Government to apply new public investment apparatus
The government for the first time is to employ a medium-term expenditure planning method for its public investment programme. Under the draft 2006-2010 public investment programme, compiled by the Ministry of Planning and Investment (MPI), priorities of medium-term public investment are defined in order to achieve the best efficiency.
Public investment include investments from the state coffers, state investment credit, state-owned enterprises and other sources such as bond issuances.
According to the draft programme, agriculture will receive 172.3 trillion dong (US$10.77 billion), industry 388.2 trillion dong, the construction sector 47.7 trillion dong, the transport sector 259.5 trillion dong, the post and telecom sector 22.6 trillion dong, the commerce and tourism sectors 12.9 trillion dong, public utilities and urban water supply 79.9 trillion dong, science and technology 22.4 trillion dong, natural resources and environment 12.6 trillion dong and education and training 86.9 trillion dong.
MPI experts calculated that the economic field will be earmarked 903.2 trillion dong in the 2006-2010 period, up nearly 80% against the 2001-2005 period.
The investment capital for the economic field will increase by around 13.5% annually. However, the proportion of capital for this field will shrink to 68.7% in the 2006-2010 period from 75.2% in 2001-2005 period.
The social field will take up 24.3% of the total public investment capital during 2006-2010. The tally for the 2001-2005 period was 20.1%.
According to the draft programme, public investment will occupy 49.7% of the society’s aggregated development investment in the 2006-2010 period, lower than the 50.5% of the 2001-2005 phase. By 2010, the proportion will possibly fall to 45.8%.
This means that the proportion of public investment will be lower, while that of the non-state sources will increase. MPI’s projection shows that the investment capital from the public and private sector in 2010 will at least double the amount in 2005.
The intention behind such a structure of investment capital is to maximise financial resources from the public and non-state economic sectors for production expansion, infrastructure development and social improvements.
The private sector is expected to account for 33.6% of the society’s total development investment in 2006 and 35.6% in 2010.
Foreign direct investment (FDI) sources are projected to bring US$70 billion to Vietnam in five years, of which US$30.2 billion will be disbursed.
The private sectors will be given wider investment channels to fund public services and utilities like health, education, culture, sports and transport. This means the state would be able to spend more on poverty reduction and development of remote areas.
Category: Legal
