Dr. Nguyễn Đức Kiên
Dr. Nguyễn Đức Kiên, Head of Prime Minister Nguyễn Xuân Phúc’s Economic Advisory Council, speaks to government on-line newspaper about the key reasons that led to the slow disbursement of public funds because of the COVID-19 pandemic
What are the causes leading to the slow disbursement of public funds?
A key problem is the cumbersome administrative procedures.
In reality, quite a few projects have completed the construction phase, yet they could not complete financial settlements. This has led to the problem of outstanding debt in capital construction, the construction of the Long Thành International Air-port is an example. According to the project owner, a key problem is the lack of co-operation between the Ministry of Natural Resources and the Đồng Nai People’s Committee in the course of developing the unit price in the land settlement for people whose land has been used for the airport construction.
In 2015, construction of the Long Thanh International Airport was launched. Under the project’s document, the Đồng Nai People’s Committee is in charge of land settlement with a projected total investment cost of VNĐ 18,000 billion (US$779 million). Due to the delay in the financial settlement, by the year 2017 the projected cost jumped to VNĐ 23,000 billion (US$ 995 million). However, until now, the project remains on paper and no doubt, if the land settlement is not done, the cost will be much, much higher.
The revised Public Investment Law came into effect on January 1st 2020. Will it be able to solve the problem?
It is indisputable that public investment is always much more complicated than private investment. We have all agreed that our 2014 Law on Public Investment is very progressive compared to those from other countries. Yet, the authorities in many localities want the project to apply the old Public Investment Law.
According to the Law on Environment, environmental impact assessment (EIA) is an essential element that all projects must complete. But the question here is should the EIA be done in the pre-feasibility study (Pre FS) or in the FS report. If it is in the Pre FS, no doubt, the project owner cannot have all the information to write in the Pre FS report. Until now this problem remains unsettled.
What should we do to speed up the process of the disbursement of the public funds this year?
We only have more than four months left to disburse public funds for 2020. To my knowledge, public investment has contributed between 0.4-0.5 percent to the country’s GDP. It is projected some VNĐ 700,000 billion (US$30.3 billion) must be disbursed. The disbursement of such a huge sum of money is very demanding.
We all know that this is a chronicle disease of our economy. In Việt Nam, construction activities are often done in the dry season – from September to May. So right from February 2020, when the COVID 19 broke out, Prime Minister Nguyễn Xuân Phúc came up with a projection that the public investment would become a driving force to the national economy to develop. Yet regrettably, the disbursement of our public investment has taken place very slowly. We are now living in a society ruled by law, it is the tasks of all ministries and localities to do their best to carry out their assignments. And if they face any difficulties they then should report to the Government and ask for help. — VNS