Public investment,
while widely seen as inefficient, has also slipped out of central agencies’
control due to the excessively decentralized mechanism, according to reports
prepared for a seminar to be held in Hanoi on Thursday.
The country’s leading economic experts will gather
at the seminar “Restructuring public investment and State-owned enterprises” in
Hanoi to once again discuss the thorny issue of public investment and how to
make remedial measures.
Public investment is now beyond the control of the
State management agencies, causing waste of resources and distorting the
economic structure, experts said in their reports prepared for the event held
by the Vietnam Institute of Economics.
Vo Dai Luoc of the Institute of World Economics and
Politics said there are 440 universities and colleges, 267 industrial parks, 18
coastal economic zones and 28 border gate economic zones covering millions of
hectares.
He wondered where capital can be sourced from to
efficiently utilize such a huge land fund.
Luoc ascribed such situation to Decree
16/2005/ND-CP, which allows ministerial and provincial authorities to assess and
approve projects of Group A, worth over VND200 billion each, Group B, VND30-600
billion, and Group C, VND30 billion or below.
“Central agencies seem to supervise and inspect
perfunctorily and not impose any strict disciplinary sanctions. Consequently,
there are now 63 municipal-provincial economies and one national economy in
Vietnam,” said Luoc in his report obtained by the Daily.
He added the decree has allowed for all-out
delegation of power to provincial authorities in terms of public investment.
Economic expert Le Dang Doanh added there are 20
international seaports under development and 22 civil airports, including eight
international ones, under construction or expansion across the country.
He quoted the Ministry of Planning and Investment
as saying that more than 20,500 public invested projects got off the ground in
2011, worth over VND123 trillion.
“What matters is that the approval for investment
is often based on socio-economic development requirements and capital
mobilization capability, whereas the efficiency standards of socio-economic
investment are not strictly regulated,” Doanh underscored.
Vu Tuan Anh of the Economics Institute cited the
international statistics saying that Vietnam’s Government is the biggest
investor in South Asia and Southeast Asia in terms of investment capital over
gross domestic product (GDP).
Furthermore, the State holds the majority of social
wealth and has greater control over social wealth than other governments in the
region.
Anh stated the role of the planning ministry has
been weakened to the extent that the ministry can no longer ensure the balance
between investment demand and ability to satisfy the requirements on capital as
well as materials, technology and technical manpower.
As a result, many operational projects have
constantly run into capital shortage. Meanwhile, trade deficit shoots up due to
import of materials and equipment for investment.
Expert Doanh noted public investment is a product
of the ask-and-give mechanism, which has led to inefficient investment, with
losses of 20-30% and expensive constructions that sometimes break down before
they are put into service.
“It is obvious that the inefficiency of public
investment takes root in the planning and approval process, meaning the institutional
mechanism and the State apparatus. If no change is made, it will be hard to
restructure public investment,” said Doanh.
SGT
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