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G-bond disbursement improves
Viet Nam has disbursed VND47.3 trillion (US$2.25 billion) of capital raised via Government bond sales as of early December, completing 78 per cent of the disbursement plan of the year, the State Treasury's statistics show.
The capital source was designed to finance several sectors, including transportation, urgent irrigation works, health care service projects, education and training in poor areas and flood regions, and other projects to be finalised in 2011 and 2012.
The ministries of finance, and planning and investment, and the National Assembly's Economic Committee saw the VND47.3 trillion volume the highest figure ever achieved.
Disbursement had been targeted at VND56 trillion ($2.67 billion), of which VND20.2 trillion ($961.9 million) would be disbursed at the central level and another VND35.8 trillion ($1.7 billion) local and municipal bonds.
"In order to meet the year's target, about VND11.2 trillion ($533.3 million) worth of bonds would have to have been disbursed in the single month of December 2010, equal to about 20 per cent of the target for the whole year. That wouldn't be easy to do," said National Assembly Finance and Budget Committee chairman Phung Quoc Hien.
Do Ngoc Quynh, General Secretary of the Viet Nam Bond Market Association, said: "Missing the target in Government bond fund disbursement is a serious problem for Viet Nam. However, what the National Assembly is thinking about now is the quality and effectiveness of disbursement."
The National Assembly Finance and Budget Committee earlier this month reported that some provinces had disbursed Government bond proceeds to the wrong projects, the wrong sectors, or to unapproved projects.
The National Assembly Standing Committee and the Finance and Budget Committee refused the Government's proposal to add 40 projects to the Government-bond funded project list.
Hien's committee has found that initial capital plans for Government-bond funded projects during 2003-10 were just VND246.5 trillion ($11.7 billion), but the actual figure has soared 226 per cent to nearly VND558.7 trillion ($26.6 billion) during the period.
"Total investment has increased too sharply against the State's capacity to balance the budget, badly affecting the nation's capacity to borrow and to service debt," said Hien.
In 2010, Viet Nam raised about VND70 trillion ($3.3 billion) in Government bond sales, according to the Viet Nam Bond Market Association.
To lower the nation's public debt burden, which rose to 57 per cent of gross domestic product this past year, the National Assembly has already approved a Government plan to raise only VND45 trillion ($2.14 billion) this year, with top priority for bond proceeds to be given to transportation and water resource projects.
The Standing Committee late last week also urged strong measures to eliminate ineffective projects and improve the effectiveness of public investment.
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