Concerted efforts towards public investment acceleration

At the start of this year, the prime minister instructed all levels of the political spectrum to strive to reach the national public investment disbursement target. What progress has been made so far this year?

Tran Manh Ha, director of Department of Expenditure Control, State Treasury

The government has been focusing on accelerating public investment disbursement, asking for a strong commitment from all stakeholders.

This instruction was reiterated during an online conference on July 16 that focused on accelerating public investment disbursement in 2024.

Despite this strong determination, the outcomes remain modest. According to the Ministry of Finance’s (MoF), just $9.67 billion of public investment sources were disbursed in the first seven months, equal to just 32.2 per cent of the National Assembly's target, and 34.68 per cent of the government's goal.

What has the government been doing to facilitate the process?

Public investment engages diverse links and stakeholders. If any of these links are disrupted, it affects the whole process.

The prime minister has asked leaders of ministries, sectors, and localities to accelerate the process and remove any obstacles related to building materials supplies, investment preparation, and contractor selection.

To troubleshoot capital disbursement problems, in late April the PM issued a directive to propel socioeconomic development, focusing on public investment.

Public investment is deemed one of the three pillars of economic growth, so the PM has urged ministries, sectors, and localities to take more drastic measures to quicken site clearance and the execution of pivotal projects.

Since then, the pace of disbursement has posted marked improvements thanks to enhanced discipline and commitment from relevant stakeholders.

Individuals and organisations that cause delays to public capital allocation have been punished, and even replaced.

To ensure progress, the government has regularly asked all parties to work on detailed capital disbursement plans on a quarterly and monthly basis, and properly execute their plans.

Besides the chronic problem of site clearance, issues have emerged in existing policies.

Disbursement of public investment capital requires political determination and the swift removal of obstacles arising during the implementation process. In this spirit, the government has directed ministries and branches to review regulations to propose amendments, creating improvements for capital disbursement.

Directive 12 requires the MoF and the State Treasury to accelerate payment procedures, as capital disbursement is the final link in public investment. How has the treasury handled the task so far?

The State Treasury has simplified and shortened the time and procedures for public investment capital disbursement by promoting digital transformation and payments through online public services.

At the outset of the year, it directed the entire system to embrace payment control of construction initiatives, ensuring compliance with plans assigned by competent authorities and payment control principles. The treasury has also been analysing problems facing public investment capital disbursement and reported them to authorities for consideration and settlement.

The State Treasury has reached about half of the government bond capital mobilisation plan for 2024 of approximately $16.67 billion. This is the largest ever government bond capital volume, with a very low interest rate of just 2.33 per cent per year, compared to the average mobilised interest rate of 3.21 per cent per year in 2023.

The capital volume is now sufficient, payment procedures are convenient, and payment documents are simplified, ensuring quick capital disbursement for investors and contractors.