Public investment – an important driver of Vietnam’s economic growth in the first 6 months of 2023

In the context that Vietnam’s economy is still facing many difficulties and challenges from both inside and outside, the situation of domestic production and business tends to slow down due to the negative impact of inflation factors in the world. The increase in the world market, geopolitical conflicts, tightening monetary policy has stronger impact on businesses, trade and investment of countries, export market declines, domestic lending interest rates are decreasing but still Vietnam’s economy in the second quarter of 2023 was estimated to increase by 4.14%, higher than the increase of 3.28% in the first quarter of 2023, showing many policies and solutions approved by the Government and Prime Minister. The Government’s drastic direction from the beginning of the year has initially brought into play its effectiveness, in which the determination of ministries, branches and localities to focus on promoting the implementation of public investment capital from the first months of the year, especially in the second quarter of 2023. This is a bright spot and an important driving force for economic growth in the second quarter and first six months of 2023.

In the investment capital of the State sector, capital realized from the State budget (public investment) implemented in the second quarter of 2023 was estimated at over VND 140.4 trillion, equaling 19.9% ​​of the year plan, up 52.8% compared to the first quarter and up 21.8% over the same period last year (the first quarter of 2023 reached 13% of the year plan). Generally, in the first 6 months of 2023, capital from the State budget is estimated at over 232.2 trillion VND, equaling 33.0% of the year plan and increasing by 20.5% in the same period last year (same period in 2022 by 32.1% and increasing by 10.4%). According to the management level, the central capital reached 43.4 trillion dong, equaling 32.6% of the year plan and up 29.1% over the same period last year; local capital reached 188.9 trillion dong, equaling 33.1% and increasing by 18.6%. In the locally managed capital, the provincial state budget capital reached 130.1 trillion dong, equaling 31.5% and increasing by 23.8%; State budget capital at district level reached 51.1 trillion VND, equaling 36.7% and increasing by 9.8%; State budget capital at commune level reached VND 7.7 trillion, equaling 40.7% and increasing by 1.4%.

The volume of public investment in the first 6 months of 2023, reaching over 232.2 trillion VND, is very large, clearly showing the drastic direction of the Government, the Prime Minister, the determination of ministries, branches and localities to accelerate the implementation of projects/works right from the first months of the year, especially from the second quarter of 2023 in order to increase the demand of the economy, spread to other economic sectors, create dynamic important force to boost economic growth in the second quarter and first six months of 2023, creating clear positive momentum for the next quarters in 2023.

This positive result is due to the contribution of the following factors:

Firstly, 2023 is the year with a huge public investment capital plan, including the capital of the Socio-Economic Development and Recovery Program. Many projects in the Socio-Economic Recovery and Development Program have basically completed the procedures, up to this point, they will focus on implementation. Many other projects in the 2021-2025 medium-term public investment plan have completed procedures and processes, creating favorable conditions to accelerate the implementation of public investment this year.

Secondly, the Prime Minister has drastically directed ministries, branches and localities to accelerate the project implementation from the first months of the year. On March 14th, 2023, the Prime Minister signed Decision No. 235/QD-TTg to establish 5 working groups to inspect, urge and remove difficulties and obstacles, accelerate the implementation and disbursement of capital sources. Public investment in ministries, branches and localities, working groups have drastically examined, urged and found solutions to immediately remove difficulties and obstacles in order to speed up the implementation and disbursement of public investment capital. . On March 23rd, 2023, the Prime Minister issued Directive No. 08/CT-TTg on key tasks and solutions to accelerate the allocation and disbursement of public investment capital and three national target programs for 2023, implement the program of socio-economic recovery and development.

Thirdly, ministries, sectors and localities have actively and actively focused on deploying the public investment capital plan in 2023 in a timely manner, meeting the requirements of projects that can be implemented and disbursed right from the start of the first month of the year, especially the transition projects, the projects are expected to be completed this year.

Fourthly, many ministries, branches and localities have assigned each specific task to each Department, department, branch, investor, and project management board to be responsible for the committed schedule, since then, it has accelerated the implementation and disbursement of public investment early and from afar.

Fifthly, a number of heads of ministries, branches, chairpersons of People’s Committees at local levels have actively focused on directing and handling problems and inadequacies in the implementation of public investment projects; promptly handle problems related to site clearance, especially key projects, important national projects.

Sixthly, many investors and project management boards have consciously focused on immediately implementing projects/works assigned the capital plan in 2023, especially transitional projects, projects expected to be completed in 2023.

In the context of the world’s complicated and unpredictable changes, promoting the role of growth engine of public investment in order to make positive contributions to economic growth is an important political task, therefore, it is necessary to focus on the following basic solutions:

(1) The State needs to focus on perfecting the legal system governing all public investment project activities from investment preparation, project implementation, completion, final settlement, handover and operation, in areas including land, environmental protection, bidding, construction, natural resources and minerals, … because a slow stage will affect the whole project, affect investment efficiency, reduce growth driver.

(2) Ministries, branches and localities need to closely follow and drastically implement effectively the Government’s Resolutions and the Prime Minister’s directing documents on accelerating the allocation, implementation and disbursement of public investment capital, 03 national target programs in 2023, implementation of the program of socio-economic recovery and development.

(3) Leaders of ministries, branches and provincial People’s Committees are directly in charge of each specific project group to check, urge and promptly remove obstacles, speed up the implementation and disbursement of public investment capital.

(4) Ministries, sectors and chairmen of People’s Committees of provinces/cities should closely monitor and properly assess the situation, focusing on improving the quality of investment and project preparation; Be proactive and flexible in removing difficulties and obstacles when implementing the project, well prepare the clean ground for construction. If it is beyond the competence, it is necessary to summarize and immediately report it to the competent authorities for consideration and early settlement.

(5) Accelerate disbursement in parallel with ensuring the quality of works and effective use of public investment capital. Immediately and proactively review and evaluate the implementation and disbursement ability of each project to have a plan to adjust the capital plan from slow disbursement projects to good disbursed projects that lack internal capital. of ministries, sectors and localities according to regulations, to ensure the implementation and disbursement of all allocated capital.

(6) Strengthen discipline, administrative discipline, promote decentralization and decentralization, promote responsibility, set an example of the leader. There are strict sanctions in accordance with the law for investors, project management boards, organizations and individuals who intentionally create difficulties, obstruct or delay the progress of capital allocation, implementation and disbursement of public investment capital.

(7) Strengthen coordination between ministries, central agencies, localities and units, ensuring efficiency, preventing problems from lingering unresolved, causing congestion and wasting capital resources.

(8) Ministries, sectors and localities drastically direct investors to focus on immediately implementing the projects that have been assigned capital plans, speeding up the implementation and disbursement of investment capital for transitional projects and works. Focus on speeding up progress, completing important and urgent projects that are in progress; construction projects are likely to be completed in 2023.

(9) To harmonize capital between the Socio-Economic Recovery Program and the 5-year medium-term public investment plan 2021-2025, ensuring that the implementation of the entire capital of the Socio-Economic Development Restoration Program in 2023 according to the Government’s Resolution No. 10/NQ-CP dated February 3, 2023.

(10) The People’s Committees of provinces/cities directly under the Central Government need to implement measures to control the price and quality of construction materials for public investment projects. Updating, adjusting and announcing the monthly price of construction materials to ensure compliance with the Construction Law is the basis for adjusting the bidding package, the total investment of the project, and ensuring the legitimate interests of the investor, construction contractor.

(11) Promote reform of administrative procedures, application of information technology in handling public investment procedures./.