Gov’t seeks faster fund disbursement for growth

08:34 | 25/10/2017 Economy

(VEN) - Economists believe Vietnam’s growth still depends mostly on capital, and stagnant disbursement of public investment and official development assistance (ODA) are therefore a hindrance.

govt seeks faster fund disbursement for growth

Less than 50 percent

Representatives of the Ministry of Planning and Investment said at a recent seminar that only 30 percent of the annual public investment disbursement plan had been fulfilled in the first seven months of this year.

The Ministry of Finance reported that in the first eight months of 2017, VND137 trillion (US$6.1 billion) from the state budget was disbursed for public projects, amounting for 38.4 percent of the yearly plan approved by the National Assembly.

Regarding ODA, Luu Quang Khanh, Director of the Ministry of Planning and Investment’s Foreign Economic Relations Department, said VND41 trillion of ODA capital was disbursed in the first seven months, equivalent to 42 percent of the 2017 annual plan and 95 percent of the result achieved in the same period last year.

The Ministry of Planning and Investment attributed the slow disbursement of public investment in the early months of this year to the fact that state authorities had to complete bidding procedures and deal with related papers to develop projects. Difficulties in site clearance also hindered the disbursement of investment capital.

ODA-funded projects also faced similar problems, Luu Quang Khanh said. Moreover, each ODA project is required to undergo compulsory steps, including basic design, total cost estimate, bidding and contractor selection. Delays at any stage will affect the entire implementation process.

Determination needed

Economists believe that in the short term, investment capital remains a lever for economic growth in 2017.

The prime minister on June 2, 2017 issued Instruction 24/CT-TTg regarding major tasks and solutions to achieve the 6.7 percent annual economic growth target set for this year. The government recently promulgated Resolution 70/NQ-CP indicating major solutions to accelerate public investment disbursements. The resolution requires ministries and sectors to deal on a timely basis with any arising problems to speed up disbursements in order to improve the effectiveness of public investment projects.

At his recent meeting with some ministries, sectors and localities to accelerate the disbursement of ODA and preferential loans, Prime Minister Nguyen Xuan Phuc assigned them to issue necessary instructions for site clearance and resettlement.

Economists believe slow disbursements of public investment and ODA not only hinder economic growth but also have an adverse impact on employment, state budget revenues and capital efficiency of the entire economy.

Nguyen Hoa