Public investment restructuring is still sluggish and has not focused on measures improving investment effectiveness, many experts pointed out at a seminar in Hanoi on November 24.
|A section of Noi Bai - Lao Cai Highway (Photo: VNA)|
The restructuring has just tightened disciplines in public investment while ignoring measures to promote investment effectiveness and eliminate wastefulness, said Nguyen Tu Anh – Director of the Research Department on Macro-economic Policies under the Central Institute for Economic Management.
He elaborated that the Bidding Law and the Decree on public-private partnership have formed a crucial legal framework for the application of market principles in public investment capital allocation. However, they haven’t been enforced in reality due to a lack of implementation instructions.
United criteria for the allocation, supervision and assessment of public investment among ministries, sectors and localities, are yet to be developed, he noted.
He also pointed to lax disciplines for public investment, noting that violations have continually been reported in different localities despite stringent regulations and the Prime Minister’s directions.
Meanwhile, economist Vu Dinh Anh blamed the restructuring’s disappointing outcomes on the unchanged role of the State in the economy. Aligning the State’s role with the market economy is critical for public investment restructuring, and vice versa.
He suggested that public investment should be reduced to account for only 10 percent of gross domestic product, which would be in accord with the actual economic conditions, State budget deficit and public debt.
The restructuring needs to be conducted according to sectors and public investment must be made in sectors and fields that private investors do not want or are unable to pour money into.
The State should prioritise public investment in public infrastructure and services and minimise its presence in spheres that directly make money, Anh said, stressing that the restructuring must be associated with administrative reforms and the promotion of private engagement in public services like education-training, health care, science-technology, culture and sports.
The expert emphasised that ineffective public investment will lead to macro-economic instability and undermine economic productivity, effectiveness and competitiveness.
Restructuring and improving the effectiveness of the State’s investment must be the top priority in the economic restructuring and growth model change towards the economy’s stronger competitiveness, he added.
Public investment restructuring is part of the economic restructuring scheme stated in the National Assembly’s Resolution No.10/2011/QH13 on the socio-economic development plan from 2011-2015. State-owned enterprise and the banking system are also being restructured.