24
Policy recommendations
Although many disaster risk finance and
insurance policies have been released, a number
of issues are still pending during implementation.
So far Viet Nam has not developed a strategy/
model for natural disaster risk management.
Therefore, fiscal policies in response to disaster
risks are not arranged in systematic manner, and
complementary from one to another.
With regard to state budget policies, state budget
expenditure could only cover partial of annual
losses. The fund allocated from central budget to
local budget for natural disaster recovery accounts
for only 20% of total losses of the period 2011-2014.
The financial reserve fund was also limited because
the total amount of financial reserve accounts for
only 0.04% of total state budget expenditure for the
period of 2007-2015.
Regarding the non-budget funds, The Fund
for Disaster Prevention and Control is the biggest
fund for the prevention and recovery of natural
disasters. However, the Fund’s revenue and
expenditure have encountered many difficulties.
There’s no scheme for fund revenue, while
no norm for support on specific purpose. The
identification and valuation of damaged assets
are also facing challenges.
In addition, the quality of risk forecasting and
cost estimation for prevention and recovery from
risks is relatively limited that sequences to the
allocation of financial resources.
As increasing frequency and severity of
natural disasters causing negative impacts on
the socio-economic development, taking account
of the existing policies on disaster risk financing
and insurance, and recommendations from
international organizations, those policy on
disaster risk financing and insurance in coming
time should be focused on the following issues:
Firstly,
enhance the capacity for natural disaster
forecast in order to improve the quality of budget
planning associated with natural disasters.
Develop a disaster risk assessment model and
develop a disaster risk database (especially
for public assets) to help identify not only the
frequency but also severity of disaster, so as to
develop appropriate disaster risk financing and
insurance policies.
that country, recommended by the World Bank.
International trends in building a financial
inclusion development strategy should meet
the following requirements to ensure financial
products reach the beneficiaries in hands.
Firstly,
enhancing forecasting and assessing
capabilities through connecting with global data
and survey systems such as the Global Findex,
World Bank Enterprise Survey, Universal
FinancialAccess Global Payment Survey; Payment
Aspect of Financial Inclusion (PAFI); Consumer
Protection and Financial Literacy (CPFL), ect.
Secondly,
creating inclusive finance projects
through strategic tools such as the national action
plan on synchronous data system development,
action plan given priorities in line with
implementation roadmap, resource balancing and
partners finding; developing national financial
inclusion and implementing nationwide at all
levels in coordination; increasing cooperation
with donors; developing professional work for
performing staffs; and actual models for credit
lending, advisory and evaluation activities.
Thirdly,
reforming thepolicyagenda includes the
policy development programs via legal framework,
programs on the development of payment systems,
consumers’ protection and financial capabilities
at the national and local/regional levels. Other
issues that need to be addressed include finance
for rural agriculture, finance for small and medium
enterprises, savings and long-term investments
including pensions, insurance, and inclusive
finance by genders, and new financial products
associated with high technology, etc.
Fourthly,
enhancing supervisory capabilities
through the development of monitoring tools that
help forecast the impact of advisory and lending
services on trading accounts, and through project
processes.
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.
