Oct 18, 2011

Vietnam - Public investments surge despite inflation fight



HCMC – The nation still has seen the number of state-funded projects expanding this year, ignoring the Government’s drive to cut public spending in a bid to fight high inflation in Vietnam.

According to a report of the Ministry of Investment and Planning, there were over 6,700 projects using at least 30% State capital kicking off in the first six months of the year, rising by over 1,000 projects compared to the same period last year. Nearly 4,700 projects were completed and put into operation.

The data was collected from 105 out of 124 local agencies, and State-owned economic groups and corporations.

The ministry in the report expressed concern over the modest rise in the number of completed projects while that of new projects shot up strongly. Meanwhile, the Government in Resolution 11 rejected commencement of new projects using State capital or proceeds from government bond sales, except projects for coping with natural disasters and those of national importance.

Some localities have high ratios of new projects underway such as Dong Thap with 45%, Danang 41.3%, Vinh Phuc 56%, An Giang 55.8% and Yen Bai 42.3%.

Meanwhile, foot-dragging projects remain a big problem. In the first half of the year, there were over 2,800 projects, or over 11%, falling behind schedule while the ratio was 9.7% in 2010. This triggers high investment costs, makes the projects ineffective and causes adverse impacts on the economy.

Tan Duc - The Saigon Times Daily



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