The state budget implementation arrived on the National Assembly’s
October 31 session agenda.
Member of National Assembly
Economic Committee and chairman of Civil Engineering Construction Corporation 5
(Cienco 5) Than Duc Nam shines further light on the budget situation for
2012-2013.
Fiscal policies are crucial to
firms’ development. Would you shed some light on the fiscal policies in the
year to date?
In the first nine months,
disbursed state investment development capital only reached 71 per cent of the
year’s projection whereas respective figures for government bond capital and
state investment development credit were 63.3 and 84 per cent.
These key state-funded capital
sources dropping set targets would lead to total development investment capital
in 2012 slide to 29.5 per cent of the GDP only (VND870 trillion or $41.4
billion), far below 2011’s level 34.6 per cent and dropping 33.5 per cent
projection for 2012.
What would be the consequences when set financial sources were not fully
distributed?
The state dropping state capital
disbursement targets would discourage other capital sources from making further
investment ventures which has placed firms into difficulty.
I met leaders from 200 businesses
based in central Danang and got to know that most of firms were in the woods on
the back of low consumption and persistent debt situation.
Let’s take the case of Cienco 5.
In early 2012, we sought to achieve total revenue VND4 trillion ($190 million)
but just posted around VND1.7 trillion ($81 million) in the year to end of
September.
Sliding revenue was due to a
bunch of factors with the most important one being unpaid payments for
completed workload by the state. At many projects, we closely observe progress
targets, but have yet to receive payment from the state, meanwhile we ought to
pay bank interest which has bitten into the company’s profits.
Other businesses in other fields
face a similar situation and this has had chain effects on other fields of the
economy.
What will be the case for 2013?
In 2013, total development
investment capital of society may be a bit higher compared to 2012 at around
29.7 per cent of the GDP, tantamount to VND1,003 trillion ($47.7 billion)
including VND180 trillion ($8.6 billion) to be sourced from the state budget,
VND45 trillion ($2.1 billion) from government bonds and VND60 trillion ($2.8
billion) from state investment development credit.
In my view, the state would need
to fully disburse these amounts to fuel investment from other sectors as well
as from external sources. Capital sources from state-owned enterprises sector,
private business and the community are estimated to hike 20 and 29 per cent,
respectively in 2013 compared to in 2012.
However, non-state sector’s
capital sources would increase only when the state as the biggest investor also
scaled up investment.
Will inflation come back once financial and monetary policies were
loosened?
There need to be multiple measure
packages to curb inflation, but if we adopted too cautious approach through
exercising stringent fiscal and monetary policies this would hurt firms.
In current context,
underperformed businesses should be allowed to go bust whereas practical fiscal
and monetary policies are urgent to help firms temporarily incurring
difficulties get through this tough time.
Only when firms resume growth and
get back on development track could the state be in a position to finalise 2013
budget revenue target of VND807 trillion ($38.4 billion).
Manh Bon | vir.com.vn
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