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(Aug 05, 2009) It was reported on July 14, 2009, that the Government of the Socialist Republic of Vietnam was to begin a comprehensive inspection of all basic construction projects receiving assistance from the country's fiscal stimulus package, in order to determine whether they are up to standard. Seven delegations of the Ministry of Planning and Investment (MPI) are to conduct the examination "in the context of Vietnam's economic recovery starting to gather pace," in order to prevent further project losses and to "discover obstacles and propose measures to ensure effectiveness of the government's stimulus package," an MPI official stated. (Ngoc Linh, Package Held Up to Light, VIETNAM INVESTMENT REVIEW, July 14, 2009, available at http://www.vir.com.vn/Client/VIR/index.asp?url=content.asp&doc=19068.)
The stimulus package in question consists of increased public investment of VND60 trillion (about US$3.37 billion) from government bonds. The Ministry of Finance has indicated, however, that the disbursement rate has been low, despite the government's efforts to promote the projects in order to create jobs and demand for building material. According to the MPI official, those projects that cannot be implemented or funded in 2009 would be stopped, and their capital would be redirected into other projects that could be completed by the year's end. Vietnam's National Assembly approved a law in June to supplement and amend provisions in five other laws to eliminate administrative obstacles that stood in the way of carrying out the basic construction projects. (Id.)
In April 2009, Prime Minister Nguyen Tan Dung stated that the country's total stimulus package was up to US$8 billion. In addition to the government bond issue used to finance the infrastructure projects, other parts of the package include US$1 billion to subsidize four percent of interest rates for loans of up to eight months; credit guarantees for export activities and the purchase of agricultural machinery and equipment; and tax cuts. Under Resolution No. 30/2008/NQ-CP of December 11, 2008, on Urgent Measures to Curb Economic Decline, Maintain Economic Growth and Ensure Social Welfare, some US$6 billion was authorized for the whole stimulus package. (Jury Still Out on Stimulus Package, VIETNAMNET, May 16, 2009, available at http://english.vietnamnet.vn/biz/2009/05/847956/; Thi Thuy Van Le, Vietnam's Policy Responses to the Financial Crisis, EAI BACKGROUND BRIEF, No. 447, at 7 (Apr. 14, 2009), available at http://www.eai.nus.edu.sg/BB447.pdf.)
|Author:||Wendy Zeldin More by this author|
|Topic:||Government finance More on this topic|
|Jurisdiction:||Vietnam More about this jurisdiction|
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Last updated: 08/05/2009