As of September 2, the disbursement of the relief package for economic recovery and development had totaled a mere VND55.5 trillion (US$2.36 billion), Minister of Planning and Investment Nguyen Chi Dung told a monthly Cabinet meeting on September 6.

The disbursement rate for public investment capital in HCM City had reached only 26 percent as of the end of July. About 100 projects had a disbursement rate of zero.

The initial six months of the year saw public investment disbursement only met 27.86% of the annual plan, a figure even lower than the 29.02% recorded in the same period last year, according to the Ministry of Planning and Investment (MPI).

The disbursement of public investment projects in H1 reached VND192, 200 billion (US$8.2 billion), up 10.1 percent compared to the same period last year. However, this rate is not as expected, Minister of Planning and Investment Nguyen Chi Dung said.

Some officials tasked to allocate public investment capital give themselves the right to "grant favors" to agencies and businesses.

The total public investment capital has increased sharply in the 2021-2025 period compared with 2016-2020, but the number of projects has fallen significantly.

The disbursement of public investment from the state budget has reached 60 percent, the highest ever level. The disbursement of ODA has also improved, but is still low.

Public investment is expected to play a very important role in promoting economic growth in 2020 and the enterprises in the building material sector are the biggest beneficiaries, economists say.

The Ministry of Transport (MOT) said that it has been difficult to mobilize credit capital for the huge eastern North-South Expressway project.

Boosting the disbursement of all planned public investment would help increase this year’s gross domestic product (GDP) by 0.42 percentage points, according to the General Statistics Office (GSO).

Urban railway projects have been proceeding slowly and investment capital has become many times higher than initially estimated.

The Hanoi station-Nhon elevated railway project will be completed by 2022 after trains are brought to Vietnam in July 2020.

The Ministry of Planning and Investment (MPI) must review obstacles in disbursing public investment as well as accelerate the speed of capital allocation, especially Government bonds and official development aid (ODA).

Commercial bank loans, venture funds and foreign capital are ready to disburse money for profitable projects in Vietnam.

The recent research of international institutions have found problems in FDI in Vietnam: while the pledged investment capital is high, the disbursement is modest.

The State Treasury reports that it has fulfilled 84 percent of the year’s capital mobilization plan, but only 8.5 percent of the disbursement plan has been implemented. 

The slow progress of ODA fund and public investment disbursement may result in huge losses for the whole economy, thus, it is necessary to find ways to use these sources of funding efficiently and transparently to spur economic growth.

Commercial banks have pumped VND5,000 trillion into to the economy so far this year. But funds raised from banks through government bond issuances are still waiting to be disbursed.

VietNamNet Bridge - Banks’ liquidity is strong, government bonds have been selling well, and bank interest rates and the dong/dollar exchange rate remain stable. However, the growth rate of the economy has been slowing.