According to ESOMAR market research:
Vietnam to implement biggest government cuts in 30 years
Vietnam plans to reduce the size of its cabinet, government agencies and civil servants by about 20%.
Under the plan, Vietnam will abolish five cabinet agencies and merge the finance, planning and investment agencies.
Four government agencies, including the State Capital Management Committee, will be abolished.
Five national TV channels, 10 newspapers and 19 magazines will close.
The ministries of defense, public security, justice, foreign affairs and industry and trade are expected to remain unchanged.
The Government Office, the Government Inspectorate and the State Bank will undergo internal streamlining.
Officials from each ministry must submit a reorganization report by the end of January, which will be approved at a
special session of the Communist Party of Vietnam Central Committee and the National Assembly in February.
The plan is seen as an antidote to a bloated bureaucracy, cutting red tape and cutting unnecessary spending
by local governments. “This is a very urgent problem that needs to be solved urgently,”
Tou Lin, general secretary of the Communist Party of Vietnam, said in December. “Sometimes we have to take
bitter medicine, endure pain, and remove the tumor to have a healthy and strong body.”
Currently, about 70 percent of Vietnam’s national budget is used to pay civil servants and regular state spending,
leaving insufficient funds for investment projects. “If we just use this money to feed ourselves,
we will not be able to develop important infrastructure,” Surin said in October.
It is unclear how many jobs will be lost, but it is clear that civil servants are under a lot of pressure.
Vietnam's Deputy Prime Minister Nguyen Hoa Binh said the downsizing plan could affect up to 100,000 jobs.
Concerns over the plan to cut costs lead to administrative deadlock
Businesses have cautiously welcomed the change, fearing it could stall decision-making and lead to months of administrative deadlock.
"The streamlining of agencies may slow things down or delay them for a few months, but it will reduce the
burden on the national budget and is expected to improve the efficiency of state organizations," said Le Dang Anh,
a Vietnamese economist and former government adviser.
According to Thanh Nien Daily, the Ministry of Home Affairs said it would need about VND130 trillion
(about S$7 billion) in severance pay to help civil servants cope with unemployment.
“This is not something that can be achieved quickly and easily, and it can be burdensome at first,”
said Vietnamese economist Nguyen Tri Hieu. “Many government officials have to take on more tasks,
but they may not have some of the professional requirements.”
Vietnam’s “Melting Pot” anti-corruption campaign has been underway for years.
“The anti-corruption campaign has weakened provincial power and purged opposition officials,”
said Nguyen Hac Giang, a researcher at Singapore’s Yusof Issa Institute of Southeast Asian Studies.
“It is necessary to achieve Vietnam’s future, which is to become a high-income country by 2045.”
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