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Hanoi is good example of financial autonomy for new rural development

The models applied by Hanoi are believed key takeaways for other localities in the new rural development.

Sufficient financial resources are believed to result in significant changes in the new rural development program in Hanoi. The models applied by Hanoi should be key takeaways for other localities in this field. 

 Tran Nhat Lam, Vice Chief of the National Coordination Office of the National Target Program on New Rural Development

Tran Nhat Lam, Vice Chief of the National Coordination Office of the National Target Program on New Rural Development, shared with The Hanoi Times about the creative ways that Hanoi has taken to ensure efficient aid for poor-condition areas.

Hanoi's rural areas were in poor conditions when the city initiated the new rural development program. What do you think of this assessment?

At the time of Hanoi's expansion in 2008, the city had the highest number of communes and districts in need of undertaking the new rural development program in the country. After the expansion, the city was no longer a Red River delta region, but also a mountainous and middle land. Hanoi's rural communes and districts are very different in terms of socio-economic development.

Furthermore, when the National Target Program on New Rural Development was first initiated and implemented in August 2008, Hanoi was among the localities that were to be financially autonomous. That means the capital city has not been allocated a dime from the state budget for its new rural development program to finance it from its own budget and that is the main difference between Hanoi and other provinces and cities.

In regard to self-sustaining resources, Hanoi has requested urban districts to allocate resources for poor-condition areas to implement the new rural development program. How do you evaluate the measure?

Several provinces and cities have undertaken the “internal budget allocation” in different ways. Some of them empower districts to allocate their budgets. In this way, district authorities will find resources to support disadvantaged rural areas through various means, such as land auctions.

The view of a commune in Hanoi after the rural development program. Photo: Lam Nguyen /The Hanoi Times

If the revenue from land auctions exceeds the planned plan, the province may allow the district to keep the surplus for reinvestment in rural development activities. Large cities such as Da Nang and HCM City and the provinces of Ha Tinh, Thanh Hoa, Ha Nam, Hung Yen and Hai Duong are the localities that have been doing so for years.

Hanoi may be the first locality to request districts to finance disadvantaged communes with resources from its own budget to implement the new rural development program. Hanoi's way may be old, but the form of financial assistance is quite new. It demonstrates the flexibility of Hanoi's policies in the circumstance that the central government has not funded the city to implement its new rural development activities.

Hanoi has achieved good outcomes with its method. Do you think other provinces and cities should follow?

Other provinces and cities can get the same as Hanoi. The key is that each province and city must find a large source of funding while allocating the budget to other socio-economic priorities. Again, I think it is feasible for provinces and cities to adopt the Hanoi method, but the allocations for the program will depend on the size of their budgets.

The provincial People's Council plays an important role in the allocation of financial resources. If many activities are carried out at the same time, insufficient budget may result. Therefore, disadvantaged rural areas should be classified according to a specific set of rules so that the use of district budgets is appropriate and efficient, and no commune is left behind.

What are recommendations for other provinces and cities?

For other provinces and cities to follow Hanoi's path, the city will take stock of its work so that other provinces and cities can learn from the capital city's experiences.

In 2016-2020, the central government will cut its financial support to provinces and cities from VND63 trillion ($2.5 billion) to VND30 trillion for the implementation of the new rural development program. This requires localities to be flexible and find different resources to implement the program.

Thank you for your time!