Thaveeporn Vasavakul. Ph.D[1]

The move towards political and administrative reform in the region of Southeast and East Asia unfolded in two waves, in the late 1980s as part of a large-scale democratization movement in the region and in late 1997 as a result of the financial crisis that erupted and spread within the region. For Vietnam, the political and administrative reform movement has unfolded as part of the doi moi reform agenda, itself officially endorsed by the Sixth National Congress of the Communist Party of Vietnam (CPV) in 1986. In 1995, the Eighth Plenum of the Central Committee (VIIth Congress) endorsed the reform of the public administration and in 2001, Prime Minister Phan Van Khai promulgated the public administration reform master program for the years 2001 to 2010. The CPV and the central government consider the public administration reform program a necessary policy measure to build a government system capable of developing the national economy, maintaining social equity, preserving the national cultural identity, and preparing Vietnam to integrate into the regional and international community.

The official endorsement of public administration reform marked a major turning point for Vietnam’s public institutional building endeavor in at least two aspects. First, it officially revived the concept “public administration”, incorporating it as part of Vietnam’s overall governance reform vocabulary. The concept “public administration” did not exist separately during the central planning period but was merged into the concept of the state, itself often referred to as the bureaucratic subsidizing apparatus (bo may quan lieu bao cap). The revival of the term and the entity “public administration” can be considered the post-central planning’s “new thinking”. Second, the official endorsement of public administration reform opened up the possibility for new development concepts and vocabulary to enter Vietnam. The key ones generally found in Vietnamese writings on administration and governance are terms such as state ruled by law, bureaucracy, new public management, public services and service delivery, multi-sectoral ministry (bo da nganh da linh vuc), service delivery, output-budgeting, public finance, medium- term expenditure framework, result-based management, performance management, and meritocracy, to cite a few. These terms have been translated into Vietnam with varying degrees of local flavor.

Central planning to doi moi

According to writings by Vietnamese technocrats advocating the reform of state administration, central planning - interpreted by the political leadership as being synonymous with extensive and intensive state intervention into every aspect of the socio-economic, political and cultural life of society - gave birth to a colossal and highly segmentalized central state administrative machine. At the central government level, for example, the number of ministries and ministerial-level agencies increased from 12 in 1945 to 19 in 1955. In 1959 there were 20 ministries, four state committees, one state bank and six organizations under the Council of Ministers. By 1981 this had risen to 27 ministries, six state committees and 28 organizations under the Council of Ministers. In 1987 there were 28 ministries and ministerial-level organizations and 26 organizations under the Council of Ministers.[2] This burgeoning of administrative agencies was apparent at the local government level as well. At one point, the average number of local administrative units reached 40-50 for each municipality and province, 20-25 for each precinct and district, and about nine for each quarter and commune.[3] The technocrats’ writings also reveal the extent to which, under central planning, politics and economics were enmeshed. Government agencies at every level were entitled to own industrial and agricultural enterprises of varying sizes. This system gave rise to a network of government offices-cum-owners, generally called bo chu quan by the Vietnamese.

The bureaucracy developed under central planning was gradually transformed in the era of doi moi. In the early 1990s, the first emphases went to the reduction of the number of government agencies and the simplification of administrative procedures. In the mid-1990s, the notion of public administration reform covered institutional reform, organizational reform and reform of the civil service. In the early 2000s, it has been extended to cover public financial reform. Promulgated in 2001, the Public Administration Reform Master Program (PAR-MP) officially targets the four key reform areas of institutional reform, organizational reform, improvement of the contingent of cadres and civil servants, and public finance reform. The PAR-MP specifies nine objectives to be achieved between 2001 and 2010, with emphasis going to accountability, transparency, coordination, reduction of compartmentalization in the preparation of legal documents, and reduction of corruption. Its implementation is to be carried out through seven national action programs, in two stages, from 2001 to 2005 and from 2006 to 2010.

Based on the PAR-MP and the guidance of the Public Administration Reform Steering Committee, ministries, central agencies, and People’s Committees of provinces and centrally run cities guided their respective PAR steering committees in formulating and implementing annual and five-year PAR plans. In early 2004, the central government strengthened the system of PAR steering committees at all levels and sectors. At the central level, the Prime Minister chaired the National PAR Steering Committee, with a Deputy Prime Minister and the Minister of Home Affairs serving as vice-chairs. Heads of the administrative units at central and local levels chaired their units’ PAR Steering Committees. There would also be full-time government officials responsible for public administration reform work at the local level.[4]

To reinforce the implementation of the reform from 2006 to 2010, Resolution 17-NQ/TW dated August 1, 2007, of the Fifth Plenum of the Central Committee, later recaptured by Government Resolution 53, confirms the need for public administration reform to increase the effectiveness of state management. The Resolution outlines nine directions and solutions which can be classified into four groups of focuses. The first is increased leadership by the CPV on administrative reform of decision making, implementation and monitoring. The second is coordination between administrative reform and legislative reform. The third focus confirms the key aspects of the PAR-MP and the reform measures implemented from 2001-2005, that is, the continued development and improvement of the institutional system, especially the OSS, organizational reform, civil service, and public finance, and the modernization of government. The fourth focus concentrates on a good relationship between administrative agencies and people, and the effective participation of people and society in the management activities of state administrative agencies.

Resolution 17 places a greater emphasis on the simplification of administrative procedures as well as the restructuring of the government organization along the lines of management decentralization, the subjects to which the author turns.

Simplification of procedures

The simplification of administrative procedures is one of the key areas that properly reflect the nature of the relationship between government agencies and society. It has been placed under the rubric of institutional reform, which is the first pillar of the PAR-MP. The simplification of administrative procedures took place in stages with the key guiding instructions being Decree 38/CP (1994); Decision 181 (2003), Decision 30 (2007), and Decision 93 (2007).

The first stage came with Resolution 38/CP dated May 4, 1994, on steps toward the reform of administrative procedures in handling citizens’ requests.[5] In the 1990s, this move set up the very first agenda for public administration reform. Pilots emerged in a large number of provinces, reaching 35 provinces by September 2003.[6] The second stage was heralded by Decision 181/2003/QD-TTg dated September 4, 2003, that institutionalized the administrative procedural relationship between government and society through the use of the one-door mechanism, often abbreviated in English as the one-stop shop (OSS), at the provincial, district and commune levels.[7] At the provincial level, four departments were asked to set up the OSS early, the Department of Planning and Investment (DPI), Department of Labor, War Invalids and Social Affairs (DOLISA), the Department of Natural Resources and Environment (DONRE), and the Department of Construction (DOC). The key procedural areas addressed are the issuing of business registration, certificates recognizing the ownership right to houses and land, construction permits, decisions on investment, household registration, and permits related to social policies.[8] The Ministry of Home Affairs reported some positive impacts of decreased amounts of time for the procedures. For example, the grant of land use rights titles was reduced from 90 days to 30 days (with vanguard provinces including Quang Tri, Thua Thien Hue, Quang Binh, Nghe An, Ha Tinh), the grant of construction permits from 30 days to 15 days or less, and the grant of investment permits between 3-7 days. Some localities reportedly took the initiative to push the OSS concept further, a likely response the local needs for procedural reform. Quang Tri took the initiative to promote an inter-sectoral and inter-level OSS (called lien thong in Vietnamese) to link the work of the DPI, the Taxation Department, and the Police in the area of land allocation and the issuing of land use rights titles, an experiment later expanded to cover four provinces - Hue, Quang Binh, Ha Tinh and Nghe An. Ho Chi Minh City applied ISO 9001:2000 as a basis for building the procedures and the system of feedback from citizens. A number of sub-level administrative units in Hai Phong and Da Nang promoted the inter-sectoral and inter-level OSS in the area of labor, war invalids and social affairs.

Some positive results notwith-standing, the implementation period brings up a number of problems related to the role of the government in providing services. On the part of government officials, there remains some lack of commitment as well as guidance. This is seen through the lack of timely implementation, lack of assignment of a proper location of an OSS site (10% of the OSS at the commune level did not have a work space and 40% were located in old houses, for example); and lack of infrastructure. Only 20-30% of OSS staff members met the standard required. From the institutional perspective, the coordination mechanism among government agencies was weak, leading to delays; many government agencies continued to follow their own sectoral rules and regulations, ignoring potentials for inter-sectoral coordination. Furthermore, procedures issued by the central agencies were complicated, often with conflicting messages. For example, the stipulation of the functions and tasks of the Office for the registration of land-use rights as an income generating agency, and the OSS based on Decision 181. The lack of unified legal documents thus made it even more difficult for government agencies to coordinate.[9]

At the central level, Resolution No. 01/2004/NQ-CP required that all ministries and ministerial-level agencies review and abolish inappropriate administrative procedures when handling issues involving citizens.[10] Several ministries served as pilot units, focusing on two types of services. The first type of service was the handlings of procedural matters through the OSS. Piloting ministries included the Ministries of Trade and Industry, Home Affairs, and Finance’s tax agencies and customs agencies, the State Treasury, the Foreign Investment Agency attached to the Ministry of Planning and Investment, the Ministry of Natural Resources and Environment, the Ministry of Agriculture and Rural Development, and the Ministry of Education and Training. The second type of service was petition handling through the OSS, with participating ministries being the then Ministry of Culture and Information and the Ministry of Labor, War Invalids and Social Affairs.

The pilot period involving several ministries shows that the importance of the OSS varied from ministry to ministry. The OSS was not useful for agencies engaged in policy making and macro management that had little contact with citizens. The concept was useful for government agencies regularly dealing with providing servicing to citizens such as taxation units, the State Treasury, and customs units. The OSS concept was also appropriate for specialized agencies such as the Ministry of Natural Resources and Environment and the Ministry of Agriculture and Rural Development. The ministries whose responsibility was institutional and macro management did not have much OSS-related work. The Ministry of Home Affairs, for example, only received two applications on the setting up of associations to process, while the Ministry of Culture and Information over the period from January to November 2007 did not have any cases to handle. The Foreign Investment Agency, over a period of nine months, solved 53 applications related to Vietnamese companies or citizens investing outside Vietnam. During its busiest month, it handled 13 applications and during its slack month, the Agency handled one application. The Ministry of Finance itself did not have any cases to handle over a period of three months. Nevertheless, the customs agencies solved 30 cases over a period of six months; while the tax agencies reportedly were very busy, no figure was reported. The ministries whose OSS units were engaged in intensive activities were the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Environment and Natural Resources, the Ministry of Agriculture and Rural Development, and the Ministry of Education and Training. Secondly, in terms of the quality of services, the OSS model made a recognizable contribution when the procedures were not complicated. In general, the ministries having multi-sectoral and multi-purpose functions need to consult a larger number of agencies to solve procedural questions. For some of these ministries, it is difficult to set a time limit for the return of files; because of the complications of the problems, there was a need for consensus among related agencies. The Ministry of Education and Training, for example, over a six-month period, had only solved 36 of the overall 504 cases related to the setting up of universities and colleges. It could not return results on time because of the complicated process. Finally, because of decentralization from the central to the local government, the number of procedures to be solved by the ministry has been reduced. In this sense, the setting up of an OSS station at some ministries whose work had been decentralized led to waste.

The second stage of the move to simplify procedures is a comprehensive plan to overhaul administrative procedures in all aspects and fields. The Prime Minister promulgated Decision No. 30/QD-TTg dated January 10, 2007, in order to approve the project on the simplification of administrative procedures in all areas of state management from 2007 to 2010. The Office of the Government is assigned the responsibility to follow up the implementation of the Decision by government agencies at all levels. The objective is to “simplify administrative procedures in all areas of state management in order to guarantee uniformity, simplicity, transparency, disclosure of procedures; to create favorable conditions for individuals, organizations, and businesses to implement the procedures; raise the effectiveness and the efficiency of state management and promote economic and social development contributing to anti-corruption and anti-waste. The Decision pays specific attention to administrative procedures related to business conditions, standardization of handling process, and the change in the relationship between government agencies and individuals, organizations, and businesses, and among government agencies, in handling administrative procedures.

Decision 30 focuses on four sub-areas: simplification of administrative procedures in each state management area; simplification of business conditions; simplification of application forms, administrative declarations used for administrative procedural files; and the mechanisms to receive and handle the reactions and recommendations of individuals, organizations, and businesses about inappropriate policy mechanisms and procedures.

The third stage of the reform of administrative procedures is reflected in Decision No. 93/2007/QD-TTg dated June 22, 2007, replacing Decision No. 181/2003/QD-TTg. Consisting of 16 articles, it includes a number of crucial content areas. First, it outlines the concept of cross-sectoral/cross-level OSS (lien thong) in the existing OSS framework. This model of “cross sectoral/cross level” (lien thong) can be organized to coordinate horizontal procedures among agencies at the same level, or to coordinate vertical procedures among administrative levels. The concept has been applied to a number of procedural areas including the issue of advertisement permits, business registration, seal permits, and tax numbers. Secondly, Decision 93 extends the coverage of the OSS concept to governmental agencies with a vertical management structure such as the Taxation Department, the State Treasury and the Police. Thirdly, Decision 93 calls for government agencies to classify types of procedures into those that can be solved immediately and those requiring time. Fourthly, the official name of the OSS office is given as the “Unit Receiving and Returning Procedural Results” (bo phan tiep nhan va tra ket qua) which will be located in the office of the administration and organization of the provincial People’s Committee, the provincial department, the office of the district-level People’s Committee, and the office of the Commune-Level People’s Committee. Finally, Decision 93 specifies areas where the OSS mechanism may be applied.[11]

During the second phase of the PAR implementation (2006-2010), a major move toward inter-sectoral and inter-level OSS was found in the area of business registration. The 2000 Enterprise Law required that registration be done in 15 days. The 2005 Law reduces the time limit to 10 days. The Bureau of Small- and Medium-Size Enterprises attached to the Ministry of Planning and Investment continues to reform business registration through the inter-sectoral and inter-level mechanism. There are two key implementing documents reflecting further streamlining of the process. Circular 02 has reduced the amount of time in three areas of business - registration, taxation and seal approval - to 15 days (divided into seven days for business registration and the rest for the other stages). In July 2008, the Bureau presented Circular 05 jointly drafted by three government agencies (the Ministry of Planning and Investment, the General Department of Taxation, and the Ministry of Public Security) which has reduced the time needed for processing a permit by the three government agencies to 5 days. The reduction of the time needed for registration mainly results from a reduction in the number of permits required, the merger of permits, as well as standardization of information requirements.[12]

Government agencies

The 1990s and 2000s witnessed several moves by the Party and State to reform administrative procedures. This process involved both the introduction of a new concept of service provision and the building of an institution to support the concept. By 2008, the concept of administrative services through the OSS located at an office staffed by a specific number of personnel following certain regulations has been put in place. The OSS concept has introduced the notion of government agencies as providers of administrative services to facilitate citizens’ and groups’ operations. This view replaces the notion of government agencies as controllers with facilitators. A series of surveys conducted among relevant stakeholders indicate some general satisfaction with the results of the reform. Ministry of Home Affairs (MOHA)’s reports on the OSS mechanism evaluate the impact in terms of the mechanism’s contribution to socio-economic development by solving problems related to business registration, the grant of investment permits, the grant of land-use rights titles, construction permits, taxation procedures, customs procedures, imports and exports, and social policy. MOHA’s reports have concluded that provinces promoting the OSS principle are more successful economically. Binh Duong, Ba Ria, Vung Tau, Vinh Phuc, Bac Ninh, Da Nang, and Ho Chi Minh City belong to this category.

Nevertheless, the OSS mechanism has not yet sufficiently served as a driving force for reforming the public administration system, itself a primary condition for the simplification of administrative procedures. A report conducted by the GTZ on the development of small- and medium-size enterprises in Vietnam outlines five areas of administrative hurdles that need to be rectified.[13] The first is the regulatory environment, whether the existing legal, regulatory and administrative environment is favorable to the start-up and growth of private enterprises. The second is related to land and factory construction, while the third deals with access to credit. The fourth is related to tax issues and the final area to inspection by state authorities. To facilitate the operation of businesses, relevant government agencies will need to target these areas. An interview with the Hanoi Association of Businesses also indicates that despite attempts to rectify many procedural problems, businesses operating in the capital city still see the need for further procedural reform from wide-ranging government agencies.14 The overall limitations of the OSS mechanism are three-fold. First is that the policy’s prime focus is on the output, that is, the results of administrative services as seen by the number of permits issued on time, the reduced amount of time needed by government agencies to process the files, and a certain degree of transparency in the costing process. The emphasis on output is not new; it is generally adopted by the new public management movement, which has been influenced by organizational principles from the private sector. Nevertheless, the emphasis on the output side based on customer satisfaction, as many argue, does not necessarily bring about a fundamental change within the public administration units delivering the services themselves, most of which still considered concessions related to administrative procedures meant government agencies relinquished some of their power.

The second limitation is institutional. Successful procedural reform is dependent on improvement of the general quality of the institutional and legal framework. In Vietnam, this remains an area that needs to be addressed. The key areas to be dealt with are procedures among different sub-units within the government agency as well as those among different government agencies. Cumbersome administrative procedures stem from the fact that they are promulgated by different agencies and in different forms and levels of documents without proper coordination in the first place. In some cases, cumbersome procedures are generated by government agencies’ consideration of their own convenience, resources, and infrastructure.

The third limitation of the OSS is basic inadequacies in the model of the OSS itself. At the central level, the need for the OSS to provide administrative services varies from ministry to ministry, as the pilot period shows that some ministries have more contact with citizens than others. Provincial needs for the OSS also vary from province to province and among different localities within the province. Provinces with active economic activities required an effective OSS, itself a driving force for further growth. Within the context of delegation of responsibilities, the OSS at the commune level has become busier.

While it is crucial for the reform of administrative procedures to be output-oriented, it is also necessary to design OSS measures in such a way that the OSS serves as the spearhead that fosters reform within each government agency and among government agencies through simplification of their working procedures. Restructuring the work process within the government system is the foundation for the simplification of service delivery to citizens-cum-clients, as well as for promotion of attitudes towards the government as facilitator or enabler.

Decentralization

Existing writings on the organization of the political system in general and the public administration in particular argue that decentralization is a model of organization that promotes proactiveness at the local level.[14] In Vietnam in the 1990s and 2000s, the PAR-MP program advocated the decentralization of responsibilities between central and local government units, a move reflected in three inter-related, although not yet well-coordinated, policies.

First is the organization of ministries along multi-sectoral and multi-area lines. The second is decentralization of responsibilities to the local level. Finally, in the late 1990s and early 2000s, the Party-State also paid considerable attention to the reform of grassroots-level democracy. After a series of modifications, an ordinance for grassroots democracy was promulgated in 2007.

At the central level, during the Government’s XIIth term, the Party-State’s move towards the concept of multi-sectoral and multi-area ministry was crystallized. Ministries were merged and the number of ministries and ministerial-level agencies was reduced from 26 to 22. To reflect the multi-sectoral and multi-area nature of a ministry, the entity of “bureau” (cuc) was introduced as a sub-level government agency. The role of line ministries also changed; the line ministries elaborated the overall budget within their jurisdiction and were responsible for the preparation of the sectoral strategies, which sub-national level governments had to follow in determining budget allocations.

As of 2008, Vietnam’s local administrative structure consists of three levels: provincial/municipal, district/precinct and commune/ward. Each of the municipal/provincial, precinct/district and urban quarter/rural commune levels of government had a corresponding People’s Council (Hoi Dong Nhan Dan) and executive People’s Committee (Uy Ban Nhan Dan). The system of local government followed the legal framework in the 2003 Law on the Organization of People’s Committees and People’s Councils and implementing decrees. Following the reorganization of the government, Decree 13 dated February 4, 2007, reduced the number of specialized agencies at the provincial level from 19-21 to 18-20 units while Decree 14 also dated February 4, 2008, reduced the number of government agencies at the district level.

In the doi moi era, central government agencies embarked on the redefinition of the relationship between central and local government levels along the lines of management decentralization (phan cap quan ly). Thang Van Phuc, Vice-Minister of Home Affairs, defines “phan cap quan ly” as a division of tasks, authorities and duties among government levels in executing state management functions or socio-economic activities.[15] According to him, this move was initially justified by the imperatives of a market economy. In such a context, central government cannot manage all socio-economic activities directly; its role should be limited to guiding and creating a legal framework, policies and favorable conditions for development. “Phan cap quan ly” was also driven by the need to rectify the limitations of the current institutional arrangements. Although some tasks were delegated, final approval from the center was still required. Many line ministries were still in charge of providing public services, an area of responsibility that should have been delegated to the local government level. Finally, the process of delegating tasks, duties, and authority put forth thus far was lopsided: the delegation of responsibilities was not accompanied by the delegation of financial and budgetary authority, personnel management, and administration work.[16]

There is no central legal document addressing the decentralization scheme in Vietnam. Stipulations on central and local government tasks are generally found in both cross sectoral and sectoral legal documents, key to which are the 1992 Constitution (amended in 2001), the State Budget Law (2002), the Land Law (2003), the Law on Organization of People’s Councils and People’s Committees (2003), the Law on Local Elections (2003), and Resolution 08 on decentralization from the central to provincial/municipal governments. Resolution 08 issued in June 2004 briefly outlines the division of responsibilities while relevant ministries work on more detailed arrangements. The key six work areas are: (1) land planning, socio-economic planning and investment management; (2) budgetary management; (3) management of land, natural resources, and state property; (4) management of state-owned enterprises; (5) management of income-generating public service units (education, healthcare, sports, and culture); and (6) personnel management. Detailed sectoral decentralization can be found in sectoral legal documents such as the land law and the construction law.

Overall, it is fair to say that there is a certain degree of decentralization of authority in planning, budgeting, and personnel to the provincial government. For example, the central government and the Prime Minister decide on all aspects of national planning while the provinces, based on the overall national, sectoral and economic zone plans, develop detailed local plans. The Ministry of Planning and Investment has substantially decentralized the decision-making authority regarding foreign investment to the provincial level. It has also delegated decision-making on basic infrastructure investment to this level. Within the local government structure, Decree 16/2005/ND-CP dated February 7, 2005, on management of investment in construction works and projects, depending on concrete conditions, the president of the provincial-level People’s Committee gives the district-level People’s Committee the authority to allocate the right to determine investment projects within local budgets with capitalization of less than VND 5 billion, and the commune-level People’s Committee is given the authority to determine investment projects valued at less than VND 3 billion. Provincial-level People’s Committees exercise the state ownership of land rights in their localities. They prepare and decide on land use plans, land assignment limits, land rental, and the change of land use purposes, although they are still required to follow the framework set up by the central government. Provincial-level People’s Committees will exercise state ownership responsibilities in enterprises with state participation.[17]

The 2002 State Budget Law has also, to some extent, decentralized the budgetary process. Provinces receive a block grant. The power to allocate resources rests with provincial-level People’s Councils, which also decide how much money is transferred to the district level. Provincial-level People’s Committees can set some norms to be followed by districts and communes. Only a few requirements are imposed on local government. Towns and cities under a province must be assigned responsibilities for the construction of public schools, lighting, water supply and sewerage, urban traffic, and other public infrastructure. Local governments are mandated to spend on education and training in line with the spending on these items in the total state budget. The central government still retains the authority to introduce new taxes and regulated use fees. Provinces can borrow, but only in domestic markets. The resources raised can only be used to finance capital expenditures, and only for projects which are approved by the People’s Council. A province’s stock of outstanding debts cannot exceed 30 per cent of its annual budget. This limit excludes contingent liabilities associated with the debts of provincially owned SOEs.[18]

In the areas of organization and personnel, following the general framework, decentralized management has so far focused on staffing operations, recruitment of public officials and civil servants, appointment, dismissal and transfer of public officials and civil servants. Regarding decentralized management of administrative staffing operations, the president of the provincial-level People’s Committee determines the allocation of provincial-level and district-level staffing norms and quotas. However, the provincial-level People’s Committee does not have the right to determine the number of persons on the payroll. Regarding recruitment, the Ministry of Home Affairs (MOHA) has assigned to the provincial-level People’s Committee the responsibility for managing the recruitment of public officials and civil servants. The recruitment of people working in public service delivery agencies, mainly education and health, has been decentralized to provincial departments, districts, and towns. For example, the recruitment of public employees for upper secondary schools is the responsibility of the provincial Department of Education and Training, and the recruitment of public employees for early childhood establishments and primary school education is the responsibility of the district-level People’s Committee. This change creates the proactiveness and autonomy for more effective resolution of the issue. Regarding the appointment and dismissal of administrative public officials and civil servants, in light of Resolution 08, the president of the provincial-level People’s Committee appoints and dismisses the leaders and managers of technical/professional agencies belonging to the provincial-level People’s Committee without going through sectoral management agencies. The district-level People’s Committee has the right to appoint or to dismiss the heads and deputy heads of district-level sections. Nevertheless, the appointment has to be based on the standards of positions promulgated by MOHA. Regarding decentralized management of civil servant categories, MOHA is in charge of managing the senior category of civil servants and their equivalents. Ministries and sectoral central agencies are in charge of managing such categories as technicians and clerical staff, experts, principal experts and senior experts. The provincial-level People’s Committee is in charge of managing such categories as principal experts and their equivalents downwards, while provincial departments and the district-level People’s Committee are in charge of managing such categories as experts and their equivalents downwards. Regarding transfer of public officials and civil servants, sectoral agencies and the district-level People’s Committee are in charge of internal transfers, while the provincial Department of Home Affairs will be in charge of staffing operations.

As part of the attempt to strengthen the system of local government, the Party-State also emphasized the need to strengthen the grassroots-level administration. The Resolution of the Fifth Plenum of the Central Committee (IXth Congress), March 2002, focused on the commune level. The resolution issued was entitled “Reforming and Improving the Quality of the Political System at the Commune, Ward, and District Town level.” Between 2002 and 2005, the focuses of reform will include five areas: clarification of the functions of the basic government unit, including redefining the basic government role in the budgetary process, land administration, household registration, management of investment projects, and tax collection; structural organization of the People’s Councils and People’s Committees, and training of personnel; allocation of the budgetary authority of the basic government unit; promotion of grassroots democracy; and change in leadership style of the upper echelon vis a vis the basic government unit.

In the 1990s and 2000s, there is a series of legal documents that aims at buttressing the position of the commune-level administration. Decree 121, for example, focuses on the recruitment of full-time commune-level civil servants. These changes reflect the move to clarify the division of responsibilities between central and provincial-level government agencies with some degree of management and budgetary authority assigned to the latter. Income-generating public services are key beneficiaries of the process as they were granted more room to operate in the areas of planning, budgeting, and the recruitment of professionals. The move toward decentralization is generally believed to be a measure that will help increase the effectiveness and efficiency of local government.

Grassroots democracy

Finally, the reform of the administrative system was accompanied by the promotion of popular participation under the rubric of grassroots democracy. The concept was not new; it existed in Vietnam under central planning. In the era of doi moi, it was revived in 1998 with the term “grassroots” referring to work units in government agencies, enterprise units, and grassroots-level administrative units. The aspect of grassroots democracy that is relevant to local government reform is grassroots democracy at the commune-level government unit. After five years of implementation, the grassroots democracy decree for the commune-level administrations was revised in 2003 and again in 2007 when it was elevated to the status of an ordinance.

Grassroots authorities are required to publicly inform local inhabitants about decisions that would directly affect the local community. Local inhabitants will be asked to discuss, make decisions on, and participate in (1) projects funded by local contributions; (2) the writing of village codes or conventions; (3) the internal affairs of the village population; (4) setting up boards for supervising construction projects built with the people’s contributions; and (5) organizing the protection of production and business, maintenance of security, order, social safety, and environmental issues.

Local inhabitants will be asked to comment on some documents before the local authorities promulgate them. Finally, local inhabitants would be involved in the direct supervision of certain government activities, including the activities of commune administrations, socio-political organizations, social organizations and professional organizations in the communes; results of the implementation of resolutions of the People’s Council and the People’s Committee; the moral quality of the chairmen of the People’s Council and the People’s Committee and officials of both agencies; settlement of local citizens’ complaints; estimates and final settlement of commune budgets; organizing construction; projects implemented by superior authorities; land management; collection and spending of various funds and fees; results of the handling of negative and corruption cases; and implementation of the regimes and policies on preferential treatment.

Limitations

Decentralization is considered a mechanism which will help promote proactiveness at the local level, a foundation for improved service delivery. In Vietnam, the decentralization framework that has been developed has some positive impact in motivating the local government agencies to improve various forms of services. Nevertheless, this process is no uniform owing to differences in local conditions, certain institutional limitations, and limited capacity of local stakeholders.

Firstly, there are indications that provinces and municipalities have reacted to the new reform framework differently. Certain provinces benefited more from the decentralization stipulations than others. The freedom to seek foreign investment, for example, while stimulating proactiveness among provinces, tended to benefit provinces with favorable investment conditions.[19] Provinces also concretized the framework differently, with variations in the emphasis of priorities. In a report prepared for the Australian Agency for International Development, the authors argue that the process of decentralization evolved differently in Vietnam’s provinces. Quang Ngai and Long An represent two models of decentralization in rural service delivery, the state-dominated and the market-dominated models.[20] In practice, decentralization policies are applied differently in the municipalities and provinces, and with varying degrees of success. These differences were influenced by both leadership commitment, socio-economic pressure at the local level, and local capacities.

Secondly, owing to the diversity in local conditions, there will be necessary variations on clusters of economically-led government agencies at the local level. Traditionally, a small number of government agencies served as Vietnam’s leading economic agencies, mainly the planning and investment and the finance sectors. In the era of doi moi, new clusters of agencies having potential to promote growth and services have emerged, including, for example, the home affairs sector, the trade and industry sector (itself a product of a merger of the Ministry of Trade and the Ministry of Industry), the agriculture and rural development sector with a large number of sub-sectors, the banking sector, and the tourism sector (now merged with culture and sports). The current decentralization framework does not provide a clear guideline on how to develop clusters of lead local government agencies appropriate to local conditions.

Thirdly, decentralization of responsibilities has been limited so far to the delegation of responsibilities from the central to the provincial level, with only limited responsibilities being delegated to the district and commune level administration. At the local government level, the system remains quite centralized. The province controls decision making and resources, transferring only a few responsibilities to the district, in particular organizing its administrative services and the management of income-generating public services (education, healthcare, sports, and culture). “Decentralization” has not reached the commune-level administration. An examination of the implementation of the Program for socio-economic development in communes faced with extreme difficulties (generally known as Program 135, as it was approved under Prime Minister Decision No. 135/1998/QD-TTg) provides an insight into the centralized nature of the local government system. Program 135, initiated in 1998, was aimed at promoting a market economy in disadvantaged areas through infrastructure building. It consisted of five sub-programs: infrastructure development; inter-commune center infrastructure development; relocation planning; agricultural and forestry extension; and training for commune/village staff in remote and mountainous areas.[21] It was first applied to 1,000 communes and later expanded to the 2,362 poorest communes nation-wide. Funding for 2,233 communes came from the central government, and for 129 from the provinces. Total investment from 1999 to 2004 was nearly USD 430 million (VND 6,795 billion). The review of the implementation of Program 135 shows that only 16% of all 135 communes were directly involved in planning and managing the funds as investment holders. In these communes, households and village heads were mobilized to participate in managing and supervising the allocated funds. For the rest of the 135 communes, the provinces and districts still kept control of planning and funding management.

Fourthly, there remains a weak executive and legislative link. The current local government framework grants People’s Councils expanded responsibility. In practice, however, local legislative bodies’ relationship with the executive is weak. First, the People’s Councils are only required to meet twice annually. The limited meeting time did not allow detailed discussion and consideration of all matters falling under their jurisdiction.

Additionally, the Law grants the People’s Council the power to supervise the People’s Committee. However, the People’s Committee is also subordinated to the upper echelon and has to compromise with both the People’s Council at its own level and the People’s Committee at the immediately higher level. In practice, the framework will likely encourage the People’s Committee to follow the orders of the upper echelon, and does not pay attention to People’s Council resolutions. This situation was singled out during the 1999-2004 local government term. According to Government Report No. 224/CP-QHQH dated March 13, 2003, on the organization and activities of People’s Committees at all levels from 1999 to 2003, the commune-level administrative units were not at all active. They only organized work assigned by the upper echelon. This is also the case with many district People’s Committees. The lack of true accountability to the People’s Council at its own level, and dependence on the upper People’s Committee, lessened the effectiveness of the People’s Committees.[22]

Finally, the implementation of grassroots democracy at the commune level remains uneven. A national conference to review grassroots democracy implementation met on September 28-29, 2004. Statistics showed that 100% of communes had implemented grassroots democracy, but only 38% implemented it effectively. Ninety seven per cent of administrative units had implemented grassroots democracy but only 29% were considered effective, while 88% of state-owned enterprises had implemented grassroots democracy but only 32% were considered to have done so effectively.[23]

However, the conference recognized that wherever it was implemented, grassroots democracy changed the leadership and management style of party cadres and government officials. Through grassroots democracy, the Vietnam Fatherland Front, political and social organizations, and the People’s Inspectorate developed closer ties with their constituencies, contributing to the strengthening of the local political system. Grassroots democracy in the long run also helped reduce the number of petitions, especially petitions by-passing the relevant administrative echelons.

A general survey conducted by the Association of Vietnamese Journalists singled out problems in grassroots democracy implementation. In the area of popular consultation, local inhabitants were more enthusiastic when information sharing was directly related to their rights and interests. They were interested in the government’s assessment of local inhabitants’ poverty status, poverty alleviation loans, and social and cultural work to address social evils. Rural inhabitants valued information provided by the local government more than urban inhabitants. Although there was information sharing, only about 53.7% of the informants answered that they felt that they received sufficient information; 38.7% said that they received some information and 7.8 % said they received none, or that they had no comment.[24]

In the area of popular discussion, among the five issues on which the local government was required to solicit opinions (that is, the level of contribution for infrastructure building; building of local conventions; internal affairs; inspection of projects financed by local inhabitants; and protection of local production and social order), the local government reportedly implemented with rigor the building of local conventions while down-playing the role of popular inspection. The key method for popular discussion was public meetings, but holding the meetings met various difficulties. Firstly, the number of public meetings allowed was small, a total of two annually. Secondly, there was a lack of appropriate meeting venues, so both rural hamlets and urban residential units met with varying degrees of difficulties. Thirdly, local inhabitants were reportedly busy earning their livings, and there were cases in which those attending meetings demanded remuneration for their time. Fourthly, the capacity of local cadres to gather opinions was generally low. Some localities experimented with the use of public opinion surveys (phieu lay y kien). This method was reportedly popular among those with university degrees and those aged from 25 to 44.[25]

In the area of popular inspection, Decree 79 identified 11 tasks to be inspected by local inhabitants. The survey showed that the government facilitated the people’s inspection of commune activities, the results of implementation by People’s Councils, the morality of cadres, petition handling, and collection and spending of funds. The degree of popular inspection of budgetary estimates and land management remained low. Local inhabitants inspected the collection, spending, and use of funds they had contributed themselves, but did not inspect projects funded from the government budget. Interestingly, the local cadres and local inhabitants at times failed to inspect some local projects, especially those funded by provincial or central government, because, in the words of the report, “the local inhabitants had nothing to lose if the project failed to work or was not put into good use” and “if they were too demanding, it was likely that there would not be any allocation to their areas in future.”[26]

Government in service

Over 20 years after doi moi was officially endorsed, the Party-State have developed a series of policy frameworks which together contributed to the transformation of the Marxist-Leninist state inherited from the central planning period. One strand of reform that emerged focused on the public administration system. The reform of the administrative procedures and the reform of the central-local government system discussed show a two-pronged strategy for reinventing a new government that is service-oriented.

Despite certain achievements, the notion of government in service remains a work in progress. The simplification of administrative procedures through the OSS requires support and coordination from institutional reform and the reform of the legal framework in general. Delegation of administrative responsibilities to the locality has to be accompanied by further institutional strengthening and popular participation. If not, the process would only intensify bureaucratic competition for resources. Consensus and compromise at the leadership level may create stability of leadership, but in the long run might lead to instability. To move grassroots democracy forward, public administration reform needs to promote transparency in administrative procedures and create opportunities for dialogue and connections between the government and citizens of Vietnam. This could be carried out through the existing frameworks for information sharing, popular consultation, popular discussion, and popular inspection. Grassroots democracy implementation would in turn further strengthen the local government reform process.-

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