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REVIEW of FINANCE - Issue 1, 2023
still slow, the cost of law compliance is still high; many The State capital reached VND 729 trillion, accounting
administrative procedures are cumbersome; and many for 33.7% of total capital and increased by 14.5% over
unnecessary sub-licenses are required. the previous year; non-state sector reached VND
- Investment from the state budget is still spread; 972.2 trillion, equaling 44.9% and increasing by 3.1%;
The efficiency of investment in some infrastructure the foreign direct investment sector reached VND
projects is not high. Compared to other countries that 463.3 trillion, equaling 21.4% and decreasing by 1.3%.
have experienced similar development stages with Viet Realized social investment capital in 2020 increased
Nam, the investment coefficient of Viet Nam is still at a by 5.7% compared to 2019, this is the lowest increase
high threshold. This fact shows that Viet Nam's growth in the whole period of 2011-2020 due to the negative
model is mainly based on investment capital, investment impact of the COVID-19 pandemic on all activities.
efficiency is still low. According to the World Economic manufacturing business. However, the growth rate of
Forum, Viet Nam currently ranks 79 out of 137 countries capital realized from the state budget in 2020 reached
th
in the world in terms of overall infrastructure quality. 14.50%, the highest rate in the 2011-2020 period. The
Only 20% of Viet Nam's roads are paved, much lower result was achieved by accelerating the disbursement
than in other countries such as Malaysia, India and of public investment capital to maintain economic
Indonesia. Up to now, the expressway system has only growth in the context of complicated developments
been initially formed; The railway system is outdated, of the COVID-19 epidemic.
has not yet invested in high-speed railway, the urban Public investment activities still have limitations mainly
railway system has just invested in building the first lines; due to the following objective and subjective reasons:
The seaport system has not been fully exploited to its - Objective causes: It is due to the impact of political
designed capacity; Some airports have been overloaded... fluctuations the world economy, and the decline in the
Therefore, Viet Nam does not have a synchronous and domestic economy; aggregate demand is weak, leading
modern transport infrastructure system, especially to difficulties in mobilizing investment capital from
compared with international criteria (road network) other economic sectors for the development of the socio-
highways, high-speed railways, airports, and major economic infrastructure system; The shortcomings and
seaports). Compared to the ASEAN region, Viet Nam's inadequacies of public investment in the previous period
infrastructure quality is lower than the ASEAN average could not be completely resolved in the short term; The
in all segments. old, backlogged projects and programs still need to
- The structure of investment from the State sector is continue to be processed and arranged...
still limited. The State investment now also focuses on - Subjective causes: Legal institutions on public
sectors in which the private sector is able and willing investment are not really synchronous and unified;
to participate. The investment capital is still spread, the have not completely overcome the overlap between
progress of the project is delayed, and there are even provisions in legal documents related to public
projects that are decades behind schedule, increasing investments; still confused in the implementation
investment costs . The regional structure in investment is of the Law on Public Investment and its guiding
also not reasonable, the quality of development planning documents.The understanding and implementation
is not effective... approach of ministries, branches and localities are
According to the General Statistics Office, in 2020, still different, leading to a long delay in completing
realized social investment capital at current prices is procedures for public investment projects; The
estimated at VND 2,159.51 trillion, up 5.7% over the quality of the planning is still low, the predictability
previous year and equal to 34.4% of GDP, including: is still limited, there is a lack of connectivity and
synchronization, causing waste and inefficient
FIGURE 3: VIET NAM'S GDP GROWTH RATE IN THE PERIOD investment for some infrastructure projects. The
2017 - 2021 (%) ground clearance work encountered many obstacles,
wasted time, thus slowing down the progress of most
projects. Many projects had to adjust to increase the
total investment due to the high cost of site clearance,
making it difficult to balance capital and complete the
project on schedule. The observance of the principles
and criteria for allocation of planned capital in some
ministries, branches and localities is not strict, leading
to the need to supplement and amend the capital
allocation plan many times, affecting the progress of
investment plan. Inspection, control and inspection
have not been paid due attention...
Source: General Statistics Office (2017 - 2021)

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