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November 30, 2022, 3:34 am

Establishing Disaster Prevention Fund: Active response

(13:53:11 PM 29/11/2014)
( - According to Decree No. 94/NĐ-CP, since December 8th 2014, Disaster Prevention Fund will be established in the local nationwide. The innovation of revenues, operating and support expenses is expected to provide a stable and versatile source of income to respond to disasters in the local.

 Establishing Disaster Prevention Fund: Active response

Coping with disaster due to the effects of climate change

A lot of funds are needed for disaster response

It is estimated that disasters damage nearly 15,000 billion VND each year in Vietnam, equivalent to 1.2% of the national GDP. Thus, the economic achievements of a local in 5-10 years can be disappeared in a flood. Many locals relapse into poverty for many times because of natural disasters. Natural disasters are becoming more severe as the state of climate change is predicted to affect Vietnam very heavily. The funds for disaster response are proportional to the extreme of natural disasters.

Currently, in Vietnam, the funds for disaster response are mainly taken from the state budget and foreign assistance. The mobilization of other components involved in disaster prevention is very limited. Therefore, it is difficult to increase these funds.

In addition, natural disasters such as hurricanes, floods often occur in many neighboring localities. Meanwhile, the response to natural disaster is now mostly individual and disjoint between regions. Any local always tries to “ask” for the most budget for occurred disasters without associating capital sources of the neighboring locality to increase resilience.

All stakeholders should be mobilized to contribute funds

To address these inadequacies, Decree No. 94/NĐ-CP defines contribution limit to the Disaster Prevention Fund for all participants. Especially, organizations and individuals are encouraged to voluntarily participate in contributions to the Fund.

For economic organizations that independently keep business account, the mandatory contribution for 1 year is 500 thousand VND in minimum, 100 million VND in maximum and is accounted for the cost of production and business activities.

Salaried officers, public servants and employees of armed agencies, organizations, forces and managers of state enterprises contribute an amount equal to the salary of one day/person/year according to the basic salary after deduction of payable taxes, insurance.

Workers in enterprises contribute an amount equal to the salary of one day/person/year according to the regional minimum wage level. Other workers contribute 15,000 VND/person/year.

Besides, to ensure harmony for the Fund, the Decree clearly specifies the exemptions of contributions including wounded soldiers, families of martyrs, pupils, students, poor people, and people of ethnic minorities in remote areas... who must not contribute to the Fund.

The Fund for natural disaster prevention and control will be established at the provincial level that is managed by the provincial People's Committee and coordinate with relevant agencies to aggregate, assess the damage and needs of support of the locals. With this regulation, whenever there is a disaster, the local will be initiative in funding sources for response and must not wait for the support from the central.

To promote efficiently the source of funds, in addition to mobilizing all stakeholders to contribute, it is required to leverage the support from other funds such as the Adaptation Fund, the Green Climate Fund... to enhance mobilization of foreign aid through key programs and projects. Besides, there should be firm mechanisms of financial coordination, building a close network of associations between the provinces and the agencies to use the source of funds appropriately.

In addition, the increase of autonomy and transparency in the use of funds in locals is also very important for the source of funds to be used for the right purpose, timely response to natural disasters, and reduction of damage to people and assets.

Hong Phuong

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