The workshop held in Hanoi on August 23.

Models for a public debt management agency are diverse, and there are also many different debt management approaches and methods around the world, experts told the workshop held by the Ministry of Finance, the International Monetary Fund (IMF), the World Bank (WB), and the Swiss State Secretariat for Economic Affairs.

Many countries have set up debt management offices (DMOs) where debt management functions are concentrated to highly professionalise the work, they said, noting that the formation of DMOs is meant to ensure consistent, concerted, and all-round control of risks of borrowing, along with the implementation of the Government’s debt management policies and repayment plans.

Deputy Minister of Finance Nguyen Duc Chi said in Vietnam, the public debt management policy is connected with the fiscal and monetary ones. However, it has just focused on the mobilisation of concessional loans and those made according to international practices, but yet to fully monitor and assess all borrowings and debt transactions.

As the country’s economic stature has improved much and the accessibility to concessional loans will decline, more debt-related risks will occur, which requires uniform, consistent, and professionalised management to promote policymaking efficiency and achieve an appropriate structure of public debt expenses and risks, he said.

The official recognised the necessity to develop a DMO that matches international practices and Vietnam’s development level and management demand.

Francois Painchaud, IMF Resident Representative in Vietnam, said the country has recorded fruitful public debt management as seen in the debt-to-GDP ratio reducing to over 40% in 2021 from over 60% in 2017 thanks to prudent fiscal policies.

But there remain many challenges since public debt management is still conducted by different agencies such as the Debt Management and External Finance Department and the State Budget Department of the Finance Ministry, and the State Treasury.

This will lead to inconsistency in policy making and implementation, he pointed out, recommending relevant agencies re-organise regulations and mechanisms to guarantee consistent debt management.

Data from the Finance Ministry showed that the public debt-to-GDP ratio has fallen over the last six years, to 43.1% (157 billion USD) in 2021 from 62.2% in 2016. Domestic debt increased considerably to account for 67.2% (2.2 quadrillion VND) of the Government debt at the end of 2021 while foreign debt has tended to decrease./.