Assessment of the success of projecte Government of Vietnam''s capacity for external debt management

MID TERM REVIEW PROJECT OF THE GOVERNMENT OF VIET NAM VIE 10/010: CAPACITY DEVELOPMENT FOR EFFECTIVE AND SUSTAINABLE EXTERNAL DEBT MANAGEMENT Executive Summary Objective of Mid-Term Review The objective of the review is to assess the likely success of VIE 10/010 in meeting its goal of strengthening the Government of Viet Nam’s capacity for external debt management Methodology This assessment is based on the direct assessment by the team of reports and training programmes conducted by the project, the views of national counterpart staff and beneficiaries expressed both through interviews and questionnaires submitted to beneficiaries and examination of project documents Main Findings The project has progressed considerably towards meeting its objectives in terms of strengthening capacity for debt management, and may have largely met these objectives by the end of the project, assuming remaining planned activities are successfully implemented The sustainability of the good results is open to some doubt, however Sub-Objective 1: Strengthening the institutional and legal framework for effective and sustainable external debt management Interpreted literally, this objective has not yet been met and perhaps will not be met by the end of VIE 10/010 The Decree 90 (1998) still has not been revised in order to be consistent with the new State Budget Law, which makes the Ministry of Finance responsible for external debt management Organisational measures in the External Finance Department to strengthen management of the debt database have yet to be prepared However, interpreting this objective more broadly, and in accordance with the understanding of this objective by the Deputy National Project Director, the capacity to strengthen the institutional legal framework has been strengthened The initial impetus for this has been the report produced by VIE 10/010 on the institutional and legal framework covering external debt management and associated workshops for the staff in the technical working group covering this area, and a study tour abroad The report was well-received by the beneficiaries and the national counterpart staff The team is satisfied with the quality of the report and the associated workshops and study tour A task force has been formed to revise Decree 90 (1998) The process has been slow, however, and the revision is still in first draft stage after several months of work, the reason being differences in interpretation of the new State Budget Law and the differing perspectives of the participating agencies Nevertheless, whatever the outcome, it is an achievement that the representatives of the different agencies are sitting down together and discussing the appropriate legal and institutional framework The issue is also now receiving attention from the policy making bodies in government Subobjective Two: Strengthening the capacity to formulate public external debt strategy including preparing portfolio reviews, reviewing and updating the existing draft strategy documents and strengthening the capacity for managing and monitoring non-government external debt Capacity has been strengthened in this area through workshops, training and a study tour abroad arranged by VIE 10/010, along with reports on debt portfolio analysis and non-government debt produced by the Project, which were well received by the beneficiaries The Team considers the reports to be of high quality A workshop in February, 2004 on the debt sustainability analysis software selected by the project was well-received Shortcomings in the database precluded a portfolio review based on actual data, however, and therefore precluded the development of a revised debt strategy Whether an actual debt portfolio review takes place before the end of the project and the debt strategy accordingly reviewed will depend largely on whether the database is finalized and whether further training will take place, as discussed below Some of the recommendations of the report on non-government debt have implications for the future of DMFAS in SBV; these are discussed below Subobjective Three: Strengthening the capacity for external debt management in areas with strong fiscal links (such as guarantees, on lending, non-government public debt, and debt service) and in relation to international capital markets Capacity has been strengthened in this area with the help of a report produced under VIE 10/010 and associated workshops, training and a study tour abroad Beneficiaries in the technical working group covering this area viewed the report and training very favourably in terms of their increased awareness of the importance of understanding the possible adverse fiscal implications of government guaranteed debt and government on lending The team also considered the quality of the reports, training and study tour to be high The report on fiscal links has given added impetus to finalizing the DMFAS database in External Finance Department through entering data on government guaranteed loans and on-lent loans The further training being planned by the Project covering risk analysis, credit risk analysis in particular, and portfolio analysis will strengthen the likelihood of sustainable increase in capacity in this area For example, credit risk analysis would help determine the appropriate size of a guarantee fee The preparation of the report was originally scheduled for 2003, but work did not begin in early 2004, resulting in the report not being finalized until June At the time of the MTR, the PSC had not reviewed the report’s recommendations (e.g the guarantee fee should be related to risk) To help ensure that the knowledge gained is used it is important that the recommendations of the report should be quickly reviewed by PSC and decisions made on their implementation Implementation depends partly on changes in the regulatory framework (e.g to allow for linking the size of the guarantee fee to risk), so progress in this area is linked to progress towards achieving sub- objective one Subobjective Four: Strengthening the capacity to collect, store, process and report on external debt related information, including finalizing and integrating existing DMFAS databases and improving the external information situation regarding external financial data Having a comprehensive, accurate and up to date database is a necessary foundation for good external debt management Progress on achieving this objective was made during 2003 with the help of technical support and training missions from UNCTAD under the terms of VIE 10/010 Progress picked up markedly in recent months following the return to EFD of a skilled staff member seconded to UNCTAD as an intern under VIE 10/010 He, and two national consultants contracted under VIE 10/010, have been able to finalise the bilateral debt database, and the guaranteed loan database The multilateral debt database is expected to be finalized towards the end of 2004 Finalising the on-lent loans database is taking longer, but nevertheless is expected to be substantially finished by the end of 2004 UNCTAD will continue to support DMFAS in EFD after the end of VIE/10/010, so the sustainability of DMFAS is reasonably assured UNCTAD will upgrade DMFAS to Version 5.3 and has recently negotiated a maintenance agreement with EFD, thus institutionalizing UNCTAD’s assistance to Ministry of Finance On the government side, the management in EFD needs to focus on ensuring that staff is diligent in keeping the database up to date To achieve this, the EFD should ideally be reorganized in line with international best practice, with a “back office” established, its duties including maintenance of the data base The Ministry is giving serious thought to this idea and UNCTAD has indicated its readiness to provide assistance Reorganization takes time, however, so, in the short term, it is up to management to ensure diligent attention to the database The returned intern can continue to play a strong role in training and support The EFD should consider retaining the services of the two consultants following the end of the project Finalising the DMFAS database in SBV is proving to be harder work Substantial progress in incorporating all enterprise data into the system was made during 2003 and this year, with technical support and training from UNCTAD, but nevertheless over 100 enterprise loans have yet to be validated The process is time consuming due to the sheer volume of loans (1600), the quarterly reporting requirement and the continual changing of loan conditions which require reentering the main parameters into the system To ease the burden on staff of External Debt Management Division in SBV of maintaining DMFAS, SBV suggested that the MTR team look into the pros and cons of extending DMFAS into provincial branches of SBV, on the grounds that most enterprises report their external debt transactions to these branches The team accordingly visited the SBV branch in Ho Chi Minh city and three enterprises The Team’s view, however, is that installing and maintaining DMFAS in the branches would be costly and time consuming In order to determine whether it is worth installing DMFAS in major SBV branches, the Team considers that the whole rationale underlying detailed reporting by enterprises on their external debt first needs to be reexamined by GOV For macroeconomic and monetary policy making and monitoring purposes, such detail is not necessary and simpler software packages could be used; alternatively, DMFAS could be used to capture large loans only The risks of a financial crisis similar to that in other Asian countries in the late 1990s are probably low, given conservative macroeconomic policies, improving prudential central bank supervision of commercial banks, the programme to reform state owned enterprises, the regulatory and monitoring regime governing foreign direct investment, and the continuing restrictions on the capital account of the balance of payments Sub objective Five: Strengthening of human resource capacity for effective and sustainable external debt management The reports produced under VIE 10/010, along with the associated workshops, training and study tours, have increased knowledge, skills and general awareness of the issues The beneficiaries and staff of the agencies met by the MTR team all testify to this Further technical training planned for the remaining life of VIE 10/010 will further enhance capacity Awareness amongst senior officials in government and the National Assembly has taken some time to develop, but the recent High Level seminar indicates that it is developing The Committee for Economic and Budgetary Affairs (CEBA) has, over the past year, begun to exert a much stronger legislative oversight on fiscal policy and management and this oversight is likely to extend into debt management This oversight will help to induce top policy makers in Government to pay more attention to debt management issues The Research Council in the Prime Minister’s Office is also taking a stronger interest, as is the Cabinet Office, a representative of whom was a member of the technical working groups under VIE 10/010 Representatives of these bodies attended the high level seminar organized by the Project on August The question of sustainability arises, however No progress has been achieved yet on building capacity to sustain the training effort One of the main components of the Fellowship Programme under the Project is the selecting of key individuals for tailor-made training in debt management This also has not been done The other main component is the building of capacity in domestic institutions to run courses in debt management In this way, new staff in Ministry of Finance and other agencies can learn about debt management and take over from existing staff who move on in their careers It is important for the sustainability of the results of VIE 10/010 that Government attempts to reach an arrangement over the remaining life of this project with a domestic institute to provide such courses; such an arrangement might include the contracting of an external institute to build capacity in the domestic institute Implementing the recommendations of VIE 10/010 VIE 10/010 has made several recommendations on improving debt management, but few have been implemented yet This is partly due to delays in preparing two reports (fiscal links and non government debt), which were not finalized until July 2004 It is now up to the Project Steering Committee to discuss the recommendations and decide which ones to adopt, perhaps in modified form Constraints faced by VIE 10/010 and Lessons Learned The project got off to a slow start due to delays in recruiting international consultants The logistical problems associated with coordinating the activities of the consultants, the activities of six technical working groups and arranging meetings of the Project Steering Committee (and comments from the PSC on reports) have also led to delays in implementation The team is satisfied with the quality of the project management The main lesson to be learned is clearly that the more complex the structure of a project, the greater the logistical challenge of managing the project and the greater the chances of things going wrong Considering the coordination challenges faced by the project management, leading to slippage in activities in 2003, the project management has done a good job in accelerating the pace of project implementation during 2004 Recommendations On the basis of the findings presented above, the team has the following recommendations            EFD finalises the DMFAS database in EFD as soon as possible, with technical and training support from the Project through UNCTAD; UNCTAD to subsequently install DMFAS 5.3 EFD management to determine how to ensure more allocation of manpower to the maintenance of DMFAS; UNCTAD mission in August determines best way for MPI and SBV to access EFD DMFAS on a read - only basis and identifies need for procedures manuals in addition to the DMFAS system manual The Project prepares a procedures manual for the establishment of a back office in EFD and other assistance in this regard if requested by Government The Government considers transferring the responsibilities for managing ADB and World Bank loans to MOF from SBV The Project Steering Committee reviews the recommendations of the fiscal links and non government debt reports as quickly as possible; The Project Steering Committee assesses the desirability of decentralizing DMFAS to the provincial branches of SBV and examines options for simplifying enterprise debt monitoring The Project Steering Committee assesses the need for a High Level Advisory Council to oversee strengthening of debt management capacity The Project conducts another round of training on the technical aspects of debt management (risk analysis, portfolio analysis, capital markets analysis), followed by further training on debt sustainability analysis as part of the debt portfolio and strategy review exercise to be conducted by the beneficiaries after finalization of the database Prior to this exercise, the PSC selects trainees likely to play a strong long term role in debt management The Project assists the Government in finding a suitable domestic institution that can implement courses in debt management and, if necessary, identifies and arranges external institutions to build training capacity in a domestic institution; Preparation of the final report, including a road map for development of a debt management office responsible for both external and domestic debt To implement these recommendations, the team has prepared the following Action Plan ACTION PLAN FOR REMAINDER OF PROJECT LIFE Recommendations 1a EFD to finalize DMFAS database and demonstrate sustainability in its maintenance Actions - Ex - DMFAS intern and two national consultants validate multilateral and on-lent data base and recheck validation of bilateral and guaranteed loan data base; Time period - multilateral debt database validated by end- August; - on lent loan database validated by end – December; - Complete database system in EFD rechecked by end-December - UNCTAD mission in August checks progress in updating and validating DMFAS database in EFD & SBV - last weeks in August; - UNCTAD mission in August determines best way for MPI and SBV to access EFD DMFAS on a read only basis and identifies need for procedures manuals in addition to the DMFAS system manual 1b Desirability of maintaining DMFAS in SBV reassessed - UNCTAD check-up mission in December; - weeks in December - EFD management prepares plan indicating how it will ensure that staff maintain the DMFAS database and submits to Vice Minister (National Counterpart Director) for comments and approval EFD implements plan - Implementation of plan begins by end March, 2005 - Crown Agents prepares procedures manual for the establishment of a back office in EFD and provides other assistance in this regard if requested by Government Manual prepared by endNovember - Project office organizes special PSC meeting (with UNCTAD rep attending) to assess desirability of maintaining DMFAS in SBV with respect to user requirements of data and possible simpler options PSC makes decision on future of DMFAS in SBV - UNCTAD reassesses sustainability of DMFAS in SBV during its August visit - PSC Meeting held by end-December Project arranges extra training on risk, portfolio and capital markets analysis Project assists Government in preparing plan to develop domestic institutional capacity to train people in debt management - Staff in FED in SBV complete validation of enterprise debt in DMFAS (if decision made to continue DMFAS in SBV) - Project Office identifies and arranges training courses (as of now, it has approached Crown Agents and Ian Storkey, external adviser to Public Financial Management Reform Projcct); - Enterprise debt database in SBV validated by endDecember - by end-September; - Project Steering Committee identifies trainees (those most likely to continue to have key roles in debt management) - by end –December; - training courses are implemented - Project Office arranges PSC meeting to make a decision on which domestic institution to assist in establishing training capacity - by end – December - Project Office discusses with institution a plan to build training capacity, perhaps with help of an external institution - by end-October - If need for support from an external institution identified, Project Office to research possible candidates and approach most suitable ones Project assists relevant TDWGs with portfolio review, debt strategy review and debt sustainability analysis - Project Office and external institution develop plan for assistance Project Office researches sources of financing for the plan - Project Office arranges visit of Crown Agents mission and UNCTAD expert on DSM + to assist with this exercise (conditional on database being finalized) - by end-December - TDWGs conduct portfolio/strategy review and debt sustainability analysis with assistance of Crown Agents and UNCTAD expert - by end- March - by end – December Task force on revising Decree 90 completes its work and submits draft to Prime Minister’s Office PSC reviews recommendations of fiscal links and non government debt reports as soon as possible PSC discusses issue of High Level Advisory Council on debt policy and management Project produces road map as part of final report - Road map shows steps towards creation of debt office covering both domestic and external debt and with back office, middle office and front office functions - by end-March Project Extension Taking into consideration its findings, the team does not have convincing evidence at the time of writing to justify extension of the project The situation should clearly be kept under review, however, through monitoring of the progress in implementing the recommendations indicated above TABLE OF CONTENTS Page Introduction 11 Findings 2.1 Assessment of Progress in meeting Objectives 2.2 Project Management and Implementation 2.3 Issues 17 17 32 35 Recommendations and Action Plan 35 Appendices Summary of Activities (excluding UNCTAD/DMFAS) DMFAS/UNCTAD activities Views of Beneficiaries Details of Questionnaire and Interviewee response Minutes of Meetings Working Agenda List of People Contacted Bibliography 40 45 47 50 60 75 78 80 10 MTR  The Team Mrs Hoa provided remarks on i) TOR: are suitable for the group; however, the group has only partly met its mission This is due to lack of institutional agency for developing debt portfolio (as there is a conflict of MOF and MPI over this issue) ii) Quality and relevance of the technical reports: report in debt portfolio is the first ever report in Vietnam of its type However, in developing the report, many assumptions had been made due to the lack of data on enterprise debt from SBV iii) Usefulness of workshops, training/seminars… Mrs.Yen and Mr Hoa did not participate in any study tours All information/reports on workshops need to be sent to the participants one day before the workshops for them to have opinions and in order to save presentation time Time for the discussion needed to be prolonged; sometime, due to leaders not being able to attend the workshops, the time for discussions had been cut off iv) Project objectives are mostly very relevant, practical and realistic However, much still needed to be done to achieve the objective of strengthening the institutional and legal framework (as the revised degree N.90 can only be issued during the first quarter of 2005) The review of the external debt strategy could not implemented as the database had not been finalised v) Project management quality: organization structure of the project is suitable vi) The project needs to be extended after March 2005, as information on debt needs to be in the website      Mrs Yen and Mr Hoa commented as follows: Debt management does not fully utilize the capacity of the DMFAS The quality of SBV data is not sufficient for entering it into DMFAS Objective of finalising database on DMFAS could not be achieved as not enough data for processing Coordination needed to be improved The project has been provided technical assistance and equipment but the mechanism on debt management in Vietnam is very complex Data on external debt of the government and government guaranteed debt is now OK and has been entered into DMFAS The main problem is the information on foreign debt of enterprise (non-guaranteed debt) Another problem has been that DAF’s debt on lending of ODA is not entered into DMFAS, as the government thinks it is domestic debt It is necessary to consider this debt as foreign debt However, there is a shortage of work force to the job The project should be extended after March 2004, as there is a need to provide software and assistance for storing information on lending 68 7) Meeting with SBV branch in Ho Chi Minh City Date Location Topic Participants Government Agencies MTR Donor PMU 9h20, 11.08.2004 SBV branch in HCMC 1- Ho Tung Mau Str HCMC Note taking of the meeting with SBV staff  Staff of SBV branch from HCMC (department of Debt division): Mr Ho Huu Hanh- Deputy Director of the branch; Mrs Nguyen Thi Minh Lan- Chief of foreign exchange department; Ms Lienstaff of Debt division of the department of the Branch  Mrs Nhung- Central SBV  The Team  Mr Trinh Tien Dung- UNDP  Mrs Hanh- NPM; and Mr P Maurin, IRA The SBV branch had provided to the mission a report on the current situation of reporting on foreign debt of enterprises to the Branch The report is summarised as follows: General situation: According to the regulation N 1432 issued at January 16, 2001, SBV branch has started to register loans and payments for all enterprises located in HCMC area since the end of 2001 In 2003, the Branch had received all documentations of registered loan of enterprises from SBV central By now, the situation of foreign loans at the branch is the following: Indicators Quantity Number of enterprises with registered 414 loans in the area Total Number of loans and their value registered at the branch Including outstanding of number of loans and their value Longest duration of Loan Number of loans registered during 2001-August 2004 843; US $ 254 million 537; and US$ 227 million 30 years 2001 2002 2003 52 194 210 Till August 2004 142 69  Advantages and disadvantages of the monitoring of foreign borrowings and payments at the branch + Before 2004, the branch had used FoxPro software to monitor and report to SBV central (to department of foreign exchange) about enterprises’ foreign borrowing and quarterly payments + The numbers of registered loans of enterprises increased to the point that the software was no longer suitable Therefore, the branch started to use Excel software for monitoring and reporting to SBV central However, the Excel itself could not handle the job due to the following: i) Excel could only aggregate all data of enterprises on a short term basis, such as total loan, principal and interest payments of enterprise A in 1st quarter of 2004 However, it could not monitor all payments of the enterprise during the whole duration of the loan ii) Excel could not calculate the outstanding amount of each enterprise’s loan at any moment In order to that, one needed to enter data many times and that could lead to duplication, time consumption and data errors iii) For an enterprise with many loans of different loan duration, and different time of payments, Excel could not handle the details of each enterprise loan This has created difficulties to the SBV branch in monitoring continuously the whole life of the loan and payment of the enterprises iv) When an enterprise registers its loan at the Branch, it also registers its planned schedule of payment However, Excel could not calculate projections of payment in the future That is why the branch could not determine/estimate the volume of foreign currency that enterprises need to pay back on time v) When an enterprise changes loan interest and loan duration Excel can update those changes, but the old data and information of the loan can no longer be accessed vi) Now all computers of the branch are on a local area network, Excel does not have its password So if a virus affects one computer, then others would be affected also, and the data will be destroyed Another problem could be raised such as any person can go to the data and correct it vii) The foreign exchange department of the branch has many varied activities and works due to its specialization However, the numbers of computers it has is very limited and computers are utilized almost full day So staff specializing in foreign debt not have time and opportunity to get information on foreign debt from the website for improving the capacity of its staff viii) The branch does not have interconnection with central SBV; so that most of the information is sent by hard copies that could problems for others 70  Conclusion of the report: The branch needs to monitor large numbers of enterprises; each enterprise with many different loans and each loan having different duration and plan scheduled for payment For doing a good job of monitoring/managing foreign debt of enterprise in the area, the Branch has recognized the need to have specific software for managing borrowing and payment of foreign debt This software besides meeting all requirements of the Central SBV and branch SBV, needs to fulfill the following requirements: i) make sure of the security of data/information ii) be available to store borrowing and payments of foreign loans of each enterprise iii) Be able to determine debt outstanding of enterprise at any time iv) Project medium and long time future payment of each period of time v) Have basic information about creditors vi) Need to have interlinked networks of computers between SBV central and provincial SBV branches, for sharing information if necessary vii) Avoiding all disadvantages of Excel program as mentioned above  Recommendation of the SBV branch i) ii) iii) Provide and assist the branch with software in foreign debt management, together with computer network Provide training for improving capacity in management of external debt for the Branch Provide computer training and training for Branch staff for utilizing the software 8) Meeting with Mr Hung from State Treasury Department Participators: Mr Hung - Head of Capital Mobilization Department Mr Ru - Vice Head Mr Khang - Expert from International relation department Role of State Treasury Department (STD) relating to external debt management From Mr Hung’s point of view, there are some different government agencies involve in the debt management process in Vietnam today For example, MOF is responsible for ODA, MPI is responsible for monitoring FDI, enterprise debt is monitored by SBV, and some loans of local authorities are managed by MOF Because both domestic debt and external debt are managed by different government agencies, debt management in Vietnam is not effective and efficient The role of State Treasury in 71 external debt management is to prepare for the issue of an international bond on the international capital markets Some issues related to issuing an international bond STD was preparing to issue an international bond from 1994 The period from 1994 - 1998 is the most important stage for this process State Treasury Department took part in some main activities as follows: o Took part in some preparatory activities with securities companies from Japan, US, Holland and Germany o Nomura from Japan and Merlin from US helped STD in setting up plan for issuing international bonds Nomura was the main actor in this process At the end of 1998, the main points of this plan were negotiated and approved STD intended to issue a bond at a value of $ 150 million USD with a maturity of to years in Singapore and Luxemburg at a fixed interest rate An Association of Vietnam International Investors was set up in this period This Association would have guarantor responsibilities At that time, the Asian crisis happened Some international consultants advised that Vietnam should not issue an international bond for the following reasons: o The expected credit rating of Vietnam at that time was very low (around 2B- or B+), meaning that the conditions for issuing an international bond were not good enough If Vietnam issued an international bond, the interest rate would be too high o The domestic capital market at that time was expanding Domestic debt could cover 70-80 percent of total capital needs in the market World Bank and IMF advised that Vietnam should use concessional funding as much as possible * Capacity building for issuing international bonds From 1994 - 1998, Nomura organized training courses for staff of STD funded by the Japanese Government Each training course lasted months with participant each from STD, MPI and MOF The contents of these training courses included stock market, Issuing and managing international bonds, debt management, international capital/financial markets From 1994 to now, STD staff and main managers were involved in study tours to different countries to learn as much as possible about international bonds issuing such as Canada, Turkey, Holland, China, Korea, UK, France, Germany, Thailand, Taiwan, Singapore, Japan and some others Funding of these study tours could be from State Budget of Vietnam or international funds such as JBIC, Nomura and different international projects * Evaluation of credit rating 72 From 1998 to now, many international financial organizations have conducted credit rating assessments in Vietnam Some of them have been independent and some of them have been invited by the Vietnamese government These organizations worked together with STD and MOF to teach their staff about principles and basic theories of credit rating The credit rating of Vietnam at that time was 2B in 1997, 1B in 2000-2001, and 2B in 2002-2003 These ratings were not good enough for issuing international bonds Up to now, there is still no domestic organization which has been conducting credit rating because of lack of capacity and experience The staff of STD have methodologies for conducting credit rating but they cannot evaluate the rating by themselves In June, 2004, a conference on "credit rating principles and methodologies and international experiences" was held by the Vietnamese Association of Financial investors Two Japanese consultants presented papers in this conference 9) Meeting with Mr Cuong from State Budget Department in MOF Role of State Budget Department (SBD) in debt management and its relationship with other departments such as State Treasury and External Finance Department These three departments belong to MOF Their responsibilities are allocated by the Minister of Finance These responsibilities can be changed and converted from time to time depending on the role of MOF in the economy In general, SBD is responsible for budgeting for public debt, both domestic and external In the future, if there is a unified debt management strategy, SBD will play the main role in monitoring the strategy The External Finance Department is responsible for sourcing funds, negotiating and signing contracts with donors The funds can go directly to the state budget or go to a special account The STD monitors disbursement of all public debt and is responsible for debt servicing The Government needs to have a unified debt management strategy which can combine domestic debt and external debt Nowadays, there is lack of suitable coordination between domestic debt management and external debt management Vietnam trys to increase ODA debt as much as possible before thinking about domestic debt In the near future, the Government may want to borrow on commercial terms and become more judicious in deciding how much should be borrowed domestically and how much externally One department should manage both domestic and external debt This would also facilitate the collecting of debt information and its dissemination to the public The role of State Budget department in participating in project VIE 10/010 o Staff participated in seminars and workshops run by the Project to improve knowledge of external debt management o Contribute ideas and opinion on the technical reports prepared by the Project; 73 o Participated in the discussions about the institutional and legal frame work for debt management in Vietnam o Participated in the task force established to revise Decree 90 (1998); Two staff of the department participated in the TDWGs According to Decision 17/2003, the SBD is responsible for reviewing and revising legal documentation related to public debt and for summing up public debt information from STD (domestic), EFD (external) and SBV (external debt of enterprises) Some ideas about the success of the project: The Project has achieved a lot Technical reports prepared by the Project can be used to improve public debt management and non-public debt management in Vietnam The achievement of the Project is a good base for developing and implementing the World Bank Public Financial Management Reform project 74 APPENDIX SIX VIE/10/010-External Debt Management Project Independent mid-term review WORKING AGENDA Date Timing Activity Venue Partici A INFORMATION COLLECTION 4/8 5/8 6/8 13.00 Arrival of the Team Leader 15.3016.15 Meeting with UNDP PO 16.3017.30 17.30+ 08.0013.00 14.0015.30 15.3017.00 Briefing with Madame Phuong & Mr Do 08.30-11.00 14:00 16.00 7&8/8 AM 9/8 PM Briefing with the Int Resident Advisor (IRA) High-level seminar of Debt Project Meeting with Mr Bang, SBV Meeting with Ms Ha, Lead of Fiscal Links TDWG Briefing with the donors on key issues for review Meeting with MPI’ team Meeting with a project coordinator on debt component progress being supported by the WB and other donors20 Weekend21 Meeting with members of the Debt Technical Working Groups (DTWGs) Continuation with the DTWGs Meeting Or review of the information gathered to date Noi Bai airport UNDP meeting room B PMU PMU Melia Hotel PMU PMU to pick up from th Noi Bai Airport Venue: PO, The team The team, Mdm Phuong The team, IRA The team The team, Mr Bang, IR The team, Ms Ha, IRA, UNDP meeting room B MPI Office Project Office The team, UNDP, AusA Mr Cuong of MPI, PO The team, IRA, PO, PM DTWGs, IRA, PM, Hai PMU The Team, IRA, PM, Du Thao 20 Who currently work for the Public Financial Management Reform Project, which is funded by the WB and some bilateral donors 21 This is kept open for now in line with the contract (5-day week) The Team Leader however can decide to make use these weekend days in consultation with the two national consultants, UNDP and PMU 75 10/8 11/8 12/8 8:00 AM 10:30 AM 14.0015.30 15:3016:30 16.00+ 09.0010.00 10.0011.00 13.30 9:0011:30 PM 14:0017:00 Meeting with NPM Meeting with Mr Huy Meeting with SBV (Non-Government TDWG) Additional meeting with the DTWGs as needed and relevant departments of MOF (e.g State Treasury, FDE etc.) or others Meeting with Madame Phuong, DNPD SBV The team, IRA, PM MOF Teleconference with Geneva Meeting with IMF on their perspectives PMU IMF office Meeting with the WB on their perspectives WB office Leaving for HCMC22 Flight VN 225, 15.00/17.00 Working with SBV branch in relation to management and recording of nongovernment (enterprise) debt Meeting with a Joint venture, River Side Hotel The team, IRA, PM The Team, Mdme Phuon The team, IRA, PM The team, IRA, PM The team, IRA, PM, PO No.1 Ho Tung Mau HCMC 15-18 Ton Duc Thang The team, IRA, PM, PO The team, IRA, PM, PO B INFORMATION PROCESSING AND REPORT PREPARATION AND FINALIZATION 13/8 1415/8 16/8 17/8 18/8 9:00 Meeting with Purakawa, Automobile 10:0012:00 Meeting with Garden Plaza Co LTD 16:00 Departure for Hanoi 9:00 10:30 14:00 Weekend (report drafting could be continued if it is required) Meeting with Mr Lam, OOG Meeting with State Strasure Meeting with State Budget Dept MOF 9.00-12.00 Presentation and discussion of preliminary findings and recommendations with the donors Processing Zone Tan Thuan, Dis.7 309-311 Nguyen Van Troi, Phu Nhuan The team, IRA, PM, Mr The Team At OOG 15 Tran Khanh Du MOF The Team UNDP new UNDP, AusAID, Seco, I meeting room 22 This field trip to HCMC will be arranged by the SBV UNDP office will help arrange air-tickets for the mission 76 19/8 20/8 26/8 06/9 15/9 14.00-16.30 Working on the report to incorporate the comments to be made at the above discussions Presentation and discussion of preliminary findings and recommendations with the government counterpart agencies Submission of the Report to UNDP Comments on the draft report to be sent to the TL Submission of a final report At home base The team PMU Members of the Project (Mrs Bang Tam, Mrs P (MOF), Mr Ly (MPI), M Lam (OOG) & Mr Hiep IRA & PM The project parties (the d IRA) The TL 77 APPENDIX SEVEN LIST OF PEOPLE MET Madam Phuong, Director, External Finance Department (EFD) Ministry of Finance (MOF), Deputy National Counterpart Dr Truong Thai Phuong, Director General, EFD, MOF Nguyen Thi Thanh Ha: Head of Fiscal Links TDWG, and Chief of External Debt Division 11, EFD, MOF; Mr Hoa, Head of Debt Portfolio TDWG and Chief, European Division, EFD, MOF Mrs Yen, Head of Institutional and Legal Framework TDWG and Chief of International Financial Institutions Division, EFD, MOF Nguyen Xuan Thao, Deputy Manager, International Financial Institutions Division, EFD, MOF Mr Hai, Head of IT TDWG, and Chief of General Affairs Division, EFD, MOF Mr Huy, DMFAS expert, General Affairs Division, EFD, MOF Nguyen Thi Hong Yen, Chief, International Financial Institutions Division, EFD, MOF Pham Dinh Cuong, Deputy Director of Department, State Budget Department, MOF Mr Hung, Head, Capital Mobilisation Department, State Treasury Department (STD), MOF Mr Ru, Vice Head, Capital Mobilisation Department, STD Mr Khang, Expert from International Relations Department, STD Nguyen The Ngan, Expert, Fiscal and Monetary Department, Ministry of Planning and Investment Mr Ngari, MPI 78 Dinh Nho Bang, Deputy Director, Foreign Exchange Department, State Bank of Vietnam (SBV); Nguyen Van Tiem, Chief of Division, External Debt Management Division, (EDMD) Foreign Exchange Department, SBV; Mrs Nhung, EDMD, SBV Mr Ho Huu Hanh, Deputy Director of Ho Chi Minh City Branch, SBV Mrs Nguyen Thi Minh Lan, Chief of Foreign Exchange Department, HCMC branch, SBV Ms Lien, Staff of Debt Division in Foreign Exchange Department, SBV, HCMC branch Mr Thang, Financial Management Reform Programme (World Bank), MOF Ms Susan Adams, Senior Resident Representative, IMF Duong Hong Loan, Senior Programme Manager, (Development Cooperation), Australian Embassy Richard Jones, Project Coordinator, VIE/02/008, The Committee for Economic and Budgetary Affairs of the National Assembly 79 APPENDIX EIGHT Bibliography Monitoring and Evaluation Strategy and Base Line Survey, VIE 10/010, July 2003 Circulars/Decisions  Decision 26, 2000 on overall annual commercial external debt ceilings for enterprises  Decision 96, 2000 on guidance on process and procedures for ODA capital withdrawal  Decision 02, 2000 on regulation on subtending of Government’s foreign loan/aid capital  Decision 233, 1999 on regulation of government guarantee of foreign loans of enterprises and credit institutions; also Decision 231, 1999 on DAF  Decision 72, 1999 on Accumulation Fund for foreign debt repayment  Circular 06, 2001 on implementation of regulation on management and use of ODA (also Circular 42, 2000 and Circular 81, 1998) Decrees/Laws                   State Budget Law, 2002 Law on Enterprises, 1999 Law on Credit Institutions, 1997 Law on SBV, 1997; amended in Order 19, 2003 Law on Foreign Investment, 1996 Decree 106, April 2004 on Development Investment Credit of the State (mainly DAF) Decree 77, 2003 on organization of MOF Decree 61, 2003 on organization and structure of MPI Decree 52, 2003 on Organization of SBV Decree 17, 2001 on use of ODA Decree 64, 2002 on transformation of state owned enterprises into joint stock companies Decree 01, 2000 on issuance of govt bonds; supersedes Decree 23, 1995 Decree 166, 1999 on financial regulations for credit organizations Decree 50, 1999 on DAF Decree 43, 1999 on State’s Development Credits Decree 90, 1998: on control of foreign loans and loan repayments Decree 63, 1998 on Foreign Exchange Management Decree 12, 1997 on implementing of law on foreign investment 80  Decree 233, 1999 on government guarantees on loans to enterprises and credit institutions Project Reports  Institutional and Legal Framework, October, 2003  Debt Portfolio Review, October, 2003  Fiscal Links Report, June, 2003  Non Government Debt Report, June, 2003  Progress reports: quarterly and annual  Quarterly Newsletters UNCTAD:  Technical Cooperation Mission Report (TCMR), #3, July 2003, training mission  TCMR, #5, May, 2004  TCMR, training mission, Oct 2003  TCMR, # 2, technical mission, April 2003  TCMR, #1, April, 2003, update on Monitoring and Evaluation Strategy and Baseline Survey  TCMR, May, 2002, MES and BSL  TCMR 2001 on Capacity Development  TCMR: Implementation of DMFAS in SBV, July, 2001  First UNCTAD mission, 1996  Questionnaire on use of DMFAS IMF guidelines for Public Debt Management, March 2001 Challenges of Fiscal Risks in Transition Countries, by World Bank 81 82 ... Whatever the outcome of the revision of Decree 90, the MOF will have a pivotal role in external debt management The database and debt sustainability software reside there and much of debt policy... Finance Management Reform Project (PFMRP) A list of officials met is provided in Appendix Seven The relevance of PFMRP is that the third component of the project covers the strengthening of debt management, ... to date and the results expected by the end of the project The improvement in external debt management capacity is in terms of the greater ability of staff at the technical level, the increased