PM Phuc urges faster public investment disbursement to support growth

Vietnam has successfully controlled the COVID-19 pandemic and is making efforts for ensuring economic growth when the economy was badly affected travel restriction measures.

The government has set up a delegation to inspect, urge and remove difficulties and obstacles for accelerating the disbursement of public investment capital in a number of ministries and localities.

Public investment is one of the most important elements that helps the economy to recover and grow. It is expected to create jobs and income for people since 1% of investment contributes 0.06% to the GDP growth.

As of end-July, the public investment disbursement at localities reached 45%. However, at some localities, the disbursement was conducted at a very slow progress, under 20%, PM Phuc stressed.

However, there is opinion that the widespread and uncontrolled disbursement could lead to the loss of State budget and natural resources.

Economist Pham Chi Lan told VietnamFinance that the government should not disburse capital for public investment projects massively. The government should give priority for the efficiency.

Economists say that in order to help recover and boost economic growth, there are three most important factors including public investment, consumption and export. Public investment is the key factor with advantages, when the remaining two factors are considered as difficult to recover soon.

"We have learned several costly lessons on inefficient public investment”, said Lan, adding there are not enough conditions to be effective, transparent, and then left unfinished projects, causing resource losses.

Sharing Lan’s opinion, Assoc. Prof. Pham The Anh, Chief Economist of the Institute for Economic and Policy Research (VEPR) said that promoting public investment should focus on key projects and existing projects.

► Economists see Vietnam’s 2020 GDP to grow 3.8%