HCMC seeks long-term autonomy to meet development demand

In November 2017, Vietnam’s economic hub HCMC was granted extra autonomous decision-making power to help it develop to its full potential as per Resolution 54 passed by the National Assembly (NA), the national legislative body.

Under the resolution, which entered effect from January 2018 to end-2022, the city could raise and add additional fees and charges to regulate its residents’ behavior and increase budget revenue, make changes to the tax collection policy, raise the income of cadres and civil servants, and decide on land-use changes for farmland.

“The pilot period is too short for the scheme to have a significant impact,” the city’s Deputy Chairman Vo Van Hoan told a conference on Wednesday.

Until now, the city has yet to make full use of the mechanism and has not increased budget revenue as expected.

HCMC has a “huge” demand for investment and development but financial resources are limited, said Hoan.

The central government had approved a public investment capital of more than VND140 trillion ($6 billion) for the city in the 2021-2025 period.

“The sum is only enough for projects that had already been approved in the 2016-2020 term. For the ongoing term, no projects had been funded,” he said.

Hoan said the city is working on a proposal on making draft adjustments to the resolution, in which the city asked the parliament to grant it long-term autonomy exceeding the five-year pilot period.

The city wants to have its own mechanism in different areas, including investment, finance and budget management, urban area development, environment protection, decentralization as well as a separate mechanism for Thu Duc City.

It is expected that by the end of this year, the proposal would be submitted to the NA for consideration.

Attending the conferment, economist Tran Du Lich, a member of the Government Advisory Group, said for decentralization, ministries and the central government should only act in the role of inspection when it comes to construction projects, and leave the city more power to decide for its own, to avoid complicated administrative procedures.

Tran Hoang Ngan, director of the municipal Institute of Development and Research, said last month that HCMC still has many things to do and that it might not even have used half the mechanisms granted by the resolution.

“The city has not been able to take full advantage of the resolution because of the Covid-19 pandemic. It needs two more years to make a more standard assessment,” he said.

Ngan said the problems that have not been resolved, like earnings from the equitization of state-owned companies or public property auction proceeds, are mostly “due to the complicated legal procedures that apply across the country, not just in HCMC.”

Therefore, the city should make proposals to the NA and have such obstacles removed, he added.