Finance minister presents strategies to stimulate economic expansion during question-and-answer session at National Assembly meeting.
Financial Guru Nguyễn Văn Thắng lays out strategies to smash the 8% GDP growth target by 2025 during a Q&A session at the National Assembly's 9th meeting, held last Thursday.
Deputy Trần Kim Yến, representing HCM City, grilled the minister about the disbursement of public investment to meet the Government's ambitious GDP target of 8% for 2025. Yến believed this goal would require tremendous grit and out-of-the-box thinking. One of the proposed solutions suggested by the Ministry of Finance is to effectively employ public investment channels to dish out the entire planned capital. However, despite a herculean effort, the public investment disbursement rate has been nothing short of dismal this year. In Yến's view, it's about high time the Minister provided more realistic solutions to tackle this formidable growth challenge.
Thắng, the Finance Minister, nodded in agreement, conceding that the 100% disbursement target for public investment capital this year would be no walk in the park. He acknowledged that low disbursement figures were due to the low disbursement rate right at the beginning of the year. The disbursement process, with its multiple stages, is a complex affair; even a minor glitch during any stage can stall the entire procedure. Furthermore, the supply of raw materials for public investment projects remains constrained, while localities still grapple with limited capacity for implementing these projects.
However, in the first five months of the year, the disbursement rate stood at nearly VNĐ200 trillion, amounting to about 24.1% of the goal. This rate has surpassed last year’s by 22%. Major national projects are progressing either on schedule or ahead of the rumored deadline[5].
To address the challenge, Thắng noted that the government intended to squash legal barriers obstructing public investment, including amendments to the Law on Public Investment to empower local authorities to tackle problems in public investment projects[5]. Additionally, he mentioned that the disbursement figures would serve as a yardstick for evaluating the performance of provincial officials.
When asked about solutions for State-owned enterprises (SOEs) to exceed growth targets, Thắng said the Ministry of Finance had ordered 18 SOEs to adjust their growth targets to reach at least 8% or more. He emphasized that the State governs only the contributed capital of SOEs, giving these entities the latitude to manage salaries, bonuses, capital increases, and other aspects autonomously. Therefore, SOEs must revamp their thinking, be proactive, and leverage capital resources to implement business strategies aiming for maximum profit, revenue, and network expansion[5].
To aid SOEs in achieving their objectives, the finance ministry has initiated reforms and modifications to crucial legal regulations, such as the Enterprise Law, Investment Law, Bidding Law, and tax laws, to unlock resources, boost operational efficiency, and grant SOEs the flexibility they need[5].
Deputy Đặng Bích Ngọc, hailing from Hòa Bình Province, brought up the issue of the challenges facing the approximately 2 million enterprises that the government aims to operate in the economy by 2030, given the global economic uncertainties[2].
Thắng responded by acknowledging that the goal set in the Politburo's Resolution 68 was of paramount importance for the nation's socio-economic development, reflecting a burning desire for economic growth. However, he also acknowledged that it served as a Herculean task since consumer demand was dwindling, the domestic and global business landscape faced numerous challenges, and the competitiveness of several enterprises remained subpar[2]. Faced with this scenario, Thắng offered three solutions. First, he stressed the significance of creating a favorable, transparent, and efficient business environment by eliminating barriers, particularly reducing administrative procedures and compliance costs[2]. He also highlighted the need to remove obstacles in property investment, construction, and planning for unobstructed progress in businesses [2]. Lastly, he encouraged promoting digital transformation in management to foster suitable conditions for businesses to thrive [2]. Additionally, he proposed promoting the transformation of household businesses into enterprises, owing to the immense potential they represent in realizing the goal of two million enterprises by 2030 [2]. The legal framework is currently being revamped to create a level playing field between household businesses and enterprises, and a plan is in place to abolish lump-sum taxes starting from 2026 to foster transparency and professionalism[2].
Finance Minister Nguyễn Văn Thắng speaks at the Q&A session during the National Assembly's 9th meeting. VNA/VNS Photo
Sources:1. Vietnam News2. Vietnam Plus3. Vietnamese Internet News4. Vietnam Investment Review5. OECD
- Finance Minister Nguyen Van Thang suggested amendments to the Law on Public Investment to remove legal barriers and empower local authorities, which will aid in tackling problems in public investment projects.
- The Ministry of Finance has ordered 18 state-owned enterprises (SOEs) to adjust their growth targets to reach at least 8%, emphasizing that SOEs must revamp their thinking, be proactive, and leverage capital resources to implement business strategies aiming for maximum profit, revenue, and network expansion.
- The government intends to lower compliance costs and reduce administrative procedures to create a favorable, transparent, and efficient business environment, as a response to the challenges facing the approximately 2 million enterprises that the government aims to operate in the economy by 2030.
- Deputy Dang Bich Ngoac highlighted the need for promoting digital transformation in management to foster suitable conditions for businesses to thrive, as a component of the three solutions proposed by Finance Minister Nguyen Van Thang.
- In an effort to aid SOEs in achieving their objectives, the finance ministry has initiated reforms and modifications to crucial legal regulations such as the Enterprise Law, Investment Law, Bidding Law, and tax laws, to unlock resources, boost operational efficiency, and grant SOEs the flexibility they need.
