The disbursement of public investment was estimated at VND398 trillion (US$17.24 billion) as of the end of December, meeting 82.8% of the Government’s plan – the highest rate in the 2016-20 period, according to the Ministry of Planning and Investment.

The disbursement of public investment was estimated at VND398 trillion as of
the end of December, meeting 82.8% of the Government’s plan, the highest
rate in the past five years. (Photo: dantri.com.vn)

Deputy Minister of Planning and Investment Tran Quoc Phuong said that the record level was attributed to the Government’s determination in speeding up the disbursement of public investment as a major driver for economic growth in the context of the COVID-19 pandemic.

In comparison, the disbursement rates were 80.3%, 73.3%, 68,87% and 67.46% in 2016, 2017, 2018 and 2019, respectively.

The disbursement of public investment sourced from the State budget was estimated at 91.1% of the 2020 plan, the highest rate in the past ten years.

Seventeen ministries, central-level agencies and 17 provinces and cities had disbursement rates of 80% or higher. However, 13 ministries and central-level agencies and five localities reported public investment disbursement rates of below 60%.

Still, the disbursement missed the Government’s target although public investment was identified to be the key driver for economic growth in the context of the COVID-19 pandemic.

The ministry pointed out that some major projects had very low disbursement rates.

For example, for the project of land clearance, compensation and resettlement for Long Thanh International Airport, the disbursement rate to date was only 27.69% of the plan.

The ministry said that the COVID-19 pandemic was also significantly affecting the progress of public investment disbursement as well as the implementation of public-funded projects.

According to Phuong, the Law on Public Investment No 39/2019/QH14 took effect from the beginning of this year to replace the Law on Public Investment No 49/204/QH13.

The new law regulated that ministries and localities must disburse all allocated public investment within the year and the sum which failed to be disbursed would be deducted from the planned medium-term public investment for that agency or localities, Phuong said, adding that with this regulation, the public investment plans of localities and ministries were expected to be more accurate and feasible.

With the new law, failure to disburse public investment would be a very big problem as the accountability would be enhanced, he said, adding that careful consideration must be given to developing public investment plans to improve efficiency of public investment.

Public investment mainly focused on developing key social-economic infrastructure systems which played an important role in attracting private and foreign investment into the economy and contributed to maintaining reasonable economic growth.

According to the General Statistics Office, every increase by one percent in public investment disbursement would push up GDP by 0.06 percentage points.