PER REPORT WAS DISSEMINATED TO THE PROVINCES BY THE
MOF THROUGH NUMEROUS WORKSHOPS AND SEMINARS DURING THE FIRST
THREE MONTHS OF 2001.
IN FEBRUARY 2001, THE GOVERNMENT LED A PERMANENT GOVERNMENT-DONOR-
NGO WORKING GROUP ON PUBLIC EXPENDITURE REFORM (ARISING OUT OF A
MERGER OF THE SEPARATE WORKING GROUPS OF GOVERNMENT AND OF THE
DONORS CREATED FOR DOING THE PER) AND THE WORLD BANK AGREED TO
PROVIDE LOGISTICAL SUPPORT TO THAT GROUP. THE FIRST MEETING IN
FEBRUARY 28 WAS CHAIRED JOINTLY BY MADAM LE THI BANG TAM, VICE
MINISTER OF FINANCE, AND MR. ANDREW STEER, COUNTRY DIRECTOR OF
WORLD BANK IN VIETNAM. THE SECOND MEETING ON JUNE 5 WAS CHAIRED
BY MR. NGUYEN BA TOAN, DEPUTY DIRECTOR EXTERNAL RELATIONS, MOF,
AND KAZI M. MATIN, CHIEF ECONOMIST OF THE WORLD BANK IN VIETNAM.

THE GOVERNMENT AGENCIES DEVELOPED A DETAILED MATRIX OF ACTIONS
BASED ON THE PER CITING THE STEPS TO BE TAKEN IN EACH YEAR (I.E.
2001-2003) AND THE LIKELY TECHNICAL ASSISTANCE NEEDS FOR
IMPLEMENTING THEM AND PRESENTED IT FOR DISCUSSION IN THE FIRST
MEETING OF THE WORKING GROUP ON PUBLIC EXPENDITURE ISSUES.
DONORS INDICATED THEIR INTEREST FOR TA TO THE GOVERNMENT AND THIS
WAS INCORPORATED IN THE SECOND VERSION OF DETAILED MATRIX OF
ACTIONS (SHOWN IN ANNEX 1 OF THIS NOTE).

DONORS AGREED THAT THIS MATRIX DEVELOPED BY THE GOVERNMENT WOULD
BE USED FOR FUTURE DONOR SUPPORTS TO PUBLIC FINANCIAL MANAGEMENT
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PAGE 03 HANOI 01554 02 OF 04 281007Z
IN VIETNAM. IF NEW ISSUES ARISE AND THE GOVERNMENT AGREES TO NEW
ACTIONS AS A RESULT, THEY WILL BE ADDED TO THE AGENDA, USING THIS
MATRIX FRAMEWORK.
MORE RECENTLY, A COUNTRY FINANCIAL ACCOUNTABILITY ASSESSMENT
(I.E. CFAA) HAS BEEN CARRIED OUT JOINTLY BY ADB AND THE WORLD
BANK IN THE LATER PART OF 2000 AND 2001. THIS ASSESSMENT COVERS
FINANCIAL MANAGEMENT ISSUES IN BOTH THE PRIVATE SECTOR AND THE
PUBLIC SECTOR. ADB FOCUSED MAINLY ON PRIVATE SECTOR
ACCOUNTING/FINANCIAL MANAGEMENT ISSUES AND THIS HAS ALREADY BEEN
PUBLISHED AS VOLUME 1 OF THE REPORT. THE WORLD BANK FOCUSED ON
PUBLIC FINANCIAL CONTROL AND ACCOUNTABILITY, AS WELL AS ON
PRIVATE SECTOR CORPORATE GOVERNANCE AND THE WORLD BANK'S DRAFT
CFAA IS CURRENTLY UNDER DISCUSSION WITH THE GOVERNMENT AGENCIES.
THERE WERE A FEW NEW ISSUES AND SUGGESTED ACTIONS THAT HAVE
EMERGED FROM THIS CFAA WORK ON PUBLIC FINANCIAL CONTROL AND
ACCOUNTABILITY; THE GOVERNMENT AGENCIES WILL REVIEW THESE ISSUES
AND RECOMMENDATIONS AND CONSIDER ADDING THEM TO THE MATRIX IN THE
APPROPRIATE SECTION.

RECENT ACTIONS TAKEN BY GOVERNMENT:

-- DESIGNATED THE STATE TREASURY AS THE MAIN AGENCY RESPONSIBLE
FOR MAINTAINING THE CONSOLIDATED PUBLIC ACCOUNTS AND THUS FOR
ESTABLISHING THE INTEGRATED PUBLIC FINANCIAL MANAGEMENT
INFORMATION SYSTEM.
-- INITIATED STUDY AND SURVEY ON THE UNIFICATION OF THE TREASURY,
BUDGET AND TAXATION ACCOUNTING SYSTEMS.
-- ISSUED REGULATION ON FINANCIAL REPORTING SYSTEM OF
ENTERPRISES, INCLUDING SOES TO MAKE INFORMATION ON PERFORMANCE OF
SOES SYSTEMATIC AND ACCESSIBLE (DECISION 167/2000/QD-BTC OF
OCTOBER 25, 2000).
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PAGE 04 HANOI 01554 02 OF 04 281007Z
-- DEVELOPED COMPREHENSIVE INFORMATION/DATA ON THE "OFF-BUDGET"
FUNDS SUCH AS DEVELOPMENT SUPPORT FUND, SOCIAL SECURITIES FUND,
NATIONAL FUND FOR EMPLOYMENT, ETC.
-- COMPLETED THE DRAFT AMENDMENT OF THE REGULATIONS FOR STATE
BUDGET TRANSPARENCY AT ALL LEVELS (I.E. AMENDMENT OF DECREE
225/1998/QD-TTG OF NOVEMBER 20, 1998).
-- ISSUED RULES (CIRCULAR 118/2000/TT-BTC OF DECEMBER 22, 2000)
ON COMMUNE BUDGET MANAGEMENT AND OTHER FINANCIAL ACTIVITIES AT
COMMUNE/WARD/TOWNSHIP LEVEL AS WELL AS ON CLASSIFICATIONS
APPLICABLE TO THE COMMUNE BUDGET (DECISION 209/2000/QC-BTC OF
DECEMBER 25, 2000).
-- COMPLETED INITIAL DRAFTS OF PROVINCIAL PERS IN HCMC AND QUANG
BINH AND COPIES OF THESE PERS WILL BE PROVIDED TO INTERESTED
DONORS AS SOON AS THEY ARE FINALIZED.
INITIAL STEPS HAVE BEEN TAKEN TO DEVELOP THE MEDIUM-TERM SECTOR
EXPENDITURE PROGRAM FOR EDUCATION BY MOET AND MOF AND FURTHER
WORK WILL BE UNDERTAKEN DURING THE NEXT YEAR.

PLANNED ACTIVITIES OVER THE NEXT SIX MONTHS:

ACTIVITIES IN THE PUBLIC EXPENDITURE MANAGEMENT AREA OVER THE
NEXT SIX MONTHS WILL COVER FOUR AREAS: BUDGET LAW REVISION;
PUBLIC FINANCIAL MANAGEMENT & ACCOUNTABILITY PROJECT; FIVE YEAR
PUBLIC INVESTMENT PLAN; AND MEDIUM-TERM SECTOR EXPENDITURE PLAN.
THERE IS LIKELY TO BE CONSIDERABLE OVERLAP IN THESE AREAS OF WORK
AND THUS THERE IS NEED TO COORDINATE AMONG THESE ACTIVITIES.

REVISION AND AMENDMENT OF THE BUDGET LAW. ACCORDING TO THE LAW
PROGRAM OF THE NA, THE GOVERNMENT WILL COMPLETE A PROPOSAL FOR
REVISION AND AMENDMENT OF THE BUDGET LAW BEFORE NOVEMBER 2001 TO
SOLICIT VIEWS AND COMMENTS FROM NA DELEGATES AT THE 10TH SESSION
OF THE NA (SCHEDULED TO BE HELD IN NOVEMBER 2001) AND TO BE
PRESENTED TO THE NA IN THE SUBSEQUENT SESSION. FOR THIS PURPOSE,
THE MINISTRY OF FINANCE, IN COLLABORATION WITH MINISTRIES,
CENTRAL AGENCIES AND 61 PROVINCES/CITIES, HAS BEEN WORKING ON
PREPARATION OF THE PROPOSAL TO REVISION AND AMENDMENT OF THE
BUDGET LAW. THE WORK HAS FOCUSED ON TWO KEY AREAS AS FOLLOWS:
UNDERTAKE THE REVIEW AND ASSESSMENT OF FOUR-YEAR IMPLEMENTATION
OF THE BUDGET LAW AT ALL LEVELS OF GOVERNMENT AND ALL GOVERNMENT
AGENCIES WITH A VIEW OF IDENTIFYING WEAKNESSES AND SHORTCOMINGS
OF THE CURRENT BUDGET LAW AND PROPOSING SPECIFIC REVISIONS AND
AMENDMENTS IN THE COMING TIME.

UNDERTAKE INTENSIVE STUDY OF OTHER COUNTRIES' EXPERIENCE ON THIS
ISSUE, HARNESSING ADVICE OF INTERNATIONAL EXPERTS THROUGH WORKING
SESSION, SEMINARS AND INTERNATIONAL WORKSHOPS, RESULTS OF STUDIES
CARRIED BY DONOR-FUNDED TA PROJECTS ON FINANCIAL MANAGEMENT
CAPACITY ENHANCEMENT SUCH AS BUDGET REFORM PROJECT FUNDED BY
GERMANY, UNDP-FUNDED PER CAPACITY BUILDING PROJECT (VIE/96/028),
VIETNAM-CANADA FINANCIAL MANAGEMENT PROJECT, COLLABORATION
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PAGE 03 HANOI 01554 03 OF 04 281007Z
PROGRAM ON TAXATION FUNDED BY SWEDEN, ANALYSIS AND
RECOMMENDATIONS OF PER-2000 ETC.

PUBLIC FINANCIAL MANAGEMENT & ACCOUNTABILITY PROJECT. THE
GOVERNMENT HAS REQUESTED THE WORLD BANK (TOGETHER WITH OTHER
DONORS) TO FINANCE AN INTEGRATED PUBLIC FINANCIAL MANAGEMENT AND
ACCOUNTABILITY PROJECT THAT WOULD ADDRESS PROBLEMS OF
COMPREHENSIVENESS, CONSISTENCY AND TIMELINESS OF RECORDING,
REPORTING, MONITORING AND INTERNAL CONTROL OF BUDGET PREPARATION
AND EXECUTION. THIS PROJECT WOULD COVER THE BUDGET REPORTING AND
RECORDING PROCESS IN THE MINISTRIES OF FINANCE AS WELL AS
PLANNING AND INVESTMENT, AND INCLUDE SEVERAL SECTOR MINISTRIES,
OVER TIME.

A JOINT WORLD BANK-DONOR MISSION IS PLANNED FOR JUNE 20-JULY 2,
2001, TO DISCUSS WITH THE GOVERNMENT AND THE DONORS THE CONCEPT
OF THE PROJECT, THE WORK THAT NEEDS TO BE DONE TO DEVELOP THE
PROJECT, THE TIMETABLE OF NEXT STEPS AND THE DONORS THAT WOULD CO-
FINANCE PROJECT PREPARATION AND PROJECT FUNDING. THIS MISSION
WILL BE LED BY GEOFF DIXON AND WILL INCLUDE THE TASK MANAGERS OF
THE PER AND THE CFAA, AS WELL AS CONSULTANTS ON ACCOUNTING AND ON
PERFORMANCE MONITORING. DFID, UK, WILL FINANCE A CONSULTANT ON
THE ORGANIZATION OF THE BUDGET DEPARTMENT AND ANOTHER DONOR WILL
FUND A CONSULTANT ON INFORMATION TECHNOLOGY ISSUES.

FIVE YEAR PUBLIC INVESTMENT PROGRAM (PIP) THE MINISTRY OF
PLANNING AND INVESTMENT (MPI) EXPECTS TO FINALIZE A FRAMEWORK FOR
THE PIP, INCLUDING OBJECTIVES, CONCEPTS, SCOPE, CRITERIA FOR
ALLOCATION OF RESOURCES, FUNDING MOBILIZATION POLICIES, CRITERIA
FOR SELECTION OF OVERALL OBJECTIVES AND THOSE OF INDIVIDUAL
SECTORS, CRITERIA FOR SELECTION OF INVESTMENT PROJECTS. BASED
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PAGE 04 HANOI 01554 03 OF 04 281007Z
ON THIS FRAMEWORK, A LIST OF THE MAJOR PROJECTS OF THE 2001-2005
PIP WILL BE PROPOSED. THESE PROJECTS ARE THE CORE GROUP OF THE
PROGRAM AND APPROPRIATE ADJUSTMENTS CAN BE MADE DURING ITS
IMPLEMENTATION. THESE PROJECTS WOULD REPRESENT KEY PROJECTS NOT
ONLY FOR THE COMING FIVE YEARS BUT ALSO FOR THE WHOLE PERIOD OF
TEN YEARS AND WOULD AIM AT IMPLEMENTATION OF SOCIO-ECONOMIC
DEVELOPMENT STRATEGIES ADOPTED BY THE NINTH PARTY CONGRESS.
INITIAL SUBMISSIONS HAVE BEEN MADE BY PROVINCES AND SECTOR
MINISTRIES ON THE FIVE YEAR INVESTMENT PLAN TO MPI AND
DISCUSSIONS ARE UNDERWAY. IT IS PLANNED THAT THE PIP FRAMEWORK
WOULD BE SUBMITTED TO THE NATIONAL ASSEMBLY IN NOVEMBER 2001.
FOLLOWING THE REVIEW BY NA, GOVERNMENT AGENCIES WOULD FINALIZE
THE PROGRAM TO ANNOUNCE IT BY APRIL 2002. FOR THIS PURPOSE,
SEVERAL KEY PIECES OF WORK - TO BE DONE BY MPI - WILL BE
SUPPORTED BY THE BANK AND OTHER DONORS OVER THE NEXT FOUR MONTHS,
AND THEY INCLUDE THE FOLLOWING:
-- DEVELOPING OVERALL DEVELOPMENT OBJECTIVES AND THOSE FOR EACH
OF INDIVIDUAL SECTORS, SCOPE AND ROLES OF PIP IN ACHIEVING THESE
OBJECTIVES;
-- DEVELOPING PRINCIPLES AND CRITERIA FOR ALLOCATION OF PUBLIC
INVESTMENT ACROSS SECTORS TO ACHIEVE THE STATED GOALS OF THE TEN
YEAR STRATEGY;
-- ACTUAL DISTRIBUTION OF INFRASTRUCTURE PUBLIC SPENDING IN THE
PREVIOUS FIVE YEAR PLAN ACROSS PROVINCES, RURAL VERSUS URBAN
AREAS AND/OR GROWTH-POLE VERSUS OTHER AREAS AND THE CRITERIA TO
BE USED FOR A MORE RURAL DISTRIBUTION IN THE NEXT PLAN;
-- THE RECURRENT BUDGET IMPLICATIONS OF THE PUBLIC INVESTMENT
PLAN IN ALL KEY SECTORS (E.G. EDUCATION, HEALTH, TRANSPORT AND
AGRICULTURE);
-- ECONOMIC AND SOCIAL SCREENING PROCESS FOR PROJECTS SUBMITTED
BY THE SECTOR MINISTRIES AND PROVINCIAL PEOPLES' COMMITTEES FOR
INCLUSION IN THE PROGRAM;
-- PRELIMINARY PROJECTION OF THE RESOURCES AVAILABLE TO MEET THE
NEED OF THE PROGRAM FOR THE PERIOD 2001-05.

THE WORLD BANK ALSO PLANS TO PROVIDE A PRELIMINARY ASSESSMENT OF
THE PIP FRAMEWORK THAT WILL BE COMPLETED FOR DISCUSSION IN THE
NATIONAL ASSEMBLY IN NOVEMBER 2001.

MEDIUM-TERM SECTOR EXPENDITURE PLAN IN EDUCATION. A MEDIUM-TERM
SECTOR EXPENDITURE PLAN IS EXPECTED TO BE PREPARED IN EDUCATION
WHEREBY DONORS WILL BE SUPPORTING THE AGREED MEDIUM-TERM SECTOR
GOALS IN EDUCATION AND A SECTOR STRATEGY ON POLICIES,
INSTITUTIONS AND PUBLIC EXPENDITURES TO MEET THOSE GOALS. THE
MEDIUM-TERM EXPENDITURE PLAN WOULD THUS COMBINE RECURRENT AND
CAPITAL EXPENDITURES, THEREBY ENSURING APPROPRIATE BALANCE AND
PRIORITIZATION THAT IS CONSISTENT WITH THE POLICIES AND
INSTITUTIONS. THE MOET, THE MOF AND THE MPI HAVE ALREADY STARTED
DISCUSSION ON THE STEPS THAT NEED TO BE TAKEN TO DEVELOP THAT
PLAN. A GOOD DEAL OF THE WORK THAT IS NECESSARY THAT NEEDS TO BE
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PAGE 03 HANOI 01554 04 OF 04 281008Z
DONE FOR THIS PURPOSE WILL OVERLAP WITH THOSE REQUIRED FOR THE
ABOVE (E.G. NEW NORMS FOR ALLOCATING RECURRENT EXPENDITURE AND
FOR CASH TRANSFERS TO POORER PROVINCES TO BE DONE FOR BUDGET-LAW
REVISION; OR WOKRING OUT THE RECURRENT BUDGET IMPLICATIONS OF
EACH SECTOR'S INVESTMENT PLAN BEING PREPARED FOR THE PIP; OR THE
INTERNAL CONTROL PROCESSES AND REPORTING/RECORDING REQUIREMENTS
TO BE IMPLEMENTED UNDER THE PUBLIC FINANCIAL MANAGEMENT PROJECT).
MOET WILL TAKE THE LEAD IN THIS EFFORT, WITH MOF AND MPI
PROVIDING STRONG DIRECT SUPPORT AND WITH PARTICIPATION IN
PROVINCES. THE DEVELOPMENT OF THE MEDIUM-TERM EXPENDITURE
PROGRAM FOR THE EDUCATION SECTOR WOULD EXPECT TO DRAW ON THE
RESULTS OF PAST AND ON-GOING PROJECTS AND PROGRAMS SUPPORTED BY
UNDP, EU, DFID, THE WORLD BANK AND OTHER KEY PARTNERS.
END TEXT OF JOINT PAPER

PETERSON

UNCLASSIFIED

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