Mr. Michael Kokalari - Director of Macroeconomic Analysis and Market Research at VinaCapital - assessed that Vietnam is implementing comprehensive reforms in the public and private sectors.
The goal is to increase GDP growth potential by promoting the role of the private sector in the economy, streamlining the government apparatus, and addressing bottlenecks that reduce economic efficiency.
“The first positive signs have begun to appear, as public investment disbursement increased by an impressive 40% in the first half of this year, reflecting improvements in administrative procedures - a barrier that had stalled disbursement in previous years,” said Mr. Michael Kokalari.
In fact, public investment disbursement recorded an increase in the second quarter of this year, driven by two main factors: higher awareness of accelerating public investment disbursement and promoting decentralization and delegation of power to localities to shorten the process and directly implement key projects.
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| The $13 billion Long Thanh airport is being sped up. |
In particular, public investment disbursement is increasing sharply at the provincial level, with an increase of more than 40% compared to the same period last year. Some provinces and cities are merging administrative units, along with other government initiatives, which have helped speed up project approvals.
In addition, the National Assembly has passed a series of measures allowing local authorities to approve large-scale projects such as airports and urban areas over 50 hectares, which previously had to be submitted to the Prime Minister for consideration. At the same time, the approval process for public projects at both the central and local levels is being streamlined, which has helped increase public investment disbursement.
VinaCapital experts cited that the merger of 63 provincial-level State Treasuries, 20 regional-level State Treasuries and the abolition of district-level State Treasuries has helped reduce the number of contacts between the treasury system and businesses. Contractors can now submit their applications online to regional treasuries, shortening the capital disbursement time to only 1-3 days, instead of the previous process of having to come directly or send documents by post to the treasury where the transaction took place.
In addition, national-scale projects are also being accelerated. The start and completion time of some major projects such as Long Thanh airport (13 billion USD), Hanoi and Ho Chi Minh City beltway (13 billion USD), Lao Cai - Hanoi - Hai Phong railway (8.4 billion USD) has been shortened by 3 years.
VinaCapital believes that Vietnam is in a favorable position to maintain strong disbursement momentum for infrastructure investment. The government’s public debt is currently below 40% of GDP, the budget surplus in the first five months of the year reached over 5% of GDP, and there is more than $45 billion undisbursed for infrastructure. The main obstacle to slow disbursement in the past has been largely due to legal and administrative problems.
Source: https://tienphong.vn/ly-do-von-dau-tu-cong-dang-chi-tieu-rat-manh-post1758598.tpo
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