REVIEW
of
FINANCE -
Jan. 2018
21
Policies on state budget expenditure: Regarding
budget contingency, the State Budget Law
effective since the budget year of 2017 allows the
contingency of 2-4% of total budget expenditure.
The average of annual budget contingency during
2010-2017 was approximately VND 22,000 billion
that spent for disaster recovery and other purposes
such as remediation of epidemics, hunger relief,
national defense and security, etc.
Regarding the financial reserve fund, it would
be used in case the annual budget contingency
has been insufficiently spent on natural disaster
events. However, the total expenditure must not
exceed 70% of the fund’s initial balance.
Regarding the national reserves, including
in kind emergency supports from the central
government in the event of natural hazardous
disasters, fires, epidemics, and other national
security and defense cases. The Central Steering
Committee for Disaster Prevention from the
MOLISA has provided 438,225 tons of rice to
people affected by natural disasters from 2006
to 2014.
In addition, the state budget has implemented
specific policies in order to prevent and recover
from consequences of natural disasters such as
policies on supporting poor households in the
event of natural disasters, policies on re-allocating
population in natural disasters regions, policies on
social assistance, policies on supporting fishermen
to recover from natural disaster risks at sea, and
policies on the exploitation and protection of
irrigation works.
Policies on state budget revenue: there are
several kinds of tax exemption provisions with
regard to natural disaster. The Law on Corporate
income tax allows reduction of deductible
expenses when determining taxable income for
platform for expanding access and participation
in the financial system; (iv) encouraging the
development of a comprehensive framework for
the protection of the consumer, which clarifies
the role of government, service providers and
consumers; (v) developing knowledge and
financial capabilities; (vi) creating an institutional
environment with clear responsibilities and
coordination mechanisms, as well as encouraging
partnerships and direct consultations between
government, business and other stakeholders;
(vii) using reliable data to develop policies and
measure progress; (viii) developing policies and
legal frameworks that are consistent with the
risks and benefits of improved products and
services and are based on a review of the gaps and
barriers of the existing regulatory framework; (ix)
incorporating the development of related legal
frameworks, international standards, domestic
conditions and support for creating a competitive
environment.
Since 2015, APEC Finance Ministers’ Process
has set out the directions for Asia Pacific region
to promote macroeconomic cooperation, develop
insurance mechanisms (including microfinance)
and provide financial assistance to help APEC
economies cope with natural disaster risks,
reduce fiscal burdens, and develop capital
markets, so as to create more risk- diversified
financial products, and a stable financial system.
Meanwhile, the Association of Southeast Asian
Nations (ASEAN) considers inclusive finance as
one of the three pillars of ASEAN’s 2025 Vision
for Financial Integration, and has established a
Financial Inclusion Working Group to push the
field in the area.
Natural disaster financing
and insurance policies in Viet Nam
Viet Nam is one of the countries was heavily
affected by natural disasters. According to the
Department of Natural Disaster Prevention
and Protection, natural disasters have caused
economic losses of about VND 40 trillion in 2016
and about VND 17,000 billion in the first three
quarters of 2017. To face up with those impacts of
natural disasters, Viet Nam has adopted several
disaster risk financing and insurance policies,
which includes:
Since 2015, APEC Finance Ministers’ Process
has set out the directions for Asia Pacific region
to promote macroeconomic cooperation,
develop insurance mechanisms (including
microfinance) and provide financial assistance
to help APEC economies cope with natural
disaster risks, reduce fiscal burdens, and
develop capital markets, so as to create more
risk- diversified financial products, and a
stable financial system.
