“Vietnam -- an economy with a US$130-billion GPD, is currently home to as many as 100 seaports, 18 coastal and 30 border gate economic zones, and more than 650 industrial clusters,” said VIE Chairman Tran Dinh Thien, citing reports conducted by state bodies.
“It’s wasteful and haphazard, no matter what standards the establishments of these facilities are based on.”
Thien went on to elaborate on the wasteful public investment by saying that over the ten-year period between 2001 and 2010, the country has seen 233 new universities and colleges open.
“This means we have built two universities every month.”
Sharing Thien’s view is Doctor Le Dang Doanh, former head of the Central Institute of Economic Management, who reiterated the reality that every locality wants to have a TV station, airport, university, and everything else that major cities have.
“Vietnam is building and expanding 22 airports, including 8 international ones, and 22 international seaports,” said Doanh.
“Moreover, except for Gia Lai Province, which has no university, each province has on average six universities and colleges,” he added.
Regarding investment effectiveness, Doanh said the state economic sector needs to spend 7.8 dong to earn 1 dong in profit.
“Paradoxically, despite the poor effectiveness, the public sector still enjoys high preferential treatment.
“From 2000 to 2009, the government’s investment in the economic sector accounted for 73 percent of the total figure, while investment in the social sector and human development dropped from 17.6 percent in 2000 to 15.2 percent in 2009.
“Public investment should prioritize the public,” he concluded.
“The state should only invest in fields in which private sector is not operating.”
Law on public investment urged
Doctor Vo Dai Luoc, from the Institute of World Economics and Politics, said Vietnam is allocating too broad an authorization for localities, which are allowed to develop plans and approve investment projects.
“Consequently, it seems like Vietnam has 63 different economies from its 63 cities and provinces,” said Luoc.
“This has resulted in wasteful, haphazard, and above all else, ineffective investment.”
He urged Vietnam to develop a law on public investment, as per international customs.
“We should consult the law on investment of Singapore and South Korea,” he suggested.
Meanwhile, Doctor Vu Dinh Anh said the country has borrowed both domestic and foreign loans for public investment, and its public debt has thus gradually increased.
“Around 12 – 15 percent of the total state budget disbursement is required to clear debts,” he said.
For his part, Vu Tuan Anh from VIE suggested that the government practice thrift in public spending to balance the state budget.
“Annual public spending and investment planning and projects should be made public,” he said.
According to figures from the Ministry of Finance, as of the end of last year, the country’s public debt stood at 54.6 percent GDP, or $50 billion.
The figure is expected to rise to 58.4 percent this year, and 65 percent at the end of 2015.
Meanwhile, the International Monetary Fund forecasted that Vietnam’s public debt will be around $86.2 billion in 2015.