Vietnam Govt Urged to Cut Public Investment
The Vietnamese government should cut its public investment to 3.5% of the country’s gross domestic product (GDP) this year, the Ministry of Planning and Investment (MPI) said.
The state budget spending should not exceed levels accepted by the National Assembly and the government should not invest in trade promotion and other services which private sectors can do more efficiently, the ministry added.
These are part of 13 solutions mooted by the ministry to increase efficiency of public investment.
Economic efficiency is most important basis for investment by the government. Vietnam also needs to review the investment in infrastructure to adjust in each sector.
The strategy should be for the government to slowly reduce its investment (almost 10% of GDP) while strongly encouraging other sectors to do so.
Ratio of state contributions to social investment has been the highest, but this has been marked by low economic efficiency. Management weaknesses and corruption have had serious impacts on the economy and should be addressed firmly.
Large-scale investments from the state budget along with an open fiscal policy have contributed to high inflation and unstable macroscopic economy in the country.
The low economic efficiency of these investments has meant that long-standing problems have not been solved; therefore, it was difficult to attract capital from different economic sectors. (VNS)
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