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The private sector plays an important role in upgrading infrastructure along with other non-state sectors. However, Minister Vinh says, it’s no easy task to attract investment from private businesses as they are still every much in their infancy, while state-owned enterprises (SOEs) continue holding sway over the national economy. In other words, Vietnam remains dependent on SOEs to develop infrastructure.
In recent times, the Government of Vietnam has encouraged non-state sectors to give a helping hand in the form of private-public partnership (PPP).
Vietnam has just entered the group of middle-income nations, but is still confronted with numerous difficulties. Although the private sector is increasingly involved in the socialization process, sometimes it cannot meet infant requirements as expected.
The Planning and Investment Minister argues that only a breakthrough in the development of private businesses would lead to a substantial increase in the amount of investment capital.
He reveals that from 2001 to 2005, the private sector contributed 32.6 percent,and the state sector 53.4 percent, to Vietnam’s total investments tissue. In the 2011-2015 period, private investment is expected to hit 45-46 percent, while the SOEs’ contributions will fall to 37-39 percent.
As an advisor to the Government in regulating public investment, Minister Vinh says the implementation of PPPs is not always a smooth process although this model has been applied by almost all agencies under the Ministry of Planning and Investment.
The Government has a Deputy Prime Minister in charge of building a policy framework on PPPs to create a closer link between ministries and agencies, with a view to ensuring transparency and efficiency in public investment, Vinh notes.
He stresses the need to incentive policies and a uniform mechanism for private businesses to engage in infrastructure development projects when need be. In addition, a better business climate should be created to support them and consolidate their trust in the Government’s policies.
Some opportunities have been opened up for private businesses to invest in certain projects as the state is responsible for funding important projects relating to social welfare, security, and national defence.
However, Minister Vinh also voices his concern over transparency-related issues, saying that private enterprises are reluctant to pour money into a non-transparent investment environment. Therefore, it is necessary to provide them with updated information regarding regulations on the specific responsibilities of both the State and private enterprises in an open and transparent manner.