Anti-graft drive stuns Vietnam’s aim to revive public spending
The country’s prime minister is calling on state officials to take responsibility for expenditure decisions, overcome fear of making mistakes
VIETNAM is scrambling to boost state spending after the pace of Budget utilisation in the first half of the year decelerated, as government officials wary of an anti-graft campaign dither over decisions.
The government aims to increase spending in H2 to ensure at least 95 per cent of its Budget is utilised, up from just 29.4 per cent in H1 2024.
The expenditure ratio was slower than the 30.5 per cent notched in the same period in 2023, the Vietnamese government said.
“Quickening public investment is crucial for the country’s economic growth now,” said economist Tran Dinh Thien, a member of the National Financial and Monetary Policy Advisory Council.
The council advises the Vietnamese government on macroeconomic policies.
Especially crucial would be allocating funds for infrastructure that has a ripple effect across the economy, he said.
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Although Vietnam’s economy expanded a better-than-forecast 6.9 per cent in the June quarter from a year earlier, the International Monetary Fund projects full-year growth to come in at 5.8 per cent – behind the Philippines’ estimated 6.2 per cent.
Even that performance is not guaranteed for the trade-reliant nation, as much depends on a durable recovery in global demand for goods.
While public spending remains the one thing that the government can control, officials have been putting off financial decisions for fear of being snared in the Communist Party’s “blazing furnace” anti-corruptive drive.
“Officials are afraid of taking responsibility and being held accountable if anything goes wrong given such inconsistent and contradicting regulations of which they can get stuck in between,” Thien said.
He noted that these have significantly hindered the spending of public investment.
Prime Minister Pham Minh Chinh called on state officials to show “determination to overcome the situation of avoiding taking responsibility and fear of making mistakes”. BLOOMBERG
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