Economist warns of vast corruption in Vietnam public spending

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 A road under construction in the central highlands / PHOTO COURTESY OF TUOI TRE

While Vietnam's government is seeking to raise the budget deficit cap to have money for public spending, an economist pointed out common failings in public project investment, warning of "extensive corruption."

Dr. Dinh Trong Thang, chief of the Investment Policy Department under the Central Institute for Economic Management, was speaking at a meeting that the institute organized early this week, Tuoi Tre reported.

Referring to massive ineffective investments as "white elephants," Thang said poor assessment, excessively increased investment costs, and poor maintenance as well as operational protocol are several causes of the stockpile of futile projects in Vietnam.

Since public projects in Vietnam are usually approved in principle before being assessed, at some localities they are assessed mainly in terms of their legal procedures or whether they meet regulated standards, he said.

Assessment agencies play an important role in public projects but their capacity is usually limited, and they sometimes lack the authority to get rid of an ineffective project, according to Thang.

Meanwhile, he described the supervisory role of People's Councils and other people's organizations as "dim." He also said periodical assessments of a project.were ineffective.

Dr. Dinh Duc Sinh, an independent consultant, also said at the meeting that investment in public works is regulated by 10 different laws -- including auction, investment, land, and construction laws -- but a comprehensive law on public investment was still unavailable.

Sinh also said that many national ministries made major local investments in their favorite localities while other places didn't have a single project.

Such lopsided investments have made some provincial roads larger and better than national ones, he said.

"The distribution of state budget among public projects is unfair and unjustifiable," Sinh said.


Last month the government urged the National Assembly to increase the budget deficit ceiling from 4.8 percent of gross domestic product this year to 5.3 percent next year, saying it needs money for public spending.

The government earned some VND543.8 trillion (US$25.74 billion) over the first nine months, or 66.6 percent of the target, and may fail to meet the target this year, the Ministry of Finance reported last week.

Government spending was estimated to be VND684.5 trillion ($32.4 billion) as of September, or 70 percent of the target and up 7.4 percent year on year, the ministry said.

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