Hanoi to table municipal government proposal before year-end
Hanoi aims to submit a proposal to pilot a municipal government management model to the Politburo by the end of 2018, said Secretary of Hanoi Party Committee, Hoang Trung Hai.
“The city has to lay down the foundations to pilot the municipal government management model,” Hai stressed at the January 18 meeting reviewing Hanoi’s targets for 2018.
The municipal government model would allow Hanoi to eliminate institutional bottlenecks on its way toward sustainable development.
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The rapid rate of urbanization in Vietnam has led to a widening gap in governance between rural and urban areas after 30 years of reforms and international economic integration.
However, based on the law, local governments are still structured and function according to a uniform legal regime, regardless of the conditions or the size of the locality. The institutional setup is the same in large municipalities and rural areas. People’s Councils and People’s Committees run under the same form and perform the same functions at all administrative levels without accounting for the divergent characteristics, capacities, and requirements of urban and rural administrative units and local residents.
Unlike other cities, municipalities under the Central Government, such as Hanoi or Ho Chi Minh City, play an important economic role and have special characteristics, thus requiring greater autonomy and more decentralized decision-making in their financial mechanisms (i.e. local budget revenues and expenditures), the mobilization of resources, and the implementation of different models for development investment (with due regard for corruption risks).
The new model would temporarily remove People’s Councils at the suburban district and communal levels and re-structure administrative units in a bid to streamline administration, eventually leading to the reduction of internal units, abolition of intermediary levels, and reduction of staff at ministries, sectors, and governmental agencies, said Vu Duc Bao, head of the Hanoi Party Committee’s Commission for Organization.
If district- and ward-level People’s Councils were dissolved, operating costs would decrease slightly, but more importantly, the move would bring about more efficient and effective municipal governance that could provide more adequate and better-fitting services to citizens. Decisions could be implemented faster, without waiting for bi-annual meetings of the People’s Council to formally approve and implement decisions that had effectively already been made. As such, district- and ward-level governments are now merely local administrative bodies without the mandate of current People’s Councils and People’s Committees.
The municipal government model, therefore, would allow Hanoi to eliminate institutional bottlenecks on its way toward sustainable development, which is an irreversible global trend at the moment, according to Vice Minister of Home Affairs Nguyen Duy Thang.
Specifically, greater autonomy would empower Hanoi to attract resources for development. The right to decide on approaches to investment and urban financing (generating revenue for infrastructure and urban development) and urban land use management would greatly fasten the city’s development.
Hanoi, at the end of 2017, had a population of 7.7 million living over an area of 2,246 square kilometers, making it the most populous city in Vietnam, according to Hanoi’s Statistics Bureau. The city is expected to reach 8.5 million residents by 2020.
In 2017, Hanoi’s economy maintained its high growth rate with GRDP at 7.3% and GDP per capita at VND100-105 million (US$4,400-4,600), while the industrial production index is estimated at 7%, according to the city’s 2017 report. Hanoi’s trade balance in 2017 was reported at US$11.54 billion, an increase of 8% over the last year.
To date, total foreign direct investment (FDI) in the city is US$48 billion with 160 projects, according to the City’s Department of Planning and Investment (DPI). In 2017 alone, Hanoi has lured in some US$3.4 billion with 114 FDI projects.
For 2018, Hanoi has set the GRDP target of 7.3-7.8%. Additionally, the capital expects the service sector to grow by 6.9-7.5%, the industrial and construction sector by 8.2-8.7%, and export turnover by 7.5-8%. In 2016-2020, it is estimated that Hanoi would need some US$110 billion for investment projects, said Hai.
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