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Transportation is one of the areas of concentrated public investment. In the photo: A segment of the Hanoi – HaiPhong highway viewed from above. Photo: Internet.

Five months and a quarter of distance

Economic growth in 2020 depends heavily on the disbursement of public investment, so promoting the disbursement of public investment is a key task that has been directed by the Prime Minister since the beginning of 2020, since the Covid-19 pandemic appeared and negatively impacted the domestic economy.

The Prime Minister has repeatedly mentioned the need to focus on deploying fivefactorsto boost GDP growth in 2020, of which, public investment is considered a key solution.

Afterfive months, according to data from the General Statistics Office (MPI), the disbursement of public investment has begun to have positive signs after the Covid-19 pandemicwas successfully controlled.

In the context that the nationwide situation of Covid-19 has been controlled, construction investment activities in the provinces and centrally-cities have basically returned to normal. Projects and works are being focused on speeding up inimplementation. The growth rate of investment capital from the state budget in May and the first five months of 2020 reached the highest level in the period of 2016-2020.

In the first five months, public investment disbursement reached more than VND116 trillion, equaling 25% of the year plan and up 15.6% over the same period last year. Of which, in May alone, disbursed public investment was estimated to be over VND31 trillion, up by 17.5% over the same period last year.

The Ministry of Finance’supdated data shows that disbursement of the plan for public investment in 2020 of ministries, sectors and localities by the end of May 31 is over VND122.2 trillion. There are more than 30 ministries, branches and localities with disbursement rates of over 30%, with some units disbursing most of the assigned capital such as Vietnam Writers Association (93.59%), Development bank (61.09%), State Audit (43.14%), NinhBinh (66.6%), and Hung Yen (50.07%).

In fact, there have been many very positive signs showing the determination to disburse all public investment in 2020. Many localities such as Hanoi, Da Nang, and QuangNgai have shown their determination to disburse all of this amount in 2020.

Recently, the leader of Ho Chi Minh City said this locality will group the projects that are in trouble (investment procedures, construction, bidding; land procedures, site clearance; about plans capital planning and procedures) and select a number of key projects with low disbursement to advise and discuss solutions for investment in the Inter-Sectoral Working Group. It is acknowledged that disbursement of VND8,480 in public investment, but this figure is not enough to revive the economy after the Covid-19 pandemic. It has not become a key factor to revive the city economy in the new normal conditions after the Covid-19pandemic, the leaders of the City People's Committee requested the concerned units to ensure that the plan for the date of June 30, the disbursement rate must reach 50% or more, by July 31 the disbursement will reach 60% - 70% and by October 15, disbursement must reach 80% or more.

Recently, the leaderof the Ministry of Transport also instructed the Deputy Ministers to follow the construction site in order to promptly remove difficulties to disburse nearly VND38 trillion of the Ministry's public investment capital. The Minister of Transport also requested the Ministry's advisory agencies to urgently review the legal documents submitted by the investors and the Project Management Board to focus on directing and handling according to regulations, meeting the progress of project implementation.

In Hanoi, the Hanoi 3 Ring project, section of Mai Dich - Nam Thang Long, using Japanese ODA loans is also being accelerated by the Ministry of Transport to be able to begin operation in September 2020.

Optimize public investment

World Bank experts said that increasing capital spending will havethe necessary dual impact on the economy. According to estimates in Vietnam, when public investment disbursement increases by 10%, GDP growth will increase by 0.6%. The World Bank recommends that Vietnam should optimize public investment, considering this a fiscal stimulus solution. In the post-Covid-19 economic recovery roadmap, the core task is to focus on major projects to enhance connectivity along the roads and to develop a multimodal transport network.

“Public investment in major infrastructure projects such as building the North-South Expressway, developing the national highway system, expanding the airports in Ho Chi Minh City and Hanoi, building urban railways in Ho Chi Minh City and Hanoi, improving transport connectivity around major ports such as CaiMep–ThiVai and LachHuyentocreate exponential effects, stimulating demand for local contractors, boosting production activities of plants. It is necessary to disburse funds allocated annually instead of investing in new projects,”the World Bank recommends.

Disbursing 100% of public investment in 2020 with about VND700 trillion is considered an order for this year's public investment disbursement campaign. Obviously, in the remaining period, it will be a very arduous task if there is no strong participation from ministries, branches and localities.

Onthis issue, the National Assembly Standing Committee agreed to submit to the National Assembly to transfer three sections on the North-South Expressway from PPP to public investment. If approved, this is considered a motivationto speed up the North-South expressway and at the same time contribute to promoting public investment and economic growth.

According to economic expert Ngo Tri Long, promoting disbursement of public investment is considered the most important factorfor GDP growth in 2020. Although the Covid-19 pandemic caused an economic recession, the rate of public investment increased sharply compared to the previous year with other areas.

“This makes me both happy and worried. I am glad because public investment disbursement will promote growth and contribute to economic recovery, but worry that due to public investment, there are potential risks, losses, mistakes, corruption, quick disbursement also brings concerns,”said expert Ngo Tri Long.

In order to promote the effective and quick disbursement of public investment, Ngo Tri Long said that the State should conductinspection, examination and supervision, and strictly punish individuals and organizations that cause stagnation or slow disbursement. However, promoting public investment for economic growth is not at all costs, it is still required to comply with the Law on Public Investment, how disbursement must be really effective, avoiding the phenomenon of taking advantage of this opportunity to cause losses of state budget money.

This issue was further reaffirmed in Resolution No. 84 on the tasks and solutions to continue removing difficulties for production and business, promoting disbursement of public investment capital and ensuring social order and safety in the context of the Covid-19 pandemic just issued by the Government. At the same time, the Prime Minister has just sent documents to localities and ministries and branches to accelerate the disbursement of public investment capital in 2020.

There are a lot of strong messages about the disbursement of public investment,it is expected to make a strong breakthrough to boost GDP in 2020 to achieve the highest results.