Vietnam to use public investment to reach ambitious growth target

By    July 25, 2016 | 02:29 am PT
With money sitting there waiting to be spent, the PM is saying spend it.

Prime Minister Nguyen Xuan Phuc has repeatedly urged all ministerial agencies and local authorities to accelerate the disbursement of public investment funds to ensure the country does not miss its economic growth target of 6.7 percent this year, the Vietnam News Agency reported

The central government has released funds to ministries, departments and local agencies, but disbursement in the first half of this year has been reportedly sluggish.

Ministerial agencies and local authorities disbursed some VND83 trillion ($3.7 billion) in the first five months of this year, according to the Ministry of Planning and Investment.

That means only 33 percent of the total VND250 trillion has been utilized, lower than the 45 percent used in the same period last year.

Official statistics show that the government disbursed $1.85 billion or 70 percent of ODA funds in the first five months of this year, which translates into $22 billion left unused, said Mai Tien Dung, chief of the government office.

In order to ensure how these funds are utilized, ministries, departments and localities have to submit reports to the government on how they will spend their allocated budgets.

Cumbersome paperwork has also been blamed for slow disbursement of public investment funds.

The government will strictly punish and replace officials who block the disbursement, said Deputy Prime Minister Vuong Dinh Hue at a meeting with top officials from the Ministry of Investment and Planning.

Policymakers said that scaling-up public investment, improving infrastructure and filling in development gaps could boost economic growth.

The Southeast Asian country could miss its economic growth of 6.7 percent this year after a historic drought badly hurt one of the country’s main engines – the agricultural sector.

Vietnam’s gross domestic product growth dropped to an estimated 5.52 percent in the first half of this year while the growth rate for the same period last year was recorded at 6.32 percent, according to the Government Statistics Office.

In response to the sluggish disbursement, Prime Minister Nguyen Xuan Phuc has set up a working team to facilitate the release of public investment funds and assigned Deputy Prime Minister Vuong Dinh Hue to head the team.

“The PM will review each individual case that has been delayed for a whole year. Ministries, departments and agencies that have been slow to utilize public investment funds should not ask for the Prime Minister to approve further delays,” said Deputy Prime Minister Hue.

He said that next year the government will not allocate more funds to investment projects whose disbursement rates were below 30 percent by the end of September.

The PM has asked relevant authorities to make adjustments to decrees to quicken capital disbursement in 2016.

Under Vietnam’s newly-revised Public Investment Law, the government will release and allocate public investment funds in accordance with the country’s five-year socio-economic development plans in order to maximize efficiency and to facilitate transparency in public investment.

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