Vietnam has disbursed 47.3 trillion VND (2.25 billion USD) of capital raised via Government bond sales as of early December, completing 78 percent of the disbursement plan of the year, the State Treasury's statistics show.

The capital source was designed to finance several sectors, including transportation, urgent irrigation works, health care service projects, education and training in poor areas and flood regions, and other projects to be finalised in 2011 and 2012.

The ministries of finance, and planning and investment, and the National Assembly's Economic Committee saw the 47.3 trillion VND volume the highest figure ever achieved.

Disbursement had been targeted at 56 trillion VND (2.67 billion USD), of which 20.2 trillion VND (961.9 million USD) would be disbursed at the central level and another 35.8 trillion VND (1.7 billion USD) local and municipal bonds.

"In order to meet the year's target, about 11.2 trillion VND (533.3 million USD) worth of bonds would have to have been disbursed in the single month of December 2010, equal to about 20 percent of the target for the whole year. That wouldn't be easy to do," said National Assembly Finance and Budget Committee chairman Phung Quoc Hien.

Do Ngoc Quynh, general secretary of the Vietnam Bond Market Association, said: "Missing the target in Government bond fund disbursement is a serious problem for Vietnam . However, what the National Assembly is thinking about now is the quality and effectiveness of disbursement."

The National Assembly Finance and Budget Committee earlier this month reported that some provinces had disbursed Government bond proceeds to the wrong projects, the wrong sectors, or to unapproved projects.

The National Assembly Standing Committee and the Finance and Budget Committee refused the Government's proposal to add 40 projects to the Government-bond funded project list.

Hien's committee has found that initial capital plans for Government-bond funded projects during 2003-10 were just 246.5 trillion VND (11.7 billion USD), but the actual figure has soared 226 percent to nearly 558.7 trillion VND (26.6 billion USD) during the period.

"Total investment has increased too sharply against the State's capacity to balance the budget, badly affecting the nation's capacity to borrow and to service debt," said Hien.

In 2010, Vietnam raised about 70 trillion VND (3.3 billion USD) in Government bond sales, according to the Vietnam Bond Market Association.

To lower the nation's public debt burden, which rose to 57 per cent of gross domestic product this past year, the National Assembly has already approved a Government plan to raise only 45 trillion VND (2.14 billion USD) this year, with top priority for bond proceeds to be given to transportation and water resource projects.

The Standing Committee late last week also urged strong measures to eliminate ineffective projects and improve the effectiveness of public investment./.