TẠP CHi cht THffiM ENHNACING THE EFFICIENCY OF DECENTRALIZATION OF PUBLIC INVESTMENT MANAGEMENT IN THAI NGUYEN PROVINCE • NGO NGAN HA Abstract: Public investment plays an important role in Thai Nguyen Province’s development It does not only contribute to promote the provincial socio-economic but also support the provincial infrastructure development and boost the labor productivity Besides achieved encouraging results, public investment in Thai Nguyen Province still exists many limitations, especially a low investment efficiency The inadequacy in decentralization of public investment management between the central government and local government is one of main resasons for this issue This paper presents the limitations and causes in the decentralization of public investment management in Thai Nguyen Province Based on the paper’s findings, some recommendations are proposed to enhnace the efficiency of decentralization of public investment management in Thai Nguyen Province in the coming time Keywords: public investment, decentralization, Thai Nguyen Province Introduction Thai Nguyen is a northern midland and mountainous province Total public investment capital reached 7637.3 billion VND in 2020 Over the years, public investment in Thai Nguyen Province has made great economic contributions which improved the quality of local people’s lives In order to increase the efficiency of public investment, local government has focused on improving public investment management decentralization Therefore, the decentralization of public investment management in Thai Nguyen Province during the time has changed positively, especially promoting the dynamism, creativity, autonomy and self-responsibility of the authorities at all levels However, in general, the decentralization of public investment management in Thai Nguyen Province has not met the requirements of reality yet and revealed many limitations such as promulgating in legal documents, state legal policies on decentralization of public investment management 27Ĩ SƠ 14 - Tháng Ĩ/2021 are not synchronized, lack of consultation of local organizations and people Besides, allocation of capital sources is spreading; planning the public investment to lower governments has the existence of equilibrium; public investment decisions are still subjective and appraisal methods are limited In addition, the implementation of public investment projects of the local government has many inadequacies and lack of competitiveness in bidding Common project adjustment does not pay attention to the issue of operation In the scope of this article, through secondary data, this research focus on analyzing the situation of decentralization of public investment management and proposing solutions to improve decentralization of public investment management in Thai Nguyen Province Situation of public investment in Thai Nguy en Province The growth rate ofpublic investment capital: Public investment capital in Thai Nguyen QUẢN TRỊ QUẢN LÝ Province tends to grow unstably in the period from 2014 - 2020 It is worth noting that public investment capital decreases gradually, with an average decline rate of 2.4% / year However, from the year 2017 onwards, public investment capital has risen again with a growth rate of 13.7% / year This is due to that the local government has well implemented the policy that analyzing and promoting the restructure of public investment, reengineering state-owned enterprises in the direction of divesting capital in industries, sectors which are not directed by the Government of Vietnam Chart Growth rate of public investment capital in Thai Nguyen province in the period from 2014- 2020 Source: Statistics Office of Thai Nguyen Province The structure ofpublic investment capital: In the period from 2014 - 2020, public investment capital from the state budget accounted for a very large proportion in the structure of public investment capital, by an average of 65.6% Even in 2018, 2019 and 2020, the public investment capital from the state budget accounted for more than 90% of the total public investment capital This capital source is mainly formed from the State budget's revenues through the collection of taxes, fees, charges, selling resources, etc The structure of public investment capital is shown in the following chart: Achievements and limitations of decen tralized public investment management in Thai Nguyen province Through the transfer of authority and responsibility for public investment management from the central government to local government, decentralization of public investment management in Thai Nguyen Province has achieved the following results: Firstly, decentralization of public investment management has created the initiative for localities in socio-economic development, actively exploited Chart structure of public investment capital in Thai Nguyen Province in the period from 2014- 2020 Unit: billion VND 8000 7000 6000 5000 4000 3000 2000 1000 ■ Other capital 2014 76.18 2015 22.1 Investments from SOEs 155.198 1247.6 ■ Loans ■ State budget capital 2577.7 792.5 2016 23.5 017 58.2 2018 64 019 85 020 465.4 640.9 28.3 88.7 25.2 83.2 1227.7 503.1 391.2 292.9 1098.4 161 6.8 224.6 2304.4 3801.5 5858.2 5410.2 5990.3 SỐ14-Tháng Ĩ/2021 277 TẠP CHÍ CƠNG THựựNG internal resources and partially limited the conception of depending on the budget of upper level for local socio-economic development At the same time, it reduces the burden on state management agencies at the provincial level It creates favorable conditions for departments of the province to spend time and human resources advising on major policies and important decisions on local socio-economic development Secondly, the decentralization of public investment management has improved the lives of local people and promoted the local socio-economic development The decentralization of public investment management has facilitated to complete many important tasks, many works, project which directly affects the economic development of the locality The infrastructure has been gradually upgraded Transportation infrastructure has developed dramatically over the years Transportation infrastructure system connecting regions is increasingly completed and it’s convenient for trading In 2020, Thai Nguyen Province had a total of about 13,132 km of roads including one highway Hanoi - Thai Nguyen, one front-line Thai Nguyen Cho Moi expressway, the national highway has five routes: National Road 7, National Road IB, Highway 3, National Highway 17, National Highway 3C and National Highway 37; Road 229 has six routes with a total length of 184.4 km; 21 provincial roads are 435.8 km long; 73 district roads with the length of 791.66km; 1,315 km of communal and inter commune roads, etc., thus promoting economic growth in Thai Nguyen Province, creating favorable conditions for non-state economic sectors to develop and improve people's lives The irrigation infrastructure system which was enhanced has significantly contributed to promoting the development of agriculture and rural areas and basically satisfying the water demand for the tertiary industry and urban areas Many urban infrastructure projects such as transportation, water supply, drainage, lighting, greenery, solid waste collection and treatment have been renovated, upgraded and newly constructed Besides, it’s necessary to restructure the agricultural sector in the direction of increasing added value which is associated with building a new countryside and reorganizing production Changing the structure of crops and animals towards the high-value productions and 278 So 14 - Tháng Ó/2021 creating the link between farmers - businesses scientists - managers are obvious to be considered In addition, government needs to implement a few projects such as forming areas specialized in the production of safe vegetables, expanding acreage areas, and increasing high-value aquaculture products In the period from 2014 - 2020, the provincial and district - level authorities in Thai Nguyen Province spent 1741.4 billion VND to invest in the development of health infrastructure including 14 provincial hospitals have been renovated and upgraded, basically building more than 20 nursing and functional rehabilitation hospitals and district clinics The provincial and district - level authorities in the province have launched a program which solidifies schools and more than 3,000 standard classrooms were solidified This leads to the improvement in the quality of education and the local socio-economic development Technology infrastructure is built widely and modernly Information network rapidly develops with wide coverage, connecting with large throughput to areas in the country Media and technology which become disseminated are applied in many fields, as the result they contribute to the increase of the province's GRDP From these achievements of decentralization of public investment management, the quality of people’s lives has been significantly increased, at the same time the people's responsibility for the community supervision and the protection of investment projects in the area has also been raised markedly Although the decentralization of public investment management in Thai Nguyen Province in the period of 2014 - 2020 has achieved positive results, there are still some limitations that need to be resolved, including: Firstly, the decentralization of public investment management in Thai Nguyen Province is almost entirely delegated to the provincial and district levels (especially the work of approving, appraising and making public investment decisions) While the issuance of investment decisions is still arbitrary, the inspection and supervision of authorities at all levels are sometimes formal and administrative, so the macro adjustment of decentralized investment management lacks effectiveness Secondly, the fiscal discipline in the QUẢN TRỊ QUẢN LÝ decentralization of public investment management is not really strict And the central government still "satisfy the demand" to fill the capital needs for the provincial level, and the provincial level does for the districts The allocation of budget between the levels is getting transparent However, the criteria and norms of decentralized capital allocation for public investment management still have many shortcomings Besides, the localities at lower levels have not really been proactive in mobilizing capital The situation of reliance on the assistance of the provincial level is common Thirdly, in the process of decentralization public investment, many projects have not met the requirements yet Many items and constructions are of poor quality, often degraded after being put into use Besides, many projects which are completed have not been accepted by local people such as the public sanitation on the central road of Thai Nguyen City, many cultural houses in the wards,.etc The above-mentioned limitations stem from many different reasons including: • Objective reasons: Firstly, the State's decentralized viewpoint In spite of emphasizing the policy of decentralization, increasing dynamism, creativity, autonomy, and self-responsibility of the local government, the current main viewpoint is still to strengthen centralization and unification in politics and state management The specific manifestation of this ideology is the principle of "decentralizing from top to bottom" so decentralization to the local government is still not really thorough Secondly, the policy has not synchronized Adopting the same policy in most provinces has made the local government less flexible in resource mobilization and the local government can’t develop innovative policies The fiscal decentralization has been expanded, but it has not kept up with and synchronized with the content of public investment management decentralization The local government is assigned a lot of authorities and responsibilities in public investment management, but the revenue and expenditure are not expanding proportionally so the local government is ineligible to implement the assigned works Finally, there is a lack of regulation guidelines to implement the investment management decentralization Currently in Vietnam, there are no particular documents relating to the public investment management decentralization, and the guidelines are scattered in many different legal documents This leads to obstacles in monitoring and launching • Subjective causes: Firstly, the transparency of information in the public investment management decentralization is not at a high level According to the PAPI data over the years, the proportion of local people who are not aware of land-using plans (in which lands are used to build public constructions and projects) That leads to the difficulties for people to approach the public investment programs in order to give opinions as well as to check and supervise the public investment projects Secondly, the accountability of local authorities is not high for both the accountability of the authorities at all levels to the local people and the accountability to the central level The degree of compliance by local authorities to the central government's public investment decision (also known as accountability to the upper level) is limited as Thai Nguyen Province is frequently on the list of delayed units submit reports to the Ministry of Planning and Investment According to the accountability index in the PAPI indicators of Thai Nguyen Province shows that the accountability tends to decrease It indicates that the recommendations and denunciations of local people to the authorities at all levels (about public investment projects) have not been satisfactorily responded by local authorities yet Finally, the resources are limited More resources are a prerequisite for implementing the local responsibilities which are decentralized extra However, over the years, Thai Nguyen Province, like many other provinces in the country, has not been able to balance the local budget by itself The revenue is not stable but the rate of expenditure is high Therefore, the budget of province still depends on the transfers from the central government That leads to the increase of reliance on the central level in Thai Nguyen Province Since then, the budget for public investment management decentralization will also be affected The limitations in public investment management decentralization are ultimately the weakness of state management officers There still exists shortcomings in both quantity and quality, and the structure is not guaranteed, leading to errors in the process of implementing tasks In addition, there is a lack of So 14 - Tháng 6/2021 279 TẠP CHÍ CƠN6 THựựNG morality such as taking advantage of loopholes in mechanisms and policies, using positions to corrupt which causes loss and wastes public investment capital Some recommendations to improve public investment management decentralization in Thai Nguyen Province Firstly, it’s necessary to decentralizing transparently in public investment management towards completing a more independent public investment management system for all levels of government in the province This will facilitate giving full accountability to each level of government, overcome the high hierarchy and integration of public investment management decentralization and encourage the local government to exploit its strength Secondly, improving local authority’s autonomy to increase revenue in order to have expenditure is an objective requirement consistent with the demands of public investment management decentralization At the same time, it currently makes the revenue more commensurate with the expenditure of local government Therefore, the province needs to agree to decentralize basically revenue and expenditure to the district and commune levels and gives each of these levels a certain autonomy in revenue and expenditure at their level Besides, it’s important to improve the capability of decentralizing the public investment management at each level that is commensurate with their roles in local state management Clear legal delineation in revenue and expenditure for each level will create initiative in mid-term and long-term budget planning In addition, encouraging all levels of government to pay attention to revenue needs also to be considered In order to increase lower level’s revenue, the local government’s autonomy in tax is a concern According to the world’s point, the local government can set its own tax in some types of taxes However, in Vietnam, it is not feasible to let local government set their own taxes because this could create tax competition among localities However, it is possible to consider allowing local governments to decide on tax or fees for some specific service taxes The local government's revenue autonomy in public investment management is also enhanced by giving the local government more authority to decide and collect fees and charges in the local area These revenues are usually not large in the total budget revenues of the province The main purpose is making lower authorities be more proactive without 280 SỐ14-Tháng 6/2021 affecting the state budget revenues of the province Thirdly, improving the transparency and accountability in public investment management decentralization at local levels The promotion of public investment decentralization can achieve the goal if only it is associated with improving the transparency and accountability in using decentralized public investment capital in the locality Appropriate mechanisms should be in place to strengthen the inspection of the competent authorities to ensure the effectiveness of the public investment management decentralization In particular, it is necessary to promote the role of elected bodies and of the State Improving the accountability of each level of government in the public investment management decentralization not only to the superiors but to the People's Council and people at that local level Finally, the local government needs to focus on training state management officers in public investment management associated with the effective and practical methods In order to improve their capacity, the local government needs to regularly let state management officers attend short-term and long-term training courses In addition, it is necessary to improve the morality of local managers, avoid corrupting in the public investment management process The local government should intensify the propaganda, dissemination and education about anti-corruption laws for cadres, civil servants and public employees working in departments, sectors, investors, and project management which is directly related to the state management of public investment in the locality Conclusion Public investment management decentralization is a major policy of the Party and State to enhance the autonomy, creativity and self-determination of the local government, thereby improving the efficiency of publicinvestmentandthesocio-economicdevelopment in the locality and the whole country Thai Nguyen is the northern midland and mountainous province, the center of socio-economic development in the northern midland and mountainous region Over the years, the public investment management decentralization has been carried out according to the Party and State's guidelines and gradually obtained positive results However, with many changes in the domestic and international context, it’s getting important to improve the public investment management decentralization in Thai Nguyen province^ QUẢN TRỊ QUẢN LÝ REFERENCE Vu Thanh Tu Anh (2012) Public investment management and decentralization - the situation in Vietnam and the international experience Vietnam: Fulbright University Vietnam Tran Kim Chung (2015) Restructuring public investment Hanoi: Finance Publishing House Nguyen Van Dai (2017), Some models of decentralization of state administration management in the world and suggestions for Vietnam, Journal ofEuropean Studies, No 09, p 37-48 Statistics Office of Thai Nguyen Province (2020) Thai Nguyen Statistical Yearbook 2020 Hanoi: Statistical Publishing House Receiving date: March 10,2021 Reviewing date: March 25,2021 Accepting date: April 10, 2021 Author’s information: Master NGO NGAN HA Thuongmai University NÂNG CAO HIỆU QUẢ PHÂN CẤP QUẢN LÝ ĐẨU Tư CÔNG TREN ĐỊA BÀN TỈNH THÁI NGUN • Th.s NGƠ NGÂN HÀ Đại học Thương Mại TĨM TẮT: Đầu tư cơng có vai frị quan trọng phát triển tinh Thái Ngun Đầu tư cơng khơng góp phân thay đơi kinh tê - xã hội mà nâng cao sở hạ tầng kỹ thuật suât lao động tỉnh Thái Ngun Bên cạnh đóng góp tích cực đó, đâu tư cơng địa bàn tỉnh Thái Nguyên tồn nhiều hạn chế, hiệu đầu tư mức tháp Sự bất cập phân cấp quản lý đầu tư công Trung ương địa phương frong nguyên nhân dẫn đến hạn chế Bài viết trình bày hạn chế nguyên nhân hạn chê phân câp quản lý đâu tư công tỉnh Thái Nguyên; đồng thời đề xuất sô kiên nghị nhăm nâng cao hiệu phân câp quản lý đâu tư công địa bàn tỉnh Thái Ngun Từ khóa: đầu tư cơng, phân cấp, tỉnh Thái Nguyên SỐ 14 - Tháng 6/2021 281 ... University NÂNG CAO HIỆU QUẢ PHÂN CẤP QUẢN LÝ ĐẨU Tư CÔNG TREN ĐỊA BÀN TỈNH THÁI NGUN • Th.s NGƠ NGÂN HÀ Đại học Thương Mại TĨM TẮT: Đầu tư cơng có vai frị quan trọng phát triển tinh Thái Ngun Đầu tư. .. Sự bất cập phân cấp quản lý đầu tư công Trung ương địa phương frong nguyên nhân dẫn đến hạn chế Bài viết trình bày hạn chế nguyên nhân hạn chê phân câp quản lý đâu tư công tỉnh Thái Nguyên; đồng... Nguyên; đồng thời đề xuất sô kiên nghị nhăm nâng cao hiệu phân câp quản lý đâu tư công địa bàn tỉnh Thái Ngun Từ khóa: đầu tư cơng, phân cấp, tỉnh Thái Nguyên SỐ 14 - Tháng 6/2021 281