24
Viet Nam-EES Paper N 32.doc
+ 5
: ,,- ,,7 ,,8 ,,9 ,,2 , , ,
, , , + , - , 7 , 8 , 9 , 2 ,,
8 2 9 - ,
2 8 , 2 9 , 2 2 9 9 9 9 9 2
General administrative services
2.2 1.9
2.8 2.6
2.5 2.6
2.7 2.7
2.7 2.7
2.7 2.7
2.7 2.7
2.7 2.7
Economic services
1.4 1.5
1.4 1.4
1.5 1.6
1.6 1.6
1.6 1.6
1.6 1.6
1.6 1.6
1.6 1.6
Social services
7.3 8.0
8.0 7.7
8.4 8.5
8.7 8.7
8.7 8.7
8.7 8.7
8.7 8.7
8.7 8.7
Education
2.6 3.1
3.1 2.9
3.2 3.2
3.3 3.3
3.3 3.3
3.3 3.3
3.3 3.3
3.3 3.3
Training
0.8 0.7
0.8 0.7
0.8 0.8
0.8 0.8
0.8 0.8
0.8 0.8
0.8 0.8
0.8 0.8
Health
0.9 1.2
1.1 1.0
1.1 1.1
1.2 1.2
1.2 1.2
1.2 1.2
1.2 1.2
1.2 1.2
Science and technology
0.3 0.3
0.3 0.2
0.3 0.3
0.3 0.3
0.3 0.3
0.3 0.3
0.3 0.3
0.3 0.3
Culture and information
0.3 0.2
0.2 0.2
0.2 0.2
0.2 0.2
0.2 0.2
0.2 0.2
0.2 0.2
0.2 0.2
Radio and TV
0.2 0.1
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
Sport
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
Population and family planning
0.1 0.1
0.0 0.0
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
0.1 0.1
Social subsidies
2.1 2.3
2.4 2.5
2.5 2.5
2.6 2.6
2.6 2.6
2.6 2.6
2.6 2.6
2.6 2.6
Defence
1.9 2.1
2.3 2.2
2.3 2.3
2.4 2.4
2.4 2.4
2.4 2.4
2.4 2.4
2.4 2.4
Security
0.9 1.0
1.1 1.1
1.1 1.1
1.1 1.1
1.1 1.1
1.1 1.1
1.1 1.1
1.1 1.1
Salary reform
1.5 1.7
1.9 1.5
1.8 1.8
1.9 1.9
1.9 1.9
1.9 1.9
1.9 1.9
1.9 1.9
Others
1.8 1.5
1.7 2.1
1.9 1.9
2.0 2.0
2.0 2.0
2.0 2.0
2.0 2.0
2.0 2.0
Oil subsidies
1.3 1.0
0.9 1.5
1.3 1.3
1.3 1.3
1.3 1.3
1.3 1.3
1.3 1.3
1.3 1.3
Other
0.5 0.5
0.8 0.6
0.6 0.6
0.6 0.6
0.6 0.6
0.6 0.6
0.6 0.6
0.6 0.6
Interest payments paid
, 9 , 9
+ -
8 7
- -
+ +
- -
-
Capital expenditure
2 + 2
2 9 ,
, 2 2 ,
8 8
8 8
8 8
8 , 7 9
7 8 7 7
Off budget investment expenditure
9 -
2 + -
9 8
7 7
7 -
- -
+ +
Bond financed expenditure
1.2 0.9
1.5 1.8
2.8 2.8
1.9 1.8
1.8 1.7
1.7 1.7
1.7 1.7
1.6 1.6
Education bonds
0.2 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
Infrastructure bonds
0.8 0.7
1.2 1.5
2.2 2.3
1.5 1.5
1.4 1.4
1.4 1.4
1.4 1.3
1.3 1.3
Reform bonds
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
Municipal bonds
0.3 0.2
0.3 0.4
0.5 0.5
0.4 0.4
0.3 0.3
0.3 0.3
0.3 0.3
0.3 0.3
On lending
2.0 0.5
0.4 0.6
0.5 1.6
0.9 0.9
0.9 0.8
0.8 0.8
0.8 0.8
0.8 0.8
Interest subsidy scheme
0.0 0.0
0.0 0.0
0.6 0.1
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
, - 9 2 ,
- 8 + 7
8 2
8 7
- +
, , 9
General government fiscal balance
3.3 0.2
2.5 1.2
9.0 6.4
3.9 3.8
3.6 3.3
3.0 2.9
3.0 3.0
3.0 3.0
Total public debt as percentage of GDP
41.2 41.8 44.6 42.9 51.2 52.8 51.5 51.0 50.1 49.1 47.9 46.7 45.6 44.6 43.5 42.7
Sources: IMF Statistical Annex for 2005–2007 structure of expenditure and Article IV Consultation updated Mar.2011 for 2006–2015; and estimates based on average from 2016 to 2020 total expenditures as a percentage of GDP; ILO estimates based on average from 2016 to 2020.
Viet Nam-EES Paper N 32.doc
25
General government revenue starts out at a level of 28.2 per cent of GDP in 2010 and is assumed to be about 27.9 per cent of GDP in 2020 under the given assumptions. During
the same period general government expenditure is projected to decrease from 34.6 to 30.8 per cent of GDP and hence will approximately return to the pre-crisis level of 2008. The
projected income and expenditure developments result in a crisis-triggered high deficit equal to 6.4 per cent of GDP in 2010 vs 1.2 per cent of GDP in pre-crisis 2008 and 9.0 per
cent in full-crisis 2009 which slowly decreases to 3.0 per cent of GDP in 2020.
The actual development might be slightly less favourable, as the interest payments estimated by the IMF in the first half of the projection period appear to be based on a very
low average bond interest rate. Our ILO projections may also carry some further minor structural risks in addition to the general uncertainty of any budget forecast, such as the
development of income generated by grants over the next decade that may be more unpredictable than we assumed. But in general our scenario is considered relatively risk-
averse.
Indeed, it should be noted that in the pre-crisis years 2006–2008 the overall level of revenues was in the order of 1 per cent higher in 2006 and similar in 2007 and 2008 than
the projected level in 2020. This would indicate that even without an increase in actual or recent 2008 tax rates, some fiscal space could open up for the filling of gaps in the SPF
during the second half of the projection period.
4.3.3. Estimating the cost of closing the observed SPF gap and its fiscal implications
The following graphs figure 4.3 display the results of our costing
5
exercises of the additional benefits described in section 4.2, expressed as a percentage of GDP as well as a
share of total government expenditure. The figure starts with two different scenarios for the elderly: the first scenario, 1a, includes protection only for those not covered by the
contributory social insurance scheme; while the second, 1b, also includes granting a reduced amount of benefit for beneficiaries of the contributory scheme from the age of 65.
The second part of the figure contains the cost for scenarios 2a and b of the child benefit: the means-tested child benefit for all children taking into account the relatively
higher poverty rate among children 2a; and a similar scenario but limited to two children per household 2b. The third part of the figure shows also the relatively
expensive benefits for the population in working age – clearly the most expensive benefit reaching a maximum cost of 1.1 per cent of GDP in 20142015.
It is worth noting that in the costing exercise it is currently assumed that the amounts of child and working-age benefits i.e. 100 days employment guarantee are set according to
the minimum wage indexed on the average wage.
6
Due to the lack of information on how the minimum wages will be set in the near future and possible delays in wage adjustments,
it is important to ensure that the real value of the benefit does not decline over time. It might therefore be advisable to use other variables as a reference for the benefits.
5
A general and once-only additional administrative cost of 15 per cent has been added to each of the benefits for this costing exercise, even though some types of benefits are more expensive to
implement and monitor.
6
This method of indexation of the minimum wage following the average wage increase results in higher minimum wage value for future years compared to previous ILSSA calculations. This has
obviously some direct implications on the total estimated costs of the child and working-age benefits.
