Supporting Administrative Reform of Social Security in Vietnam
The government of Vietnam (GOV) wanted to reform its inadequate and corrupt social security administration in favor of a modern, fair, and transparent system. Although the government had outlined a strategy, it felt that the country did not have the institutional capacity to implement it, and so it looked to the World Bank for help.
The World Bank’s South-South Experience Exchange Facility funded a knowledge exchange to help Vietnam’s Social Security (VSS) administration learn from the experiences of Latvia, Turkey, and Bulgaria where the World Bank had worked with the government on social security administration reforms. A group of high-level VSS officials visited their peers in the three countries to learn how they had reformed their systems for administering old age pensions and health insurance.
The delegates learned how each country’s Social Security Agency (SSA) had managed business process re-engineering and implemented information and communication technology (ICT) upgrades. They also learned how each SSA had managed its human resources, and procedures for overseeing and managing social insurance reserves. Perhaps most important, the government of Vietnam (GOV) acquired the analytical tools to strengthen its policymaking capacity.
“It was interesting that lessons could also be learned from mistakes,” said Nga Nguyet Nguyen, Senior Economist with the World Bank. She added that this was “the first time [Vietnamese] officials learned about the importance of business processes re-engineering. Before the trip, [they] always thought of social security reform as development and application of ICT.”
Beneficiaries / Participants
Social security administration in Vietnam has suffered from low compliance, high collection costs, and corruption. The government wanted to reform and modernize social security administration to be fair and transparent, and to promote voluntary compliance balanced with effective enforcement and revenue collection.
The GOV identified key areas that needed attention: a fragmented legal framework, poor coordination and information sharing between government agencies, lack of knowledge about social security laws and compliance procedures, inadequate professional skills, and inadequate ICT systems. The GOV had articulated a strategy for reforming the social security administration, and had a strong commitment to implement it, but lacked both the institutional capacity and a detailed reform plan.
The GOV requested support from the World Bank to learn from the experiences of other middle-income countries that had modernized their systems for old age pensions and health insurance. VSS was particularly interested in countries that had implemented World Bank projects for social security reform. Latvia, Bulgaria, and Turkey were selected based on these criteria.
The Bank’s South-South Experience Exchange Facility then funded a knowledge exchange to support Vietnam’s Social Security (VSS) administration in this objective. Key national and provincial officials from VSS visited their peers in the other three countries to learn how they had reformed their systems for old age pensions and health insurance, and especially to learn about the business processes, information management systems, and IT solutions.
The government of Vietnam (GOV) is undertaking administrative reforms to meet the growing demands of becoming a modern middle-income country, and this involves many important policy reforms in social protection programs. The knowledge acquired during the study tour will help Vietnam’s Social Security Agency to design a comprehensive reform program to modernize its social security system. Comprehensive reforms would allow the GOV to better monitor and assess whether the poor can access pension and health insurance programs, and to monitor the quality of health services provided to the poor. Better information management systems will provide timely inputs for evidence-based social insurance policies.