Public investment is an important wheel of the "three-horse carriage" that drives economic growth, especially in the context of the increasingly complicated COVID-19 pandemic. However, actual results are below expectations.

Slow disbursement, adverse economic impact

According to the latest report from the Ministry of Finance, the disbursement rate of public investment funds planned for 2021 in the first seven months of 2021 reached 36.71% of the full-year plan assigned by the Prime Minister. This progress was 40.67% lower than the same period in 2020. While 11 ministries and 20 localities reported a high disbursement rate, for example Thai Binh (71.04%), Vietnam Bank for Social Policies (67.27%), Hung Yen (65.64%) and Ha Nam (64.36%), the rest had low disbursement rates, with 34 out of 50 central agencies and 15 out of 63 localities fulfilling below 25%.

Some key national projects had slow disbursement progress, including the land acquisition, compensation, support and resettlement project for Long Thanh International Airport; some traffic sections on Eastern North - South Expressway or three projects converted under Resolution 117/2020/QH14 (Mai Son - National Highway 45 section; Vinh Hao - Phan Thiet section and Phan Thiet - Dau Giay section).

According to experts, while the economy is heavily affected by the COVID-19 pandemic, public investment is considered one of the most expected economic growth drivers for the time being. This spearhead is effective, not only creating jobs and income for businesses, industries, localities and workers, but also improving economic infrastructure and promoting growth. Therefore, the slow disbursement will cause many consequences, with the biggest impact on economic growth.

In addition, public investment is often the source of large projects and important infrastructure. As a result, slow public investment disbursement will give rise to delayed funding of reciprocal capital for private and foreign investors, thus affecting social capital mobilization, harming the national reputation and weakening confidence of investors and donors. 

Urgent and decisive

According to the General Statistics Office (GSO), in 2021 - 2025, if the public investment disbursement increases by 1% each year from the preceding year, GDP will expand by 0.058%. Besides, its direct impact and ripple effect are stronger than the previous period when spending VND1 for public investment will lead to VND1.61 of non-state investment (including the private sector and the FDI sector), higher than the previous value of VND1.42.

Currently, central agencies are making moves to boost public investment. Recently issued Resolution 63/NQ-CP also clearly focused on solutions to difficulties in institutions and policies, aiming to bring the public disbursement rate to 95 - 100% of the assigned plan in 2021. By the end of the third quarter of 2021, disbursement will reach at least 60% of the plan.

Minister of Planning and Investment Nguyen Chi Dung recently asked central and local agencies to focus on implementing solutions to speed up site clearance, removing difficulties and obstacles relating to land and resources, urging and speeding up construction progress, carrying out acceptance tests, and making payment records as soon as the volume is available.

The Ministry of Transport issued an "ultimatum" which urgently requests concerned parties to complete and submit documents to competent agencies for approval by December 2021. Besides, investors must ensure disbursement of at least 90% of the plan until the end of the year. The Ministry of Construction issued Directive 01/CT-BXD on accelerating implementation and disbursement of public investment plans in 2021 with the goal of completing 100% of the budget plan.

Notably, the first session of the 15th National Assembly, July 28, passed a resolution on medium-term public investment plans for 2021 - 2025. The resolution clearly outlined focused investment to quickly complete and operate projects, promote practical efficiency, investment in national target programs, important national projects and key influential projects. This is one motivation for ministries, branches and localities to quickly overcome difficulties and obstacles in order to complete the disbursement plan this year and beyond.