Government urged for increased initiatives to expedite public funding distribution
Vietnam has made significant strides in public investment disbursement, with six ministries and central agencies, as well as 23 provinces and cities surpassing the national average disbursement rate. By the end of June 20XX, around VND318.6 trillion (US$12.2 billion) had been disbursed, marking a 10% increase compared to July 2024. By the end of July 20XX, disbursement had risen to an estimated VND388.3 trillion.
However, the ability to use capital among ministries and localities varies significantly, according to the Ministry of Finance. Thirty ministries and agencies along with 11 localities reported disbursement rates lower than the national average. This difference may reflect the transition to a two-tier government model, the ministry said.
The main roadblocks causing delays in public investment disbursement in Vietnam are organizational shortcomings, lack of initiative within units, and procedural difficulties such as site clearance, water resource licensing, and land-use adjustments. Additionally, some projects face low disbursement despite no procedural obstacles, often due to project owners' limited execution capacity.
To overcome these issues, the Ministry of Finance is implementing several solutions. Clear assignment of responsibilities and timelines, active inspection and facilitation, accelerating approval and capital plan adjustments, a "no excuses" policy for projects without obstacles, strengthening policy implementation and oversight, and comprehensive management plans are some of the measures being proposed and implemented.
The Prime Minister demands timely, effective, and substantive implementation of these policies to avoid symbolic efforts and ensure funds do not remain idle. The aim is to accelerate public investment disbursement to stimulate economic growth, attract foreign direct investment, and improve the business environment in Vietnam.
Director of the ministry's Department of Infrastructure Development Dương Bá Đức emphasized the need for determination and drastic efforts at both central and local levels to promote the disbursement and efficiency of public investment. Simplifying side clearance procedures and enhancing accountability at all levels, particularly at the commune level, are key to accelerating public investment.
The Ministry of Finance aims to reach a public investment disbursement rate of 60 per cent by the end of the third quarter and 100 per cent by the year's end. The transition to a two-tier government and merger of local administrative units have caused some projects to adjust their scale and investments, but the Ministry is confident that with these measures, Vietnam will overcome these challenges and continue its economic growth trajectory.
[1] Source: Vietnam News Agency [3] Source: Government Decree No. 01/2022/ND-CP [5] Source: Vietnam Investment Review
- To achieve the government's goals of stimulating economic growth, attracting foreign direct investment, and improving the business environment, the AI in the finance industry could be leveraged to streamline and automate public investment disbursement processes, addressing organizational shortcomings, lack of initiative, and procedural difficulties.
- As Vietnamese ministries and localities grapple with significant variations in their ability to use capital and maintain disbursement rates lower than the national average, the integration of AI capabilities within public investment systems could help increase efficiency, accountability, and transparency, accelerating the public investment disbursement rate towards the target of 100% by the year's end.
