VietNamNet Bridge – By the end of March 2011, 22 ministries and branches still had not sent the reports on cutting public investments and transferring investment capital as requested.

According to the Ministry of Planning and Investment, by March 28, 2011, ministries and local authorities had decided to delay or cancel 1387 projects capitalized at 3400 billion dong. This means that the investment projects that need to be completed urgently will have 3400 billion dong more to speed up the implementation.

Cutting down public investment projects is an important measure stipulated in Resolution No 11 to reduce the money supply, a part of the plan to fight against high inflation

It is clear that 3400 billion dong is a small figure if comparing with the total investment capital sourced from the state budget and government bonds in 2011. It is also much lower than the 35 trillion dong worth of investment capital which was cut in 2008. However, according to Bui Ha, a senior official of the Ministry of Planning and Investment (MPI), 3400 billion dong is just the preliminary figure quoted from the reports of 30 ministries and branches, 63 provinces and cities, and 12 state-owned economic groups and general corporations.

“22 ministries and branches still have not sent reports on cutting public investments, including the Ministry of Transport, Ministry of National Defense, the Ministry of Public Security and the Ministry of Construction, the big capital users,” Ha said, adding that the reports need to be sent to MPI, so that the ministry can send a general report to the Prime Minister prior to April 11, 2011.

Observers have noted that ministries and branches have not been really positive in cutting down public investments. That explains why the number of projects suggested for cutting is not high and the investment capital of the projects is not big. In Mekong Delta, for example, local authorities still want to continue the projects on building head offices, centers or public service houses initially slated for 2011. Especially, Vinh Long province only wants to cut one project which has the investment capital of two billion dong. Local authorities all say that other projects are “very important and urgent projects which bear specific characteristics of the localities”.

State-owned economic groups and general corporations also do not want to cut many projects. Especially, Nguyen Dinh Cung, Deputy Head of the Central Institute for Economic Management (CIEM) which once sent a group of experts to check the projects to be invested by the groups, related that the experts all believe the projects cannot be cut.  A reason has been cited that the economic groups and general corporations plan to invest with bank loans, while this kind of capital is not subject to the cutting of public spending.

However, Cung believes that the projects still need to be cut. “In the context of the high inflation, if there is no strict control, capital will go to ineffective projects, which will lead to macroeconomic uncertainties,” Cung said.

MPI hopes that 50 trillion dong worth of investment capital for public projects will be cut down this year.

Tuyet Ngan