DIGIVESTASI - Vietnam Plans to Streamline Ministries and State Agencies, The Vietnamese government is planning to reduce the number of ministries and state agencies in what is considered the country’s largest bureaucratic reform in its history. This effort aims to address bureaucratic inefficiencies, enhance budget efficiency, and channel funds into development projects, as reported by Bloomberg on Monday (December 16, 2024).

The reform plan involves a reduction of 15-20 percent of ministry and state agency units, including a decrease in the number of civil servants. The draft regulation was approved just days after Vietnam’s parliament extended the value-added tax (VAT) cut from 10 percent to 8 percent.

Restructuring of Ministries and Agencies

According to a Reuters report on Tuesday (December 17, 2024), at least five ministries, four government agencies, and five state-owned television channels are included in the list set to be dissolved. Vietnam also plans to merge several key ministries and disband commissions managed by the Communist Party of Vietnam (VCP) and some state-owned media organizations.

The VCP's new leader, To Lam, is the primary proponent of this idea. The proposal is scheduled to be discussed in parliament in February 2025. If approved, the number of ministries and government agencies will drop from 30 to 21. The target is that by April 2025, after the reform is completed, Vietnam will have only 13 ministries, four ministerial-level agencies, and four additional government bodies.

Under the consolidation plan, the Ministry of Finance and the Ministry of Planning and Investment will be merged into the Ministry of Finance and National Planning. Meanwhile, the Ministry of Transport will combine with the Ministry of Construction, and the Ministry of Labor, Disabled Persons, and Social Affairs will be merged into the Ministry of Home Affairs.

Communist Party and State Media Also Restructured

The Communist Party of Vietnam and the National Assembly will also undergo restructuring. Certain bodies, such as the Central Commission for Foreign Affairs and the National Assembly’s Committee for External Relations, will be integrated into the Ministry of Foreign Affairs. State-owned media organizations, such as radio stations, will be disbanded, with their staff reassigned to larger news organizations.

This reform is not the first of its kind. Since the early 1990s, Vietnam has gradually reduced the number of ministries, from 36 to 22 by 2021.

Diverse Views on Ministry Reductions

According to To Lam, the reform is expected to create a lean, strong, and efficient government. Nguyen Giang, a researcher at the ISEAS Yusof Ishak Institute, stated that this policy has the potential to streamline bureaucracy, improve governance efficiency, and drive economic growth.

Former Director of the Central Institute for Economic Management, Nguyen Dinh Cung, argued that reducing government agencies would expedite administrative processes for investment, infrastructure projects, and real estate schemes. However, he also warned of the potential impact on thousands of employees who may face layoffs.

Impact on Investment and the Economy

On the other hand, the reduction in ministries is expected to affect foreign investment. Leif Schneider, head of the international law firm Luther in Vietnam, cautioned about potential delays in project approvals during the adjustment process. However, he noted that if the reform is well-executed, it could create a more attractive environment for investors in the long term.

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