(VOV) -Reducing public and foreign debts to a level below the manageable threshold and ensuring national financial security demands enhancing the efficiency of public investment.
National Economic University (NEU) Prof. Dr. Pham Van Hung underscores the need to restructure outstanding debts and future borrowing conditions.
In regards to borrowing capital, increasing the rate of domestic debts will help gradually reduce the country’s dependence on foreign debts, keeping expenses and debts at a reasonable level, he says.
Foreign debts should be below 50 percent of the total debts by 2020. Debts from official development assistance (ODA) should be kept at 60 percent of foreign debts.
Drastic measures are needed Prof. Hung argues that without enhancing the efficiency of public investment, the government will face the risk of a public debt crisis like the one hitting other economies. First, public investment activities should be strictly controlled. Laxity regarding the government’s debts and expenses could lead to economic losses and political and social instability across the region.
The restructuring of public debts should eliminate unnecessary and wasteful projects.
Transparency is crucial to optimising the control of public investment activities.
Depending on the scale of public investment projects and the capacity of their main contractors, options include self-management, consultancies, or delegating to another investor.
No neglect of public investment planning
Public investment planning needs should fit in with the annual and five-year plans for socio-economic development.
The government’s annual public investment planning budget should cover key national projects using local investment resources and capable of sticking to schedule.
NEU Prof., Dr. Do Duc Binh says it is crucial to get a good rerun on borrowed investment capital.
The government needs to clearly define development targets and implementation plans so as to avoid unnecessary investment in underresourced sectors.
Financial sources and public debt management culpability regulations should be made public along with the regular evaluation of investment project efficiency.
Borrowing money for development is unavoidable. But how much can Vietnam afford to borrow?
Prof. Binh says one must learn from the European Union’s practical views on the importance of safe public debt limit in association with GDP, state budget planning, and trade balance.
The National Assembly needs to consider and fix a reasonable level of public debt and budget deficit for Vietnam in line with international norms.
Đăng ký: VietNam News