On July 25, and the Government’s task force team held a meeting on reviewing implementation of solutions to speed capital disbursement. In the meeting, the Minister Dung announced 13 ministries, provinces and units having the disbursement rate below 20 per cent as of June 15, 2017.
These includes three Ministries of Planning and Investment, Foreign Affairs and Health, four units: Committee for Ethnic Minorities, State Bank of Vietnam, Vietnam News Agency, Veterans Association of Vietnam and six provinces and cities: Hanoi, Da Nang, Ho Chi Minh, Binh Duong, Tay Ninh and Binh Phuoc.
Delayed capital disbursement firstly resulted from these leaders’ unspecific and drastic instruction. "In addition, procedural issues, contractor’s capability and obstacles in land clearance are also causes," the Minister said.
The PM asked the ministries and localities, including 13 ministries and provinces to implement the most effective solutions to speed up capital disbursement.
If the contractors and supervisors are not qualified, they will be replaced by the qualified ones. In case of obstacles in land clearance, Ministers or provincial chairmen must directly instruct the work of land clearance.
"The spirit is to find the most effective solutions so that capital disbursement can be drastically carried out in this August and September. What investment capital, which is available, has not been disbursed due to instruction is unacceptable," Dung said.
"If the units have not completed their capital disbursement by October, 2017, the PM will transfer the capital. This year, the Government will consider carefully the capital transfer to units, which delayed capital disbursement last year”, the Minister noted.
Based on the task force team’s assessment, the delayed disbursement of public investment capital can constrain the economic growth. Furthermore, it makes the government pay more interests for its borrowings.
“By the end of 2017, public debt will rise to 65 per cent of GDP, reaching the ceiling of 65 per cent set by the National Assembly. When public debt hits the ceiling, the Government will have to take domestic borrowings into account. In order to borrow for offsetting budget deficits, macro management tools such as tools of interest rate and exchange rates ... will be utilized. This will affect inflation and the economy as a whole,” the task force team highlighted.
