Public Finance Modernisation

Comissioning Party






The political and economic reforms in recent times have transformed Viet Nam from one of the poorest countries in the world to a lower middle-income country. The Vietnamese public financial management (PFM) system has been going through continuous reforms for almost two decades. In order to further improve transparency, accountability and efficiency in public financial management (PFM), the European Union (EU) and the Government of the Socialist Republic of Vietnam signed an agreement on the implementation of the Public Finance Modernization Project (EU-PFMO) in 2014.

On behalf of the Delegation of the European Union (DEU) to Viet Nam, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH implements one component of the programme, providing capacity building support to the Ministry of Finance. The financial volume of this component amounts to EUR 3,000,000 and is implemented from 25/02/2015 to 30/06/2018. The project supports the reinforcement of macroeconomic stability and resilience to external shocks and strengthens the government’s ability to implement its economic and social policies through efficient and effective planning and execution of the state budget. Simultaneously, it promotes accountability and transparency in public financial management (PFM).


The overall objective is the improvement of public financial management (PFM) through a reform of the regulatory framework for the planning and execution of the state budget according to international standards. Thereby, fiscal decentralisation is strengthened and medium-term financial planning on the central and sub-national level of government is introduced. The project focusses on the poorest provinces of Viet Nam, namely provinces where ethnic minorities are prevalent as most of them have not been comprehensively benefitting from economic growth and poverty alleviation in Viet Nam.


Within the technical assistance to the Ministry of Finance (MoF) and other key stakeholders at the central and sub-national level, the project focusses on three particular intervention areas: Firstly, it supports the reform of the State Budget Law aiming to improve public financial management in Viet Nam. Within the context of the State Budget Law (SBL) reform, implementing guidelines are aligned with international practice, especially to improve disclosure provisions on budget publication. Secondly, technical advisory focusses on the development of policy and regulatory frameworks for increased fiscal decentralization and the strengthening of capacities of sub-national entities to manage public funds according to existing rules and regulations. Thirdly, the project supports the Ministry of Finance in the introduction of medium-term financial planning, i.e. that budgetary planning is more effective through the development of medium-term revenue and fiscal forecasting and better alignment of expenditure with national policy priorities.


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Ms Nguyen Do Ha Minh