Legislation review necessary to increase tempo on public disbursement activities

Legislation review necessary to increase tempo on public disbursement activities, illustration photo/ baodautu.vn

Assoc. Prof. Pham The Anh from the National Economics University said that changing the slow disbursement of public investment would be very challenging because of legal risks and responsibility.

“I don’t think the slow disbursement is due to the lack of motivation by those responsible for the implementation,” said Anh. “In the past two years, the bottlenecks in public investment were related to the legal environment,” he added, citing legal problems in land clearance. “The Vietnamese government still has the ability to keep up with the disbursement speed by reviewing the legislation related to public investment decisions.”

In 2022, the government expects to disburse $17.69 billion according to Decision No.2048/QD-TTg dated December 6, 2021 on assigning state budget investment for 2022.

“The latest directives are aimed at disbursing public investment on schedule and effectively. However, if the disbursement process is still associated with legal risks and unclear responsibility regulations, those involved will still not act,” Anh commented.

“Now, the legal risks for the executor must be eliminated in order to quickly increase the disbursement rate.”

The government is implementing many regulations in decrees towards the use of official development assistance (ODA) sources. Government officials and some economists believed that a number of reforms will be successfully implemented, streamlining procedures for public investment programmes using ODA capital.

Dr. Nguyen Dinh Cung, former director of the Central Institute for Economic Management, said that in today’s context, resources must be used effectively in order for economic restructuring and recovery to bring new benefits.

“Resources are still allocated under the “ask and give” mechanism, not reaching the projects and investors that are really effective and capable. If this core bottleneck is cleared, the economy’s resources will be activated,” Cung said.

“The decisive factor in the effectiveness of public investment is the dynamism, creativity, and boldness of the leaders of ministries, branches, and localities themselves,” he added.

In the first four months of 2022, a few units had high disbursement rates, such as the Bank for Social Policies (91.12 per cent), Binh Thuan province (33.9 per cent), and Phu Tho province (33.4 per cent), according to the Ministry of Planning and Investment.

The growth engine of the Vietnamese economy lies in the increasing production output and investment. “The government will have to create pressure for change in the short term and also breakthroughs for the medium and long term,” Cung said. He believed that every US dollar of public investment will create great benefits for each locality and the economy.

GDP growth in the first quarter of this year was 5.03 per cent on-year, higher than that in the same periods of in 2020 and 2021 but still much lower than in 2019. Many economists held that the low GDP growth rate reflects temporary and external factors that put pressure on the economy.

Dr. Vo Tri Thanh, director of the Institute of Brand Development and Competition forecasts, “That Vietnam’s economic growth reaches 6-6.5 per cent in 2022 is likely difficult, if the geopolitical tensions continue to stretch further into the year.”

Thanh added, “The government needs to make quick decisions to deal with unprecedented issues, not only with public investment but also with other sectors of the economy. For example, for the 2-per-cent interest rate support package for businesses facing difficulties due to the pandemic, the State Bank of Vietnam is developing a decree. However, we cannot demand that policymaking is both fast and perfect while at the same time ensuring compliance with the usual processes.”