The duties are supervising and speeding up disbursement for public investment projects in 2022. 

This is the second time within a few months that the Prime Minister has had to urge disbursement of public investment capital. At the Government meeting in March, he said the disbursement of public investment and ODA capital in Q1 had not significantly improved and was asked to find and remove difficulties to speed up disbursement.

The urging by the Prime Minister, from words to action, can show how slowly the disbursement has been going. The state’s money is lying dormant in the treasury, while the economy and businesses are facing big difficulties because of the pandemic.

A report of the Ministry of Planning and Investment (MPI) showed that the disbursement of public investment by the end of April 2022 had just equal to 18.48 percent of the yearly plan. Forty three out of 51 ministries and 28 out of 63 localities had disbursement rates of below 17 percent, and VND39 trillion, or 7.4 percent of plan, of the state budget has not been allocated.

Particularly, 17 ministries and central agencies have a disbursement rate of zero percent. No progress has been reported in the disbursement of foreign loans and only 3 percent of the plan has been implemented.

Placing the blame for slow disbursement on heads of agencies?

According to Hoang Van Cuong from the National Economics University, there are suggestions that the 17 ministries and central agencies with a disbursement rate of zero percent need to be criticized.

“It is a big problem that the disbursement is going slowly and capital cannot be used,” he said at a workshop about Vietnam’s economy in 2021 and prospects in 2022.

Minister of Planning and Investment Nguyen Chi Dung said at a meeting that the slow disbursement is attributed to some ministries, branches and local authorities which are not serious enough in giving commands and issuing solutions to speed up project execution.

“The problem is the policies are the same, but some ministries and localities have good disbursement, while others have very slow disbursement,” Dung said, implying that the problem doesn’t lie in the mechanism and policies. 

He also pointed out factors that may affect implementation of projects. The building material prices (steel, sand, cement, etc…) have increased and contractors have slowed down the project execution with a hope that the prices will go down later.

“If they execute the work quickly, they may incur losses, which would affect the financial plans of the projects,” Dung explained.

The statistics about the slow disbursement data in the first four months of the year has sent unsettling signals about the disbursement of the whole year. The pressure, therefore, is high for the remaining months.

Hoang Van Cuong, a National Assembly Deputy, said one of the reasons behind the slow disbursement is that many localities hesitate to make decisions.

He said many leaders “play it safe” by consulting with higher authorities. They don’t dare make decisions and take responsibility for their decisions.

MPI has asked the government to request the heads of ministries, central agencies and local authorities to consider the disbursement of public investments as one of the key political tasks in 2022. They need to take the initiative in removing the problems related to land and natural resources, and take accountability for disbursements as well as investment efficiency of projects.

Ministries, branches and localities that have not fully allocated the central budget investment plan in 2022 have to make commitments on a roadmap to implement this. If they don’t use up the allocated capital, they need to report to the Government so that the capital is allocated to the ministries, branches and localities which have demand.

Experts estimate that if all the public investment capital is disbursed, the GDP growth rate would have 0.42 percentage point more. More importantly, public investment can serve as the ‘bait’ capital to promote other investment projects.

The whole economy and enterprises now put high hopes on public investment as a pillar that can help the economy recover from the pandemic. In such a situation, the tardiness in disbursement is unacceptable.

Linh Chi