Luận văn thạc sĩ commune investment ownership decentralization in program 135 some policy recommendations for the period 2012 2015

There are, however, matters of concern between expectatian and actual results, which need impravement in terms of policy, mechanism as well as directing and organizing implementation T

UPSALA UNIVERSITY &

LNIVERSITY OF ECONOMICS AND BUSE UPPSALA

UNIVERSITET

MASTER THESIS OF MPPM

COMMUNE INVESTMENT OWNERSHIP DECENTRALIZATION

IN PROGRAM 135 SOME POLICY RECOMMENDATIONS

FOR THE PERIOD 2012-2015

Nguyen Van Tan Ngo Minh Duong

Supervisors: PRD Dung Khúc Anh

PRD Sven-Evik Svdrd

MPPM - INTAKE 4, Group 8B

HANOL, MARCH - 2012

COMMITMENT

We are Vo Wan Bay, Nguyen Van Tan, Neo Mink Duong ~ studznts from Class 4B

Major of Public Management under the Joint Programme between sity of Economies

and Business, Vietnam National University, Hanui and Uppsaia University (Sweden), We

hereby declare that the master thesis “Commune investnent ownership decentralization in

Program 135 — some policy recommendations for period 2612-2015” is our own research

It has never been published or submitted for any prize, diploma or certificate grunt by any

orgunization, Besides, we have made the best effort to have the most exact references to

sources of documents, data to be used in this research

Research team representative

Team leader

Vo Van Buy

ACKNOWLEDGEMENT

During the research and completion of this thesis, the authors have received valuable

enouragement and assistance fram individuals and ather groups

First of all, we would like to express our gratitude to PhD Dang Khac Anh, Vice

Dein of the Politics Department, under the Academy of Public Management {Ho Chi Minh

Naional Academy of Politics and Public Management) and PhD Sven-brik Sward (Uppsala

(Unversity, Sweden) whu had provided us with whole-hearted instruction and assistance for

thicompletion of this thesis:

Qur sincere thanks also goes to the teachers and Rectorate Board of the University of Eenomics and Business (Vietnam National University, Hanoi), Uppsala University

(Sveden), the leaders of the Center for International Training and Education, the leaders of

theComminee for Ethnic Affairs, Department of Ethnic Policies, the Project Management

Un: of the Project to Improve Planning and Implementation Quality of Poverty Reduction

Poly for Peuple in Ethnie Minorities and Mountainous Areas (Committee for Ethnic

); and the Ireland Embassy in Hanoi who have facilitated end created favorable

conlitions for our studies and research

During the research, we also received valuable suppurt and fecdback from the

‘Coumittee for Ethnic Minority Affairs of Kontum province and Thai Nguyen province; the

IPro:ct Management Units of of Pian International, FMV, CECL, JICA, East Meets West JFoudation, and other NGOs for completion of this research; our special thanks te these

iagecies and organizations

Last but not feast, we would like to thank our families, friends and colleagues whose

siupprt and encontagement have always been with us throughout our study and research

INTRODUCTION

1 The necessity of the research topic

LJ, Rationale for the topic selection

Decentralization is a major concem in the reform process in Vietnam [t has also been

a major focus for policy makers and practitioners in Vietnam in the past 25 years Thanks to

such reform, Vietnam has shifted its economy from a centrally-planned to a market-based

one The structure of a multi-sector, multi-ownership type economy was formed and has gradually become more comprehensive in the reform process At the same time,

decentralization to local authorities following suitable roadmaps in many sectors was

pushed forward to maximize local innovation, ownership und accountability

Decentralization in the economic sector was reflected by empowering local authorities to

make strategic decisions on their economic development and structures based on national

strategies and masterplans, investment projects, resource mobilization and the rights and

responsibilities in state and local budget management

In light of decentralization of project investment ownership, a very good policy to

mention is the P:gram 135 - phase [I (pi35-II} Commune ownership centralization was

made a principle in the Decision No 07/2006/QD-TTg dated 10/01/2006 and the objective

for commune investment ownership (CIO) was included in the implementation roadmap

framework for P135-II, according to Decision No 74/2007/QD-UBDT dated 13/3/2007 by

the Committee for Ethnic Minority Affairs (CEMA)

When the program was started in 2009, program district authorities received state

funding to implement projects in communes facing extreme hardship At that time, the

principles for ownership decentralization and streamlined investment procedures were

raised and highlighted in the process of organizing the program implementation However,

by the end of the first phase (1999-2005), the number of communes actually having

investment ownership was very limited Only 28 provinces decentralized investment

ownership to 442 communes, equaling 18%] of the total expected number Highlighted

constraints included unclear and undetermined decentralization, strong holding of the right

to distribute funding, and unwillingness to make information public, which, as a result,

reduced the role of Commune People’s Committees (CPC's) and put communes at passive

Fosition in the Program implementation process

"Pl35 7-year cmplemeniaiion review repr: 1996-2005

ABSTRACT

D

roccnL years It was clearly metlected im the Program 135-1] and became one of the key

tralization and empowerment have been taking shape strongly i0 Vietiam in

principles of the Program, aiming to reach the target that 100% communes would become

investment owners by 2010 There are, however, matters of concern between expectatian

and actual results, which need impravement in terms of policy, mechanism as well as

directing and organizing implementation

The objective of this thesis is to understand the suitability level and eftecliveness of

the commune investment ownership (CIO) decentralization model in the Program 135-Il:

ta analyze the opportunities and challenges in order to propose suitedle policy

recommendations for the period 2012-2015 to continue fostering the activeness,

crewtiveness, ownership and accountability of commune authorities; and to improve

transparency and leverage local participation in programs/projects

This is a qualitative research, using a questionnaire with 60 short open questions co taterview officers at provincial, district, commune and village levels wha had experienced

Managing, directing and organizing implementation of Program 135-IT in two provinces

including Thai Nguyen and Kon Tum The result of the interviews was used as the primary

data resource for the research Other secondary data comes from desk review, ussessinent

reports of Program 135, documents collected from publish works, journals, press and

internet On such foundation, we used SWOT analysis ta clarify the research issue

Based on the primary and secondary data sources, the team identified

challenges faced by commune authorities when CIO decentralization was made in Progr2m

135-II, which were: complexity of administrative procedures, insufficiency of guideline

documents, limited capacity of commune officers, barriers in terms of geographical

conditions and languages, difference in culture, tradition and hahit, ete Furthermore, a

challenge being districis authority unwilling to decentralize investment ownership 16

communes was an interesting finding

Combining theories in decentralization, empowerment and the analysis of collected

field data set a scientific foundation for the team to propose some recommendations ww

bewter implement CIO decentralization in Programyprojeet activities in the period 2012+

2018, which include: i amend and supplement regulations in an appropriate and timely manner: to iraprove commune staff capacity: 10 strengthen participatory plaaning and

ABSTRACT

D

roccnL years It was clearly metlected im the Program 135-1] and became one of the key

tralization and empowerment have been taking shape strongly i0 Vietiam in

principles of the Program, aiming to reach the target that 100% communes would become

investment owners by 2010 There are, however, matters of concern between expectatian

and actual results, which need impravement in terms of policy, mechanism as well as

directing and organizing implementation

The objective of this thesis is to understand the suitability level and eftecliveness of

the commune investment ownership (CIO) decentralization model in the Program 135-Il:

ta analyze the opportunities and challenges in order to propose suitedle policy

recommendations for the period 2012-2015 to continue fostering the activeness,

crewtiveness, ownership and accountability of commune authorities; and to improve

transparency and leverage local participation in programs/projects

This is a qualitative research, using a questionnaire with 60 short open questions co taterview officers at provincial, district, commune and village levels wha had experienced

Managing, directing and organizing implementation of Program 135-IT in two provinces

including Thai Nguyen and Kon Tum The result of the interviews was used as the primary

data resource for the research Other secondary data comes from desk review, ussessinent

reports of Program 135, documents collected from publish works, journals, press and

internet On such foundation, we used SWOT analysis ta clarify the research issue

Based on the primary and secondary data sources, the team identified

challenges faced by commune authorities when CIO decentralization was made in Progr2m

135-II, which were: complexity of administrative procedures, insufficiency of guideline

documents, limited capacity of commune officers, barriers in terms of geographical

conditions and languages, difference in culture, tradition and hahit, ete Furthermore, a

challenge being districis authority unwilling to decentralize investment ownership 16

communes was an interesting finding

Combining theories in decentralization, empowerment and the analysis of collected

field data set a scientific foundation for the team to propose some recommendations ww

bewter implement CIO decentralization in Programyprojeet activities in the period 2012+

2018, which include: i amend and supplement regulations in an appropriate and timely

manner: to iraprove commune staff capacity: 10 strengthen participatory plaaning and

Committee for Ethnic Minority Affairs

Commune Investment Ownership

Commune People’s Committee

Department for International Development (UK)

District People’s Commitece

Foundation for Microprojects in Viet Nam

Deutsche Gesellschaft fur Technische

Zusammenarbeit

(German Agency for Technical Cooperation)

Japan International Cooperation Agency

Ministry of Planning and Investment

Project Management Unit

United Nations Development Programme

Table 2: Result of CLO decentralization implementation in the period 2006-2010 26

Table 3: Communes as investment owners by component by 2010 28

Table 4: Number of officers consulted at different levels 3i

LIST OF FIGURES

Figure 2: Communes that need to assess their investment ownership capacity 40

Figure 4: The role of district authorities in CIO decentralization 25

| Figue 5: The role of provincial authorities in CIO decentralization 26

Figure 6: Participation level of communes as investment owners 28

| Figure 7: Difference in perspective on commune inycstment ownership 32

Figure 8: SWOT Analysis of delegated investment ownership to cammunes a4

L The necessity of the research topic

1.1 Rationale for the lopic selection 7 1.2 The suitability of the research topi SP

CHAPTER I OVERALL ISSUES IN COMMUNE INVESTMENT OWNERSIHP

DECENTRALIZATION IN PROGRAM 135 - PHASE IL

1 Overview of Program 135 ~ phase IL

1.1 Background of the Program

Objective and Role of the Program

2.6 Investment owner at commune level in Programme 135-117

2.7, Decentrulization of communes as investment owners in Programme 135-L

3 Factors affecting the quality of decentralization of commune investment ownership in Program 135 - phase I

3.1 Legal environment:

3.2 Culture, custom and tradition factors:

3.3 Commune siaff and community capacity:

3.4 Support from higher authority to commune implementors:

4 Status of commune investment ownership decentralization

CHAPTER IL IMPLEMENTATION OF COMMUNE INVESTMENT OWNERSHIP

DECENTRALIZATION IN PROGRAM 135 - PHASE IL

1 Overview of the two surveyed provinces

1.1 Thai Nguyen:

12 Kon Tum

3.Survey resultìn Thai Nguyen and Kon Tum

3 Review of CIO decentralization in the two provin

ABSTRACT

D

roccnL years It was clearly metlected im the Program 135-1] and became one of the key

tralization and empowerment have been taking shape strongly i0 Vietiam in

principles of the Program, aiming to reach the target that 100% communes would become

investment owners by 2010 There are, however, matters of concern between expectatian

and actual results, which need impravement in terms of policy, mechanism as well as

directing and organizing implementation

The objective of this thesis is to understand the suitability level and eftecliveness of

the commune investment ownership (CIO) decentralization model in the Program 135-Il:

ta analyze the opportunities and challenges in order to propose suitedle policy

recommendations for the period 2012-2015 to continue fostering the activeness,

crewtiveness, ownership and accountability of commune authorities; and to improve

transparency and leverage local participation in programs/projects

This is a qualitative research, using a questionnaire with 60 short open questions co taterview officers at provincial, district, commune and village levels wha had experienced

Managing, directing and organizing implementation of Program 135-IT in two provinces

including Thai Nguyen and Kon Tum The result of the interviews was used as the primary

data resource for the research Other secondary data comes from desk review, ussessinent

reports of Program 135, documents collected from publish works, journals, press and

internet On such foundation, we used SWOT analysis ta clarify the research issue

Based on the primary and secondary data sources, the team identified

challenges faced by commune authorities when CIO decentralization was made in Progr2m

135-II, which were: complexity of administrative procedures, insufficiency of guideline

documents, limited capacity of commune officers, barriers in terms of geographical

conditions and languages, difference in culture, tradition and hahit, ete Furthermore, a

challenge being districis authority unwilling to decentralize investment ownership 16

communes was an interesting finding

Combining theories in decentralization, empowerment and the analysis of collected

field data set a scientific foundation for the team to propose some recommendations ww

bewter implement CIO decentralization in Programyprojeet activities in the period 2012+

2018, which include: i amend and supplement regulations in an appropriate and timely

manner: to iraprove commune staff capacity: 10 strengthen participatory plaaning and

CHAPTER IU] SOME POLICY RECCOMMENDATIONS FOR THE PERIOD 2012-

INTRODUCTION

1 The necessity of the research topic

LJ, Rationale for the topic selection

Decentralization is a major concem in the reform process in Vietnam [t has also been

a major focus for policy makers and practitioners in Vietnam in the past 25 years Thanks to

such reform, Vietnam has shifted its economy from a centrally-planned to a market-based

one The structure of a multi-sector, multi-ownership type economy was formed and has gradually become more comprehensive in the reform process At the same time,

decentralization to local authorities following suitable roadmaps in many sectors was

pushed forward to maximize local innovation, ownership und accountability

Decentralization in the economic sector was reflected by empowering local authorities to

make strategic decisions on their economic development and structures based on national

strategies and masterplans, investment projects, resource mobilization and the rights and

responsibilities in state and local budget management

In light of decentralization of project investment ownership, a very good policy to

mention is the P:gram 135 - phase [I (pi35-II} Commune ownership centralization was

made a principle in the Decision No 07/2006/QD-TTg dated 10/01/2006 and the objective

for commune investment ownership (CIO) was included in the implementation roadmap

framework for P135-II, according to Decision No 74/2007/QD-UBDT dated 13/3/2007 by

the Committee for Ethnic Minority Affairs (CEMA)

When the program was started in 2009, program district authorities received state

funding to implement projects in communes facing extreme hardship At that time, the

principles for ownership decentralization and streamlined investment procedures were

raised and highlighted in the process of organizing the program implementation However,

by the end of the first phase (1999-2005), the number of communes actually having

investment ownership was very limited Only 28 provinces decentralized investment

ownership to 442 communes, equaling 18%] of the total expected number Highlighted

constraints included unclear and undetermined decentralization, strong holding of the right

to distribute funding, and unwillingness to make information public, which, as a result,

reduced the role of Commune People’s Committees (CPC's) and put communes at passive

Fosition in the Program implementation process

"Pl35 7-year cmplemeniaiion review repr: 1996-2005

Table 2: Result of CLO decentralization implementation in the period 2006-2010 26

Table 3: Communes as investment owners by component by 2010 28

Table 4: Number of officers consulted at different levels 3i

LIST OF FIGURES

Figure 2: Communes that need to assess their investment ownership capacity 40

Figure 4: The role of district authorities in CIO decentralization 25

| Figue 5: The role of provincial authorities in CIO decentralization 26

Figure 6: Participation level of communes as investment owners 28

| Figure 7: Difference in perspective on commune inycstment ownership 32

Figure 8: SWOT Analysis of delegated investment ownership to cammunes a4

communication: to classify and develop suitable roadmups: and to foster support from provincial and district level to commune authorities especially in the stage of checking and

supervising the decentralization implementation of commune investment ownership

Due to the small sample of the survey in Thai Nguyen and Kon Tum, and given the limited time and scope of the thesis, the authors do not aspire to come up with absolute and

comprehensive change We only wish to provide additional information about the

implementation of CIO decentratization, identify impact factors and challenges faced by commune authorities when taking up investment ownership Furthermore the authors

wouid like to propose a more in-depth research as to why district authorities were unwilling lo decentralize communes to become investment owners to have a satisfying answer, as well as appropriate intervention measures to mitigate this barrier

We believe the information provided in this thesis is a trustable source for policy

makers and managers at central, provincial, and district levels, especially tor CEMA and

the Department of Ethnic Policy, where the team members are working, with a view 10

better support improvement and ensuring the enforcement of decentralization for

communes to become investment owners of programs and projects in the period 20!2-

2015.

CHAPTER IU] SOME POLICY RECCOMMENDATIONS FOR THE PERIOD 2012-

communication: to classify and develop suitable roadmups: and to foster support from provincial and district level to commune authorities especially in the stage of checking and

supervising the decentralization implementation of commune investment ownership

Due to the small sample of the survey in Thai Nguyen and Kon Tum, and given the limited time and scope of the thesis, the authors do not aspire to come up with absolute and

comprehensive change We only wish to provide additional information about the

implementation of CIO decentratization, identify impact factors and challenges faced by commune authorities when taking up investment ownership Furthermore the authors

wouid like to propose a more in-depth research as to why district authorities were unwilling lo decentralize communes to become investment owners to have a satisfying answer, as well as appropriate intervention measures to mitigate this barrier

We believe the information provided in this thesis is a trustable source for policy

makers and managers at central, provincial, and district levels, especially tor CEMA and

the Department of Ethnic Policy, where the team members are working, with a view 10

better support improvement and ensuring the enforcement of decentralization for

communes to become investment owners of programs and projects in the period 20!2-

2015.

INTRODUCTION

1 The necessity of the research topic

LJ, Rationale for the topic selection

Decentralization is a major concem in the reform process in Vietnam [t has also been

a major focus for policy makers and practitioners in Vietnam in the past 25 years Thanks to

such reform, Vietnam has shifted its economy from a centrally-planned to a market-based

one The structure of a multi-sector, multi-ownership type economy was formed and has gradually become more comprehensive in the reform process At the same time,

decentralization to local authorities following suitable roadmaps in many sectors was

pushed forward to maximize local innovation, ownership und accountability

Decentralization in the economic sector was reflected by empowering local authorities to

make strategic decisions on their economic development and structures based on national

strategies and masterplans, investment projects, resource mobilization and the rights and

responsibilities in state and local budget management

In light of decentralization of project investment ownership, a very good policy to

mention is the P:gram 135 - phase [I (pi35-II} Commune ownership centralization was

made a principle in the Decision No 07/2006/QD-TTg dated 10/01/2006 and the objective

for commune investment ownership (CIO) was included in the implementation roadmap

framework for P135-II, according to Decision No 74/2007/QD-UBDT dated 13/3/2007 by

the Committee for Ethnic Minority Affairs (CEMA)

When the program was started in 2009, program district authorities received state

funding to implement projects in communes facing extreme hardship At that time, the

principles for ownership decentralization and streamlined investment procedures were

raised and highlighted in the process of organizing the program implementation However,

by the end of the first phase (1999-2005), the number of communes actually having

investment ownership was very limited Only 28 provinces decentralized investment

ownership to 442 communes, equaling 18%] of the total expected number Highlighted

constraints included unclear and undetermined decentralization, strong holding of the right

to distribute funding, and unwillingness to make information public, which, as a result,

reduced the role of Commune People’s Committees (CPC's) and put communes at passive

Fosition in the Program implementation process

"Pl35 7-year cmplemeniaiion review repr: 1996-2005

communication: to classify and develop suitable roadmups: and to foster support from provincial and district level to commune authorities especially in the stage of checking and

supervising the decentralization implementation of commune investment ownership

Due to the small sample of the survey in Thai Nguyen and Kon Tum, and given the limited time and scope of the thesis, the authors do not aspire to come up with absolute and

comprehensive change We only wish to provide additional information about the

implementation of CIO decentratization, identify impact factors and challenges faced by commune authorities when taking up investment ownership Furthermore the authors

wouid like to propose a more in-depth research as to why district authorities were unwilling lo decentralize communes to become investment owners to have a satisfying answer, as well as appropriate intervention measures to mitigate this barrier

We believe the information provided in this thesis is a trustable source for policy

makers and managers at central, provincial, and district levels, especially tor CEMA and

the Department of Ethnic Policy, where the team members are working, with a view 10

better support improvement and ensuring the enforcement of decentralization for

communes to become investment owners of programs and projects in the period 20!2-

2015.

CHAPTER IU] SOME POLICY RECCOMMENDATIONS FOR THE PERIOD 2012-

Committee for Ethnic Minority Affairs

Commune Investment Ownership

Commune People’s Committee

Department for International Development (UK)

District People’s Commitece

Foundation for Microprojects in Viet Nam

Deutsche Gesellschaft fur Technische

Zusammenarbeit

(German Agency for Technical Cooperation)

Japan International Cooperation Agency

Ministry of Planning and Investment

Project Management Unit

United Nations Development Programme

ABSTRACT

D

roccnL years It was clearly metlected im the Program 135-1] and became one of the key

tralization and empowerment have been taking shape strongly i0 Vietiam in

principles of the Program, aiming to reach the target that 100% communes would become

investment owners by 2010 There are, however, matters of concern between expectatian

and actual results, which need impravement in terms of policy, mechanism as well as

directing and organizing implementation

The objective of this thesis is to understand the suitability level and eftecliveness of

the commune investment ownership (CIO) decentralization model in the Program 135-Il:

ta analyze the opportunities and challenges in order to propose suitedle policy

recommendations for the period 2012-2015 to continue fostering the activeness,

crewtiveness, ownership and accountability of commune authorities; and to improve

transparency and leverage local participation in programs/projects

This is a qualitative research, using a questionnaire with 60 short open questions co taterview officers at provincial, district, commune and village levels wha had experienced

Managing, directing and organizing implementation of Program 135-IT in two provinces

including Thai Nguyen and Kon Tum The result of the interviews was used as the primary

data resource for the research Other secondary data comes from desk review, ussessinent

reports of Program 135, documents collected from publish works, journals, press and

internet On such foundation, we used SWOT analysis ta clarify the research issue

Based on the primary and secondary data sources, the team identified

challenges faced by commune authorities when CIO decentralization was made in Progr2m

135-II, which were: complexity of administrative procedures, insufficiency of guideline

documents, limited capacity of commune officers, barriers in terms of geographical

conditions and languages, difference in culture, tradition and hahit, ete Furthermore, a

challenge being districis authority unwilling to decentralize investment ownership 16

communes was an interesting finding

Combining theories in decentralization, empowerment and the analysis of collected

field data set a scientific foundation for the team to propose some recommendations ww

bewter implement CIO decentralization in Programyprojeet activities in the period 2012+

2018, which include: i amend and supplement regulations in an appropriate and timely manner: to iraprove commune staff capacity: 10 strengthen participatory plaaning and

Committee for Ethnic Minority Affairs

Commune Investment Ownership

Commune People’s Committee

Department for International Development (UK)

District People’s Commitece

Foundation for Microprojects in Viet Nam

Deutsche Gesellschaft fur Technische

Zusammenarbeit

(German Agency for Technical Cooperation)

Japan International Cooperation Agency

Ministry of Planning and Investment

Project Management Unit

United Nations Development Programme

communication: to classify and develop suitable roadmups: and to foster support from provincial and district level to commune authorities especially in the stage of checking and

supervising the decentralization implementation of commune investment ownership

Due to the small sample of the survey in Thai Nguyen and Kon Tum, and given the limited time and scope of the thesis, the authors do not aspire to come up with absolute and

comprehensive change We only wish to provide additional information about the

implementation of CIO decentratization, identify impact factors and challenges faced by commune authorities when taking up investment ownership Furthermore the authors

wouid like to propose a more in-depth research as to why district authorities were unwilling lo decentralize communes to become investment owners to have a satisfying answer, as well as appropriate intervention measures to mitigate this barrier

We believe the information provided in this thesis is a trustable source for policy

makers and managers at central, provincial, and district levels, especially tor CEMA and

the Department of Ethnic Policy, where the team members are working, with a view 10

better support improvement and ensuring the enforcement of decentralization for

communes to become investment owners of programs and projects in the period 20!2-

ABSTRACT

D

roccnL years It was clearly metlected im the Program 135-1] and became one of the key

tralization and empowerment have been taking shape strongly i0 Vietiam in

principles of the Program, aiming to reach the target that 100% communes would become

investment owners by 2010 There are, however, matters of concern between expectatian

and actual results, which need impravement in terms of policy, mechanism as well as

directing and organizing implementation

The objective of this thesis is to understand the suitability level and eftecliveness of

the commune investment ownership (CIO) decentralization model in the Program 135-Il:

ta analyze the opportunities and challenges in order to propose suitedle policy

recommendations for the period 2012-2015 to continue fostering the activeness,

crewtiveness, ownership and accountability of commune authorities; and to improve

transparency and leverage local participation in programs/projects

This is a qualitative research, using a questionnaire with 60 short open questions co taterview officers at provincial, district, commune and village levels wha had experienced

Managing, directing and organizing implementation of Program 135-IT in two provinces

including Thai Nguyen and Kon Tum The result of the interviews was used as the primary

data resource for the research Other secondary data comes from desk review, ussessinent

reports of Program 135, documents collected from publish works, journals, press and

internet On such foundation, we used SWOT analysis ta clarify the research issue

Based on the primary and secondary data sources, the team identified

challenges faced by commune authorities when CIO decentralization was made in Progr2m

135-II, which were: complexity of administrative procedures, insufficiency of guideline

documents, limited capacity of commune officers, barriers in terms of geographical

conditions and languages, difference in culture, tradition and hahit, ete Furthermore, a

challenge being districis authority unwilling to decentralize investment ownership 16

communes was an interesting finding

Combining theories in decentralization, empowerment and the analysis of collected

field data set a scientific foundation for the team to propose some recommendations ww

bewter implement CIO decentralization in Programyprojeet activities in the period 2012+

2018, which include: i amend and supplement regulations in an appropriate and timely

manner: to iraprove commune staff capacity: 10 strengthen participatory plaaning and

CHAPTER IU] SOME POLICY RECCOMMENDATIONS FOR THE PERIOD 2012-

INTRODUCTION

1 The necessity of the research topic

LJ, Rationale for the topic selection

Decentralization is a major concem in the reform process in Vietnam [t has also been

a major focus for policy makers and practitioners in Vietnam in the past 25 years Thanks to

such reform, Vietnam has shifted its economy from a centrally-planned to a market-based

one The structure of a multi-sector, multi-ownership type economy was formed and has gradually become more comprehensive in the reform process At the same time,

decentralization to local authorities following suitable roadmaps in many sectors was

pushed forward to maximize local innovation, ownership und accountability

Decentralization in the economic sector was reflected by empowering local authorities to

make strategic decisions on their economic development and structures based on national

strategies and masterplans, investment projects, resource mobilization and the rights and

responsibilities in state and local budget management

In light of decentralization of project investment ownership, a very good policy to

mention is the P:gram 135 - phase [I (pi35-II} Commune ownership centralization was

made a principle in the Decision No 07/2006/QD-TTg dated 10/01/2006 and the objective

for commune investment ownership (CIO) was included in the implementation roadmap

framework for P135-II, according to Decision No 74/2007/QD-UBDT dated 13/3/2007 by

the Committee for Ethnic Minority Affairs (CEMA)

When the program was started in 2009, program district authorities received state

funding to implement projects in communes facing extreme hardship At that time, the

principles for ownership decentralization and streamlined investment procedures were

raised and highlighted in the process of organizing the program implementation However,

by the end of the first phase (1999-2005), the number of communes actually having

investment ownership was very limited Only 28 provinces decentralized investment

ownership to 442 communes, equaling 18%] of the total expected number Highlighted

constraints included unclear and undetermined decentralization, strong holding of the right

to distribute funding, and unwillingness to make information public, which, as a result,

reduced the role of Commune People’s Committees (CPC's) and put communes at passive

Fosition in the Program implementation process

"Pl35 7-year cmplemeniaiion review repr: 1996-2005

L The necessity of the research topic

1.1 Rationale for the lopic selection 7 1.2 The suitability of the research topi SP

CHAPTER I OVERALL ISSUES IN COMMUNE INVESTMENT OWNERSIHP

DECENTRALIZATION IN PROGRAM 135 - PHASE IL

1 Overview of Program 135 ~ phase IL

1.1 Background of the Program

Objective and Role of the Program

2.6 Investment owner at commune level in Programme 135-117

2.7, Decentrulization of communes as investment owners in Programme 135-L

3 Factors affecting the quality of decentralization of commune investment ownership in Program 135 - phase I

3.1 Legal environment:

3.2 Culture, custom and tradition factors:

3.3 Commune siaff and community capacity:

3.4 Support from higher authority to commune implementors:

4 Status of commune investment ownership decentralization

CHAPTER IL IMPLEMENTATION OF COMMUNE INVESTMENT OWNERSHIP

DECENTRALIZATION IN PROGRAM 135 - PHASE IL

1 Overview of the two surveyed provinces

1.1 Thai Nguyen:

12 Kon Tum

3.Survey resultìn Thai Nguyen and Kon Tum

3 Review of CIO decentralization in the two provin

INTRODUCTION

1 The necessity of the research topic

LJ, Rationale for the topic selection

Decentralization is a major concem in the reform process in Vietnam [t has also been

a major focus for policy makers and practitioners in Vietnam in the past 25 years Thanks to

such reform, Vietnam has shifted its economy from a centrally-planned to a market-based

one The structure of a multi-sector, multi-ownership type economy was formed and has gradually become more comprehensive in the reform process At the same time,

decentralization to local authorities following suitable roadmaps in many sectors was

pushed forward to maximize local innovation, ownership und accountability

Decentralization in the economic sector was reflected by empowering local authorities to

make strategic decisions on their economic development and structures based on national

strategies and masterplans, investment projects, resource mobilization and the rights and

responsibilities in state and local budget management

In light of decentralization of project investment ownership, a very good policy to

mention is the P:gram 135 - phase [I (pi35-II} Commune ownership centralization was

made a principle in the Decision No 07/2006/QD-TTg dated 10/01/2006 and the objective

for commune investment ownership (CIO) was included in the implementation roadmap

framework for P135-II, according to Decision No 74/2007/QD-UBDT dated 13/3/2007 by

the Committee for Ethnic Minority Affairs (CEMA)

When the program was started in 2009, program district authorities received state

funding to implement projects in communes facing extreme hardship At that time, the

principles for ownership decentralization and streamlined investment procedures were

raised and highlighted in the process of organizing the program implementation However,

by the end of the first phase (1999-2005), the number of communes actually having

investment ownership was very limited Only 28 provinces decentralized investment

ownership to 442 communes, equaling 18%] of the total expected number Highlighted

constraints included unclear and undetermined decentralization, strong holding of the right

to distribute funding, and unwillingness to make information public, which, as a result,

reduced the role of Commune People’s Committees (CPC's) and put communes at passive

Fosition in the Program implementation process

"Pl35 7-year cmplemeniaiion review repr: 1996-2005

Table 2: Result of CLO decentralization implementation in the period 2006-2010 26

Table 3: Communes as investment owners by component by 2010 28

Table 4: Number of officers consulted at different levels 3i

LIST OF FIGURES

Figure 2: Communes that need to assess their investment ownership capacity 40

Figure 4: The role of district authorities in CIO decentralization 25

| Figue 5: The role of provincial authorities in CIO decentralization 26

Figure 6: Participation level of communes as investment owners 28

| Figure 7: Difference in perspective on commune inycstment ownership 32

Figure 8: SWOT Analysis of delegated investment ownership to cammunes a4

Table 2: Result of CLO decentralization implementation in the period 2006-2010 26

Table 3: Communes as investment owners by component by 2010 28

Table 4: Number of officers consulted at different levels 3i

LIST OF FIGURES

Figure 2: Communes that need to assess their investment ownership capacity 40

Figure 4: The role of district authorities in CIO decentralization 25

| Figue 5: The role of provincial authorities in CIO decentralization 26

Figure 6: Participation level of communes as investment owners 28

| Figure 7: Difference in perspective on commune inycstment ownership 32

Figure 8: SWOT Analysis of delegated investment ownership to cammunes a4

ABSTRACT

D

roccnL years It was clearly metlected im the Program 135-1] and became one of the key

tralization and empowerment have been taking shape strongly i0 Vietiam in

principles of the Program, aiming to reach the target that 100% communes would become

investment owners by 2010 There are, however, matters of concern between expectatian

and actual results, which need impravement in terms of policy, mechanism as well as

directing and organizing implementation

The objective of this thesis is to understand the suitability level and eftecliveness of

the commune investment ownership (CIO) decentralization model in the Program 135-Il:

ta analyze the opportunities and challenges in order to propose suitedle policy

recommendations for the period 2012-2015 to continue fostering the activeness,

crewtiveness, ownership and accountability of commune authorities; and to improve

transparency and leverage local participation in programs/projects

This is a qualitative research, using a questionnaire with 60 short open questions co taterview officers at provincial, district, commune and village levels wha had experienced

Managing, directing and organizing implementation of Program 135-IT in two provinces

including Thai Nguyen and Kon Tum The result of the interviews was used as the primary

data resource for the research Other secondary data comes from desk review, ussessinent

reports of Program 135, documents collected from publish works, journals, press and

internet On such foundation, we used SWOT analysis ta clarify the research issue

Based on the primary and secondary data sources, the team identified

challenges faced by commune authorities when CIO decentralization was made in Progr2m

135-II, which were: complexity of administrative procedures, insufficiency of guideline

documents, limited capacity of commune officers, barriers in terms of geographical

conditions and languages, difference in culture, tradition and hahit, ete Furthermore, a

challenge being districis authority unwilling to decentralize investment ownership 16

communes was an interesting finding

Combining theories in decentralization, empowerment and the analysis of collected

field data set a scientific foundation for the team to propose some recommendations ww

bewter implement CIO decentralization in Programyprojeet activities in the period 2012+

2018, which include: i amend and supplement regulations in an appropriate and timely manner: to iraprove commune staff capacity: 10 strengthen participatory plaaning and

INTRODUCTION

1 The necessity of the research topic

LJ, Rationale for the topic selection

Decentralization is a major concem in the reform process in Vietnam [t has also been

a major focus for policy makers and practitioners in Vietnam in the past 25 years Thanks to

such reform, Vietnam has shifted its economy from a centrally-planned to a market-based

one The structure of a multi-sector, multi-ownership type economy was formed and has gradually become more comprehensive in the reform process At the same time,

decentralization to local authorities following suitable roadmaps in many sectors was

pushed forward to maximize local innovation, ownership und accountability

Decentralization in the economic sector was reflected by empowering local authorities to

make strategic decisions on their economic development and structures based on national

strategies and masterplans, investment projects, resource mobilization and the rights and

responsibilities in state and local budget management

In light of decentralization of project investment ownership, a very good policy to

mention is the P:gram 135 - phase [I (pi35-II} Commune ownership centralization was

made a principle in the Decision No 07/2006/QD-TTg dated 10/01/2006 and the objective

for commune investment ownership (CIO) was included in the implementation roadmap

framework for P135-II, according to Decision No 74/2007/QD-UBDT dated 13/3/2007 by

the Committee for Ethnic Minority Affairs (CEMA)

When the program was started in 2009, program district authorities received state

funding to implement projects in communes facing extreme hardship At that time, the

principles for ownership decentralization and streamlined investment procedures were

raised and highlighted in the process of organizing the program implementation However,

by the end of the first phase (1999-2005), the number of communes actually having

investment ownership was very limited Only 28 provinces decentralized investment

ownership to 442 communes, equaling 18%] of the total expected number Highlighted

constraints included unclear and undetermined decentralization, strong holding of the right

to distribute funding, and unwillingness to make information public, which, as a result,

reduced the role of Commune People’s Committees (CPC's) and put communes at passive

Fosition in the Program implementation process

"Pl35 7-year cmplemeniaiion review repr: 1996-2005

CHAPTER IU] SOME POLICY RECCOMMENDATIONS FOR THE PERIOD 2012-

ABSTRACT

D

roccnL years It was clearly metlected im the Program 135-1] and became one of the key

tralization and empowerment have been taking shape strongly i0 Vietiam in

principles of the Program, aiming to reach the target that 100% communes would become

investment owners by 2010 There are, however, matters of concern between expectatian

and actual results, which need impravement in terms of policy, mechanism as well as

directing and organizing implementation

The objective of this thesis is to understand the suitability level and eftecliveness of

the commune investment ownership (CIO) decentralization model in the Program 135-Il:

ta analyze the opportunities and challenges in order to propose suitedle policy

recommendations for the period 2012-2015 to continue fostering the activeness,

crewtiveness, ownership and accountability of commune authorities; and to improve

transparency and leverage local participation in programs/projects

This is a qualitative research, using a questionnaire with 60 short open questions co taterview officers at provincial, district, commune and village levels wha had experienced

Managing, directing and organizing implementation of Program 135-IT in two provinces

including Thai Nguyen and Kon Tum The result of the interviews was used as the primary

data resource for the research Other secondary data comes from desk review, ussessinent

reports of Program 135, documents collected from publish works, journals, press and

internet On such foundation, we used SWOT analysis ta clarify the research issue

Based on the primary and secondary data sources, the team identified

challenges faced by commune authorities when CIO decentralization was made in Progr2m

135-II, which were: complexity of administrative procedures, insufficiency of guideline

documents, limited capacity of commune officers, barriers in terms of geographical

conditions and languages, difference in culture, tradition and hahit, ete Furthermore, a

challenge being districis authority unwilling to decentralize investment ownership 16

communes was an interesting finding

Combining theories in decentralization, empowerment and the analysis of collected

field data set a scientific foundation for the team to propose some recommendations ww

bewter implement CIO decentralization in Programyprojeet activities in the period 2012+

2018, which include: i amend and supplement regulations in an appropriate and timely

manner: to iraprove commune staff capacity: 10 strengthen participatory plaaning and

Committee for Ethnic Minority Affairs

Commune Investment Ownership

Commune People’s Committee

Department for International Development (UK)

District People’s Commitece

Foundation for Microprojects in Viet Nam

Deutsche Gesellschaft fur Technische

Zusammenarbeit

(German Agency for Technical Cooperation)

Japan International Cooperation Agency

Ministry of Planning and Investment

Project Management Unit

United Nations Development Programme

ABSTRACT

D

roccnL years It was clearly metlected im the Program 135-1] and became one of the key

tralization and empowerment have been taking shape strongly i0 Vietiam in

principles of the Program, aiming to reach the target that 100% communes would become

investment owners by 2010 There are, however, matters of concern between expectatian

and actual results, which need impravement in terms of policy, mechanism as well as

directing and organizing implementation

The objective of this thesis is to understand the suitability level and eftecliveness of

the commune investment ownership (CIO) decentralization model in the Program 135-Il:

ta analyze the opportunities and challenges in order to propose suitedle policy

recommendations for the period 2012-2015 to continue fostering the activeness,

crewtiveness, ownership and accountability of commune authorities; and to improve

transparency and leverage local participation in programs/projects

This is a qualitative research, using a questionnaire with 60 short open questions co taterview officers at provincial, district, commune and village levels wha had experienced

Managing, directing and organizing implementation of Program 135-IT in two provinces

including Thai Nguyen and Kon Tum The result of the interviews was used as the primary

data resource for the research Other secondary data comes from desk review, ussessinent

reports of Program 135, documents collected from publish works, journals, press and

internet On such foundation, we used SWOT analysis ta clarify the research issue

Based on the primary and secondary data sources, the team identified

challenges faced by commune authorities when CIO decentralization was made in Progr2m

135-II, which were: complexity of administrative procedures, insufficiency of guideline

documents, limited capacity of commune officers, barriers in terms of geographical

conditions and languages, difference in culture, tradition and hahit, ete Furthermore, a

challenge being districis authority unwilling to decentralize investment ownership 16

communes was an interesting finding

Combining theories in decentralization, empowerment and the analysis of collected

field data set a scientific foundation for the team to propose some recommendations ww

bewter implement CIO decentralization in Programyprojeet activities in the period 2012+

2018, which include: i amend and supplement regulations in an appropriate and timely

manner: to iraprove commune staff capacity: 10 strengthen participatory plaaning and

Table 2: Result of CLO decentralization implementation in the period 2006-2010 26

Table 3: Communes as investment owners by component by 2010 28

Table 4: Number of officers consulted at different levels 3i

LIST OF FIGURES

Figure 2: Communes that need to assess their investment ownership capacity 40

Figure 4: The role of district authorities in CIO decentralization 25

| Figue 5: The role of provincial authorities in CIO decentralization 26

Figure 6: Participation level of communes as investment owners 28

| Figure 7: Difference in perspective on commune inycstment ownership 32

Figure 8: SWOT Analysis of delegated investment ownership to cammunes a4