Slow disbursement: 13 Ministers and Provincial Chairmen criticized by Prime Minister

Minister, Head of the Government Office Mai Tien Dung, Head of the Prime Minister's Working Group, said that Prime Minister Nguyen Xuan Phuc "severely criticized" 13 provincial Chairmen, Ministers, and Heads of units for slow disbursement of public investment capital.

Deputy Prime Minister requested to review slow disbursement of public investment capital.

On July 25, the Prime Minister's Working Group inspected 13 ministries, agencies and localities on the disbursement of public investment capital in 2017. The disbursement rate of these units as of June 15 was still below 20%.

Speaking at the opening of the inspection session, Head of the Prime Minister's Working Group, Minister Mai Tien Dung, said that the Government has agreed on measures to promote economic growth, including accelerating the disbursement of public investment capital, and assigned the Working Group to supervise and inspect.

“One of the bottlenecks of growth is slow capital disbursement. We have to pay interest on loans to mobilize resources, but the money is stagnant and cannot be spent. The surplus capital deposited at the State Treasury is always around VND120,000 billion,” said Minister Mai Tien Dung.

“First of all, convey the Prime Minister’s criticism to ministries, agencies, and localities with slow capital disbursement. The Prime Minister was very strict, constantly reminding me to convey the criticism to the Provincial Chairman, Minister, and Heads of 13 units today,” the Head of the Working Group stated.

According to the Minister, the main cause of the delay lies with the leadership of the agencies, who are not decisive or specific in their direction. Along with that are the problems of procedures, capacity of the construction unit, and obstacles in site clearance.

“The Prime Minister even said that there is a phenomenon (which will be checked later) of pushing up the disbursement progress and then advancing capital to deposit money in banks, which means increasing the disbursement rate but the money is not used for development investment. Of course, the ministries and branches do not have it, because if there was, the disbursement rate would have increased, but there is such a trick, today it is public, transparent, and checked, if there is, it is unacceptable,” Minister Mai Tien Dung clearly stated.

Along with that, there are units that have completed a very large volume but are very strict in advance payment, payment, "only us with us but cannot advance". There are units that do not follow the regulations in the Law on Public Investment, must establish the project from October 2016 but only established it in May-June 2017. The Prime Minister has assigned the Ministry of Planning and Investment to synthesize the shortcomings and problems in the Law on Public Investment to propose adjustments.

Accelerating disbursement of capital for investment is an important task in the last 6 months of the year.

The Prime Minister requested ministries, branches and localities, including 13 units today, to have the strongest solutions to focus on drastic disbursement. If the construction contractor's capacity does not meet the requirements, replace the contractor. If the monitoring staff is not good or has problems, arrange and replace the staff. If it is due to the site, they must directly direct the site clearance. The spirit is that the heads of the units must directly direct, "it is unacceptable that there is money and capital but it cannot be spent due to our procedures, due to lack of drastic direction".

Minister and Head of the Government Office Mai Tien Dung emphasized that if units do not disburse funds in time by October, the Prime Minister will be forced to transfer capital. In 2016, some ministries and local agencies disbursed funds slowly and the Ministry of Planning and Investment has advised the Prime Minister to consider carefully when allocating capital this year.

Minister Mai Tien Dung requested that the units attending the inspection session clearly explain the reasons for the delay and commit to taking responsibility if the disbursement continues to be slow. If the delay is due to procedures, it should also be reported to the ministries and branches for resolution.

Slow disbursement will put pressure on the entire economy.

According to the Ministry of Finance, there are 13 ministries, agencies and localities with slow disbursement rates, as of June 15 only reaching less than 20%. After being urged, the disbursement situation of these units has had positive changes, some units reaching over 20%.

Specifically, as of July 17, the disbursement rates of these units are as follows: Ministry of Planning and Investment (disbursement rate 13.3%), Ministry of Foreign Affairs (5.1%), Ministry of Health (16%), State Bank (5.8%), Ethnic Committee (61%), Vietnam News Agency (8.5%), Vietnam Veterans Association (4.5%), Hanoi (33.4%), Ho Chi Minh City (26%), Da Nang (24.7%), Binh Duong (20.9%), Binh Phuoc (28.1%), Tay Ninh (22.9%).

According to the Prime Minister's Working Group, in addition to making it difficult to achieve GDP growth targets, slow disbursement will force the Government to bear the interest of people's loans.

“By the end of 2017, public debt will increase to 65% of GDP, reaching the ceiling of 65% set by the National Assembly. When public debt reaches the ceiling, the Government will have to consider domestic borrowing. To borrow and cover the budget deficit, macro-management tools such as interest rates, exchange rates, etc. will be used. This will put pressure on inflation and the entire economy. Mobilizing from issuing government bonds but then not being able to “spend”, “spending slowly”, and remaining in the bank is “vicious”, the report of the Working Group clearly stated.

According to Chinhphu.vn