Experts highlight public investment as driver for economic growth

Nguyen Thi Huong, general director of the General Statistics Office (GSO), said that the Government, ministries, sectors, and localities are striving to push the disbursement of public investment to fuel the development of construction, transport, and building materials.

Moving forward to the end of the year, the Government will prioritise capital for large-scale projects, whilst those which are nearly completed will maintain and expand enterprises’ production and business capacity, she said, adding the implementation of public-invested projects will be accelerated to boost aggregate demand.

Huong described those as bold steps in promoting the settlement of site clearance issue, as well as encouraging firms to enter the market, thereby ensuring that there is sufficient supply of materials for investment.

The GSO suggested that stakeholders promote investment-trade activities effectively while simultaneously improving business climate towards liberalisation, facilitation, socialisation, and reduction of business costs for companies.

Moreover, tariff cut policies and increases of credit guarantee for small- and medium-sized enterprises can be viewed as necessary to support businesses, Huong said, highlighting that the Government should promote the equitisation of State-owned enterprises.

Moreover, economist Vu Dinh Anh said the Prime Minister’s resolve to disburse at least 95% of the public investment budget, or over VND675 trillion, equal to US$27.4 billion, is feasible providing that barriers such as complicated regulations on the public investment law and bottlenecks in project implementation are removed.

Anh blamed the slow disbursement of public investment to complex administrative procedures, sluggish site clearance, and a general poor sense of responsibility from officials in many localities.

Furthermore, highly fluctuating raw material costs are another factor which hinders the progress of public investment projects, he said, adding that it is necessary to improve bidding procedures to avoid overruns caused by huge delays.

With the concerted efforts from the whole political system, the Government’s resolve and officials’ innovation and high sense of responsibility, the nation will realise the target set for disbursement of public investment, Anh affirmed.

VNDirect Securities Corporation anticipates that disbursement of public capital this year will grow by 20% to 25% against the previous year, relishing prospects on infrastructure development in the coming years thanks to the settlement of raw material supply shortage and increasing material costs.

Vu Dang Vinh, general director of Vietnam Report JSC, said that this year is a tough year, with public investment being an important factor for the national economy and the construction sector in particular.