Dr Tran Kim Chung, Deputy Director of the Central Institute ofEconomic Management, said in an interview with Nhan Dan (People)newspaper that the effective implementation of the Law on PublicInvestment would help bring public debt under control.

*What are the most notable results after three years of restructuring public investment?
There has been significant improvement in the system of publicinvestment management policies. The first is Directive 1792/CT-TTgissued by the Prime Minister on strengthening management of capital fromthe State budget and bond issuance.

The implementation ofthis directive has made a large impact on curbing inefficient anddispersed investment. Since 2012, a principle has been established thatpublic investment must be made within the budget and those who makeinvestment decisions must be held accountable. Following Directive 1792came a number of other directives on streamlining public investment.

A series of directives issued by the Prime Minister have helpedstrengthen the management and effectiveness of public investment. Andmost importantly, the Law on Public Investment, the highest legal basisto regulate this activity, has been approved by the National Assemblyand will take effect on January 1, 2015.

With these legaldocuments, the ratio of public investment to GDP has decreasedsignificantly. In 2011, total investment in development accounted for36.4 percent of GDP, dropping to 33.5 percent in 2012 and 30.4 percentin 2013. In 2014, the ratio is estimated at 30.1 percent, according to aGovernment report to the National Assembly. So the goal to bring theratio of investment in development to 30-35 percent of GDP has beenachieved.

State investment capital will now be used as amagnet to attract capital from other sources. I think that it is hard toassess whether the progress of public investment restructuring is fastor slow because we do not have any criteria with which to measure it;but, compared with the set target, we have achieved certain results.

*Is it because we do not have a master plan on public investmentrestructuring that we cannot assess the progress of restructuring inthis area?

In my opinion, although we do not have a master planon public investment restructuring like the banking sector andState-owned enterprises, the road map and restructuring steps are infact very clear and they are being implemented nicely. The lack of such aplan does not affect the progress of public investment.

*Should we anticipate that the Law on Public Investment willsubstantially push through public investment restructuring in thefuture?

Not many laws have a good start like the Law on PublicInvestment. The implementation of Directive 1792/CT-TTg has laid thefoundation for the effective implementation of the Law on PublicInvestment, which has a broader scope and greater impact. Therefore, theimplementation of this law will definitely further accelerate publicinvestment restructuring. In order to achieve that goal, documentsguiding the implementation of this law should be adopted as soon aspossible. Besides the Law on Public Investment, we need to have a law onplanning and amend the Law on Budget, the Law on Investment and anumber of other decrees on investment so as to perfect the legal basisfor public investment activity.

*How should public investmentrestructuring be implemented to make sure the level of public debt issafe given the fact that Vietnam’s public debt has grown to a higherlevel?

The rise in public debt can still be manageable ifpublic investment restructuring is implemented in a systematic andserious way. Public investment projects at both central and local levelswill be closely scrutinised before approval; if there is a rise ininvestment; it will be controlled right from the first stage whenprojects are approved. Now when the law comes into effect, there willnot be unexpected and excessive rises in public debt.

Meanwhile the capital borrowed by central and local governments toinvest in State-owned enterprises are not subject to the Law on PublicInvestment but to the Law on Budget, Law on State Capital Management andLaw on Public Debt Management. At this plenary meeting, the NationalAssembly is expected to approve the Law on Investment and Management ofState Capital in Enterprises .-VNA