Minister Bui Quang Vinh talks about asking - giving, harassment in investment

Inaccuracies in statistics, questions about the decline in foreign investment capital, and expectations about medium-term public investment policies are issues raised in this week's "People Ask, Ministers Answer" column. Minister of Planning and Investment Bui Quang Vinh answers these concerns of the people.

Minister of Planning and Investment Bui Quang Vinh

** The first question is from a retired man who sent a letter to the column: Dear Minister, even Prime Minister Nguyen Tan Dung had to exclaim that in every province I worked in, the GDP was from 9-14% while the whole country only had 5.8%. The Prime Minister affirmed that the current way of calculating the GDP of provinces and cities is not accurate, not true to reality and is different from the international one. The Minister knows better than anyone how important statistics are to the development of each country. When will the Minister be able to unify the numbers and give the people the most realistic picture of the economy?

Minister Bui Quang Vinh: It can be said that this is an unnecessary thing in our macroeconomic management, because the vast majority of countries in the world only calculate GDP at the national level, few countries calculate GDP for regions and localities. There are several problems here, first is that calculating GDP at localities is not accurate, because there are many items that are counted twice and missed.

For example, many industries operating nationwide such as banking now cannot allocate costs to 63 provinces and cities, so there is duplication, or taxes, insurance, defense and security activities. Or the same with businesses, they are headquartered in Hanoi but have economic activities in the localities, so calculating how much to allocate to the localities is not accurate.

The second thing is that our input data at the localities is also not accurate, or other problems create data discrepancies between the central and local levels.

Our view is to gradually only calculate the national GDP. We have introduced a process and reform to narrow down the data. Starting from 2016, the Prime Minister has agreed to the plan of the Ministry of Planning and Investment that localities will provide data, and the Central Government will calculate GDP for localities.

Thus, the allocation of national costs such as banking and insurance will be closer and more appropriate. The implementation will start from 2016 because the old calculation method must be kept in 2011-2015 to be consistent with the 5-year plan that localities have built. I hope that by then, this data difference will be greatly reduced.

** Next is a question from a resident of Phu Yen: Dear Minister, in the first 9 months of this year, foreign direct investment in Vietnam was only over 11 billion USD, down 25.5% compared to the same period last year. I read the newspaper and listened to the radio and learned that many million-dollar and billion-dollar projects were abandoned and then super projects were transferred. Even in my province a few years ago, there was a big announcement that an American investor was doing a project worth tens of billions of USD but also had its license revoked. As the Minister of Planning and Investment, do you feel impatient?

Minister Bui Quang Vinh: We should not compare FDI attraction in the same period this year with the same period last year, because attracting foreign direct investment is like “waiting for rice from people”, because the decision to invest or not, not only depends on Vietnam’s investment desire but also depends on foreign investors. While they are subject to many impacts of foreign corporations themselves, or they go bankrupt, bogged down in the projects of their corporations that are implementing.

Also, because of geopolitical issues, it's not just their economic decline that depends on many other issues.

Thus, the increase or decrease cannot be assessed as good or bad in attracting investment in Vietnam, that is not everything.

Therefore, we must calculate foreign investment in a certain period to be sufficient, just like calculating ICOR, it must affect the following years. Therefore, evaluating foreign investment for a 5-year period is appropriate.

In addition, it is true that Phu Yen is a small province, but there are many huge projects that ultimately cannot be implemented. In addition, there are also some virtual projects by some international brokers that are not done properly. If we are not alert, many projects will not be able to be implemented.

The Ministry of Planning and Investment has issued many documents reminding localities to be cautious when approaching large projects and to report to the Government. These projects also cause waste, but not much. In some industrial zones, it is true that there are some projects that have been invested in but are not effective, and we have directed the revocation of the project's operating license.

** Another citizen interested in the public investment sector sent a letter to the column saying: We recently read in the newspaper that the Minister announced that the medium-term public investment policy will eliminate the mechanism of asking for and giving. Can the Minister explain more clearly how the Minister thinks it is possible to eliminate the mechanism of asking for and giving in the investment issue?

Minister Bui Quang Vinh: The problem is that normally, a group C project takes 3-4 years, group B 4-5 years, a group A project takes longer, so if you decide to invest in a project, you have to know where to get the money, you can't wait to sign an investment project and then run for capital, we've done that in the past.

Now, to solve this problem, the first thing we have to do is see how much money is in the central and local budgets, choose important projects that have a ripple effect across the country, and invest.

Therefore, we have proposed to the Government to issue Directive 1792 to rectify this.

Up to now, the Law on Public Investment is essentially an upgrade of the Government's Directive 1792 to provide strong solutions on public investment, how to use this resource most effectively while our capital is limited.

There are many contents in this issue, before signing the decision to invest in a project, you must review whether the policy is really effective and base it on the theoretical basis of economic efficiency, and be responsible for where the money comes from to invest to complete the project, not to prolong the time, which is the premise to ensure the project is effective, this is the medium-term public investment plan.

Because medium-term public investment means we have to calculate many issues and resources in 5 years, linked to the socio-economic development plan of a country, locality, ministry and industry and build resources to implement this issue, that resource is public investment.

In addition, the Government needs to announce how much money it will provide to localities in the next 5 years, thereby giving the localities the initiative to arrange. Thus, localities and ministries will know how much money is available in the next 5 years, and which projects to allocate for the Central Government to review.

At that time, they also do not need to run around anywhere, they will use it more flexibly, if not used up this year, they will transfer it to next year. This is a transparent issue and in accordance with international practice, and our ODA projects have done so, they must report how much money they have spent so that they can provide enough for us.

Thus, localities and businesses are very secure because then they know that when they win bids for projects, they will have money, reducing public debt and not allowing them to exceed the volume.

A practical example is that as soon as we took on the task of leading the Ministry, we submitted to the Government and the National Assembly the proposal to transfer all the capital of the Government bonds for the period 2011-2015 to the medium term, and announced how many portfolios there were, the National Assembly would decide how much money for each portfolio, and how much money would be allocated each year. Since then, no ministry or locality has requested the Ministry of Planning and Investment.

I think this is the most fundamental and basic measure to limit begging and harassment in this field.

** Thank you very much, Minister!./.

According to VOV