A number of shortcomings in restructuring Vietnam’s public investment are hampering progress, participants in a workshop organised by the Central Institute for Economic Management said in Hanoi on November 7.
Prof. Dr Nguyen Quang Thai said the restructuring of public investment in Vietnam was falling short of expectations since there were no master plans for this endeavour.
Relevant policies were only revised on a short-term basis, and a complete legal framework is lacking.
For many years, Vietnam’s socio-economic development and investment plans were solely geared towards achieving rapid growth rates.With investments accounting for 40 percent of gross domestic product (GDP), the country only attained an annual maximum growth rate of 7 percent, Thai added.
Public investment has a greater impact on GDP growth than private and foreign direct investments, MA Pho Thi Kim Chi from the National Centre for Socio-economic Information and Forecasts under the Ministry of Planning and Investment said. She noted, however, that public investment only has short-term effects on Vietnam’s GDP growth.
In addition, the ratio of public investment in the national economy reduced from 8.5 percent of GDP in the 2006-2010 period to 6 percent in 2011-2013, according to Chi. The ratio of public investment in total social investment also decreased from 53.4 percent during 2006-2010 to around 40 percent in the 2011-2013 period.
During the workshop, the majority of participants agreed that it was necessary to associate the restructuring of public investment with restructuring the entire economy, and adapt investment policies to each sector and region.
They also highlighted the importance of private and FDI investments for upgrading infrastructure and the role of institutional reform in promoting the economy’s competitiveness.
Reorganising public investment is part of the economic restructuring process stipulated in the National Assembly’s Resolution No.10/2011/QH13 on the socio-economic development plan from 2011 to 2015. State-owned enterprises and the banking system are also being restructured.-VNA
Prof. Dr Nguyen Quang Thai said the restructuring of public investment in Vietnam was falling short of expectations since there were no master plans for this endeavour.
Relevant policies were only revised on a short-term basis, and a complete legal framework is lacking.
For many years, Vietnam’s socio-economic development and investment plans were solely geared towards achieving rapid growth rates.With investments accounting for 40 percent of gross domestic product (GDP), the country only attained an annual maximum growth rate of 7 percent, Thai added.
Public investment has a greater impact on GDP growth than private and foreign direct investments, MA Pho Thi Kim Chi from the National Centre for Socio-economic Information and Forecasts under the Ministry of Planning and Investment said. She noted, however, that public investment only has short-term effects on Vietnam’s GDP growth.
In addition, the ratio of public investment in the national economy reduced from 8.5 percent of GDP in the 2006-2010 period to 6 percent in 2011-2013, according to Chi. The ratio of public investment in total social investment also decreased from 53.4 percent during 2006-2010 to around 40 percent in the 2011-2013 period.
During the workshop, the majority of participants agreed that it was necessary to associate the restructuring of public investment with restructuring the entire economy, and adapt investment policies to each sector and region.
They also highlighted the importance of private and FDI investments for upgrading infrastructure and the role of institutional reform in promoting the economy’s competitiveness.
Reorganising public investment is part of the economic restructuring process stipulated in the National Assembly’s Resolution No.10/2011/QH13 on the socio-economic development plan from 2011 to 2015. State-owned enterprises and the banking system are also being restructured.-VNA
