VietNamNet Bridge - The administration center and monument projects developed in cities and provinces are compared to ‘dishes of lobsters’ at the poor’s parties: they are too luxurious and cause a big waste.

 

Huynh The Du, director of the Fulbright Economics Teaching Program (FETP), noted that the most serious problem for Vietnam now is the ‘lobster budget mechanism’, i.e local authorities rush to implement large-scale construction projects with the state and local budgets while they do not care if the projects are really necessary.

Du cited a series of ‘lobster projects’ – the VND400 billion Vietnamese Hero Mothers Monument in Quang Nam province and the VND1.4 trillion complex of monuments & square in Son La, the province with the annual local budget revenue of VND3 trillion.

He also mentioned the museum project in Hanoi with huge investment capital of over VND10 trillion. While the museum still has been left idle, another project is being drawn up with the estimates of VND11 trillion. Meanwhile, in other localities, administrative centers worth trillions of dong are being planned.

“Monuments and administration centers have been built. What will come next?” said Vu Dinh Anh, a renowned economist asked, referring to the public investment management mechanism in Vietnam.

According to Anh, the public investment once accounted for 20 percent of Vietnam’s GDP. The figure now is 10 percent. 

“This is simply because we have no money more to make investment,” Anh said. 

The expert went on to say that 45 percent of total capital for public investment is from the state budget, emphasizing that if the situation cannot be improved, the state budget will still bear hard pressure.

In 2011, the Prime Minister released the Instruction No 1792 on tightening the public investment and cutting unnecessary projects. However, a series of administrative center projects capitalized at over VND10 trillion for each still have been planned.

Local authorities, when insisting on building administration centers, said that the centers will allow savings on travel time, because people will only have to go to one place to get public services. 

However, Du believes that the reason is unconvincing. The travel time to be saved is nothing if compared with the big resources wasted and the huge value of the construction works which can be used for dozens of years more.

He emphasized that people not not have to spend too much time on travel time, but on complicated procedures and unreasonable policies.

An analyst pointed out that the big waste in the capital use will put the state budget under pressure. If noting that the capital cost is 12 percent per annum, Vietnam would have to pay VND120 billion a year for every VND1 trillion worth of capital it uses today.

Pham Huyen