Page 5 - KTVNSO43

Summary

PPP Pressure to repay
22 OP EDS 26 BANKING - FINANCE

Lessons in attracting debt increasing
investment into projects

V ietnam’s average total social investment capital requirement I n addition to strictly complying with the public debt
for the five-year 2021-2025 period is some 32-34 per cent of
GDP. However, the average proportion of public investment safety threshold, many analysts believe that
capital over the five years accounts for only 16-17 per cent. Thus, if accelerating disbursement and removing bottlenecks
only public investment capital was to be used, it would be difficult in public investment should be given top priority. In the
to fully meet requirements. There are a number of bottlenecks context of slipping economic growth, capital costs are higher
limiting the effectiveness of public-private partnership (PPPs) in than before and ineffective utilization or waste of loan capital
Vietnam. Many countries have succeeded in promoting public- will put increasing pressure on debt repayments. According
private cooperation and resolving the associated bottlenecks, and to analysts, Vietnam’s debt management capacity is only
international experience shows that solutions focus mainly on three “average” while public debt safety indicators are assessed as
matters: mobilizing capital and creating liquidity; increasing project being quite sound, so the country still has fiscal space for
scale and portfolios; and improving governance capacity, implementing support policies in the 2022-2025 period.
transparency, and accountability. Vietnam has important lessons it Moody’s upgrade of Vietnam’s credit rating is also a good
can learn from elsewhere. opportunity to mobilize capital sources at lower interest rates.

32 BUSINESS 36 PROPERTY

Removing ‘BOTTLENECKS’
Promoting in land management and use
circular economic

development, C ertain legal regulations on land prices are no
longer effective in practice. Land use plans and
starting with Site compensation when the State recovers land is still
construction plans do not ensure consistency.
businesses low and not close to market prices, the application of
land valuation methods in practice remains
inadequate, and violations of land laws remain
common. According to analysts, the first key matter is
T he challenges Vietnam faces, such as resource depletion, to complete amendments to the 2013 Land Law and
other related laws to 2025 with a vision to 2030,
environmental pollution, and climate change, are becoming
increasingly complex amid population growth and ensuring consistency. In addition, land use planning
urbanization. Faced with this reality, the task of implementing a must become the key element of land policy. Land
circular economy will create major opportunities for rapid and valuations in general and associated methods in
sustainable development and quicken the pace of development. In particular are among key audit targets of State Audit
recent years, at some enterprises, the process of converting production of Vietnam (SAV). Taxes and other State budget
towards circularity is no longer theoretical but has been applied in revenues play an important role in the SAV’s audit
practice and produced specific results, with investment rising. activities regarding land.