Vietnam has a vision. By 2035, it aspires to become a prosperous, creative, equitable and democratic nation. Achieving this ambitious goal has set Vietnam on a path of transformation on multiple fronts – economic, social, and political.
At the core of this transformation is the re-orientation of the state’s role in economic management. This requires adapting Vietnam’s economic governance so that the state becomes a skilled facilitator of three types of relationships: among government agencies, between the state and market, and between the state and citizens.
Not too long ago, Malaysia walked in Vietnam’s shoes, implementing its own wide-ranging transformation. In 2009, Malaysia embarked on the National Transformation Program (NTP) that included focus on both government and economic transformations. Malaysia had also adopted good practices that simplified regulations, which made it easier for firms to interact with the state.
As Mongolia suffers with economic instability due to external and internal circumstances, how can we improve performance of basic public services in a way that works well in the Mongolian context but also brings sustained outcomes?
By the end of FY16, China National Audit Office (CNAO), the SAI in China, had successfully completed its third year of integrated financial and procurement audits for 27 Bank financed projects and accounting for 28% of the total active portfolio of China. This is a big leap from only 3 projects in the first year of FY14.
Rome was not built in a day. CNAO has been the external auditor of all Bank-financed projects in China since 1984. It conducts project audits in accordance with the Government Auditing Standards of the P.R. China and the International Standards on Auditing. The Foreign Funds Application Audit Department and the Audit Service Center of CNAO, and the Provincial Audit Institutions conduct audits on Bank financed projects and issue the audit reports in their names. There are about 120-130 financial audit reports submitted to the Bank every year. CNAO's audit reports not only include the auditor's opinion on project financial statements, they also include opinions on procurement compliance as this is an important aspect of the review of the eligibility of expenditures. This procedure is in full compliance with the Audit Law of P. R. China, which requires auditing of authenticity, legality and beneficial results of the budgetary revenues and expenditures or financial revenues and expenditures of public funds. It was under this context that in FY 14, we started piloting the use of CNAO for integrated financial and procurement audits in some Bank-financed projects.
This week, more than fifty donor governments and representatives of borrowing member countries are gathering in Nay Pyi Taw to discuss how the World Bank’s International Development Association (IDA) can continue to help the world’s poorest countries.
IDA financing helps the world’s 77 poorest countries address big development issues. With IDA’s help, hundreds of millions of people have escaped poverty. This has been done through the creation of jobs, access to clean water, schools, roads, nutrition, electricity and more. During the past five years, IDA funding helped immunize 205 million children globally, provided access to better water sources for 50 million and access to health services for 413 million people.
Malaysia has been able to reach remarkable achievements over the past decades, including extreme poverty eradication and promotion of inclusive growth. It aims to reach a high-income nation status by 2020, which goes beyond merely reaching a per capita GDP threshold. As the 11th Malaysia Plan points out, the goal is to achieve a growth path that is sustainable over time, reflects greater productivity, and is inclusive. High-income status can be achieved if we ensure that future generations have access to all the resources, such as education and productive opportunities, necessary to realize their ambitions and if Malaysia’s economy is globally competitive and resource-sustainable.
Over the years, immigrants have played a crucial role in the economic development of Malaysia, with around 2.1 million immigrants registered and over 1 million undocumented as of 2013. Education levels among the Malaysian population have increased remarkably over the last two decades, and immigrant workers have become one of the primary sources of labor for low-skilled occupations, most commonly in labor-intensive sectors such as construction, agriculture and manufacturing. Economic studies show that a 10% net increase in low-skilled foreign workers could raise Malaysia’s GDP by 1.1% and create employment and increase wages for most Malaysians.
Last week, I had the opportunity to attend the Singapore Urban Week along with other colleagues from the World Bank Beijing office, as well as delegates from China’s national government and participating cities. For all of us, this trip to Singapore was an eye-opening experience that highlighted the essential role of integrated urban planning in building sustainable cities, and provided practical solutions that can be readily adapted to help achieve each city’s own development vision. A couple of key lessons learned:
Putting people at the center of development strategies
This is only possible when planners always keep in mind people’s daily experience of urban space and invite them as part of decision-making process through citizen engagement.
For instance, in many cities, public transit has been perceived as a low-end, unattractive option of travel, causing ridership to stagnate despite severe traffic congestion. But in Singapore, public transit accounts for 2/3 of the total travel modal share in 2014. Moving around the city by metro is comfortable and efficient because transfers between different modes and lines are easy, with clear signage of directions, air-conditioned connecting corridors, and considerate spatial designs and facilities for the elderly and physically-challenged users. In addition, metro stations are co-located with major retail and commercial activities and other urban amenities, significantly reducing last-mile connectivity issues.
Vietnam has achieved remarkably high and inclusive GDP growth since the late 1980s. GDP growth per capita increased three-and-a-half-fold during 1991-2012, a performance surpassed only by China. The distribution of growth has been as remarkable as its pace: the bottom 40% of the population’s share in national income has remained virtually unchanged since the early 1990s, ensuring that the rapid income gains got translated into shared prosperity and significant poverty reduction.
GDP growth, however, has been operating on a lower trajectory since 2008. This has led to questions regarding the sustainability of the growth process, and, with it, Vietnam’s ability to bounce back to about 7-8% per capita growth. Analysts have voiced concerns over declining total factor productivity growth and growing reliance on capital accumulation. Moreover, a number of competitiveness issues routinely get raised by private investors, including: a widening skills gap, limited access to finance, relatively high trade and transport logistics costs, an overbearing presence of the SOEs, and heavy government bureaucracy that makes it difficult for businesses to operate in Vietnam.
Kể từ cuối thập kỷ 80 của thế kỷ trước, Việt Nam đã có tốc độ tăng trưởng kinh tế cao với lợi ích bao trùm. GDP bình quân đầu người tăng 3,5 lần trong giai đoạn 1991-2012 — chỉ sau Trung Quốc. Cùng với tốc độ tăng trưởng, phân bố tăng trưởng cũng là một thành tích rất đáng ghi nhận: phần thu nhập quốc gia dành cho nhóm 40% dân nghèo nhất hầu như không thay đổi kể từ đầu thập kỷ 1990 tới nay, điều này đảm bảo rằng tăng trưởng kinh tế được phân phối cho mọi tầng lớp và giảm nghèo một cách đáng kể.
Tuy nhiên, kể từ 2008, tăng trưởng GDP đã đi theo một quỹ đạo thấp hơn. Qua đó đã nảy sinh một số câu hỏi về mức độ bền vững của tăng trưởng và liệu Việt Nam có thể khôi phục mức tăng GDP bình quân đầu người 7-8% hay không. Các nhà phân tích quan ngại về xu thế giảm tăng trưởng năng suất nhân tố tổng hợp và mức độ phụ thuộc ngày càng nhiều vào tích tụ vốn. Thêm vào đó, các nhà đầu tư tư nhân cũng thường xuyên nêu các vấn đề liên quan đến năng lực cạnh tranh như kỹ năng ngày càng thiếu, khó tiếp cận vốn, chi phí thương mại và kho vận tương đối cao, độc quyền của các doanh nghiệp nhà nước và bộ máy hành chính cồng kềnh gây cản trở hoạt động của doanh nghiệp.