Public investment disbursement has been very sluggish this year and it will take great efforts to complete 95% of the plan, says Planning and Investment Minister Nguyen Chi Dung.
One of the factors adversely affecting Vietnam’s GDP growth is slow public investment disbursement. Do you agree?
Globally and at home, the first months of 2023 presented many difficulties and challenges. There were rapid and unpredictable developments, especially the impact of tightened monetary policies to curb inflation in a number of major economies and the decline in economic growth, investment and trade on a global scale.
This has seriously affected Vietnam - an open, developing economy with a modest scale. Domestic production and purchasing power as well as exports have all faced many difficulties and have not achieved their expected growth rates, especially in key commodity groups such as telephones, electronics, textiles, footwear and seafood.
Against this backdrop, the government and the Prime Minister have issued drastic instructions and policies that have initially proven their effectiveness. GDP growth in the second quarter was estimated at 4.14%, higher than the first quarter's 3.28%. Notably, solutions to accelerate disbursement of public investment through specific actions including the issuance of resolutions, directives and dispatches and the establishment of working groups led by Deputy Prime Ministers, the Minister of Planning and Investment and the Minister of Finance to remove disbursement difficulties have delivered practical results.
In the first seven months of 2023, public investment disbursement was estimated at 37.85% of the assigned plan, higher than the 34.47% for the same period last year. This has made an important contribution to the country’s economic growth in the second quarter and the first half of the year. Many socioeconomic recovery projects and development program have basically completed their procedures and are focusing on implementation.
Several expressway projects have been kicked off, including Ho Chi Minh City’s Ring Road 3, Hanoi’s Ring Road 4, Cao Lanh-An Huu Expressway Phase 1, Chau Doc-Can Tho-Soc Trang Expressway; Khanh Hoa-Buon Ma Thuot Expressway; and Bien Hoa-Vung Tau Expressway Phase 1. Meanwhile, the Nha Trang-Cam Lam and Vinh Hao-Phan Thiet expressways have been inaugurated.
Over VND700 trillion ($29 billion) in public investment capital has been allocated for 2023, an increase of about 23% from the 2022 plan and the largest level in the past 10 years. We can believe that positive signals from public investment disbursement in the second quarter and in the coming months will be a very important driver of economic growth this year.
What are some of the key policies and solutions put forward to meet the planned public investment disbursement target?
The amount of public investment capital to be disbursed from now until the end of the year is huge and it will require great efforts by agencies at all levels and sectors to meet the disbursement target of over 95% of the total plan assigned by the Prime Minister. For this, the following eight solutions are key.
Firstly, all agencies must drastically and effectively implement the government's resolutions and the Prime Minister's directions on accelerating the allocation and disbursement of public investment capital, the three national target programs in 2023, and the socio-economic recovery and development program.
Secondly, leaders of ministries and agencies, and chairpersons of people's committees of provinces and cities need to uphold the sense of responsibility in public investment disbursement. Heads of ministries, agencies and provincial-level people's committees should take direct charge of specific projects to inspect, urge and promptly clear obstacles to speed up the disbursement process.
Thirdly, ministries should review and perfect mechanisms, policies and legal regulations on public investment in order to reduce administrative procedures and remove difficulties for public investment activities, especially those related to site clearance and supply of raw materials.
Fourthly, speeding up disbursement must go hand in hand with ensuring quality of work and the efficient use of public investment capital. It is necessary to actively review and evaluate the disbursement capability of each project in order to make plans to transfer capital from projects experiencing slow disbursement to well-performing projects that lack capital.
Fifthly, we should harmonize capital between the socio-economic recovery program and the five-year medium-term public investment plan for 2021-2025 in accordance with Resolution No. 93/2023/QH15 of the National Assembly, the directions of the government and the guidance of the Ministry of Planning and Investment.
Sixthly, there must be sanctions that strictly punish investors, project management units, organizations and individuals who intentionally hinder or show a lack of responsibility in capital allocation, capital adjustment, project implementation and public investment disbursement. We must promptly replace officials, civil servants and public employees who show weak capacity and misconduct, and resolutely handle wrongdoings in public investment management.
Seventhly, it is necessary that competent authorities urgently to promulgate specific regulations within their jurisdiction to institutionalize the policy of protecting officials who dare to think, dare to do, and dare to take responsibility for the common good.
Eighthly, the government should strengthen inspection and supervision; maintain operations of five working groups formed under Decision No. 235/QD-TTg and hold quarterly meetings between cabinet members and localities to inspect, urge and remove difficulties, according to the Prime Minister’s Decision No. 435/QD-TTg.
What is your forecast for Vietnam’s GDP growth in 2023 and how will public investment contribute to this?
To achieve the yearly growth target of 6.5% set by the National Assembly, there needs to be a lot of effort in the last months of the year to promote the effectiveness of all policies and resources and make the most of opportunities.
Ministries, agencies, and local authorities should actively remove difficulties for enterprises and promote the growth drivers of domestic consumption, investment and exports. It is necessary to clear obstacles and sustainably develop the stock, real estate, corporate bond and labor markets, step up administrative reforms and improve the business environment. They should not issue new policies and regulations that create unnecessary costs and procedures.
It is also necessary to implement drastic solutions to promote the disbursement of public investment capital, putting key transport projects and works into operation. This would further affirm the role of public investment as "a decoy to attract private resources,” creating an important driving force for economic growth.