Along with public investment, private investment will be the factor that pushes the economic "wheel" forward. Therefore, more incentive mechanisms are needed in this field.
Mr. Nguyen Quoc Hiep - Chairman of the Vietnam Association of Construction Contractors - had an interview with reporters of the Industry and Trade Newspaper about this issue.
Rare opportunity for construction contractors
- Public investment is a component of the "tripod" of economic growth drivers, however, disbursing the largest amount of capital ever in 2025 is considered not easy. What is your comment on this?
Mr. Nguyen Quoc Hiep: It can be said that the economic growth target of over 8% is a challenging target and depends on many factors. One of the pillars of economic growth is public investment. The state public investment budget is also sufficient and everything is ready. In 2025, the target of disbursing public investment capital is 36 billion USD, equivalent to 875 trillion VND, the highest ever.
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| The public investment plan for 2025 will be increased to 36 billion USD, equivalent to 875 trillion VND. Illustrative photo |
In the recent past, the Prime Minister has continuously urged ministries, branches and localities to concentrate their efforts on this task. However, to disburse investment capital, this work depends on many factors, which can be policies from coordination of site clearance, compensation, bidding, payment mechanism. Public investment is not simply spending the budget, but must have sufficient conditions to be able to spend.
Obviously, although the budget is ready, it is not easy to be determined to disburse the entire amount of 36 billion USD in 2025. In addition, the apparatus of ministries, branches and localities are all reorganizing and rearranging, so in the second quarter, the disbursement of public investment capital will also slow down. GDP growth in the second quarter may not be as expected.
So, going back and forth, we have lost 2 quarters. Therefore, to achieve the 8% growth target, we have the remaining time to focus on the last 2 quarters of the year. This is an extremely difficult task.
Construction contractors will mainly carry out public investment projects. To do so, they must work hard, and whether they can do it on schedule and at the cost they want is also a problem.
However, all construction enterprises also identify this as an opportunity to create jobs, ensure output value as well as desired revenue. This is also a rare opportunity for construction contractors.
However, not all efforts will achieve results. Currently, construction works and projects need to be accelerated. However, construction contractors are facing many difficulties, of which human resources are the biggest difficulty.
- Currently, human resources are the most difficult for contractors, can you share specifically about this?
Mr. Nguyen Quoc Hiep: The difficult labor market is due to two factors. Firstly, the salary mechanism of the construction industry is not yet encouraging. Currently, almost every locality has industrial clusters and industrial parks, while the labor industry has a characteristic that 70% are idle agricultural workers, these workers now do not travel far to work, do not work in construction anymore but work for industrial parks and clusters. Therefore, construction projects have to take a lot of labor from ethnic minority areas.
Meanwhile, our source of technical, skilled, trained labor is very limited, businesses have to take care of themselves, and the training schools that were previously run by the state are now narrowing their scope... Therefore, training technical workers is very difficult.
Need to create a favorable environment for businesses
- Along with public investment, private investment is also a factor that pushes the economic "wheel" forward. For private investment to develop, what is the most important factor, sir?
Mr. Nguyen Quoc Hiep: 2025 is the final year of the 5-year Socio-Economic Development Plan 2021-2025. Therefore, the Government's target of over 8% growth this year will be the foundation to create momentum for the next stage - a new era for the nation. The Party and Government's determination to reform institutions is a key factor in achieving the set goals.
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| Mr. Nguyen Quoc Hiep - Chairman of Vietnam Association of Construction Contractors. Photo: Vietnam Real Estate Magazine. |
In my opinion, if we want the economy to develop and the average income per capita to reach 4,900 - 5,000 USD/year or more, the important thing is to promote private investment.
Of the total social investment, public investment accounts for only about half, the rest must come from FDI and private investment. When private investment develops, it will push the economic "wheel" forward.
To develop private investment, the most important thing is to reform institutions so that investors can feel secure that the Government is truly open, creating favorable conditions for investment and bringing efficiency. Institutional reform lies in two aspects.
First , investment procedures must be transparent and open.
Second , to develop the economy deeply and sustainably, the Government needs to determine that it should not set short-term budget revenue targets but should look at longer-term goals, then the mechanism will be truly open. If only short-term goals are set, investment will not be encouraged.
In addition, regarding investment procedures, the Government has only mentioned institutional and legal reforms, but how to reform investment procedures is not clear. Therefore, it is necessary to pay attention to this important issue, so that investors can see that our procedures are very convenient, with a short time, only 6 months to 1 year, instead of having to take 2-3 years as at present to disburse.
Therefore, I recommend that in the targets assigned to ministries, branches and localities, it is necessary to be specific about administrative reform targets and investment procedures, not just assign targets on growth figures.
- Establishing working groups to resolve difficulties for real estate and housing projects, prioritizing the resolution of wasted resources, including suspended projects, is one of the solutions proposed by the Government to achieve the economic growth target of over 8%. In your opinion, what will be the key to freeing up these resources?
Mr. Nguyen Quoc Hiep: The good news is that in the 6 groups of tasks and solutions to achieve the growth target of over 8%, the Government is very interested in prioritizing the resolution of wasted resources, such as suspended planning, projects stuck in procedures, unused public land, disputed assets and protracted cases; focusing on removing bottlenecks in the real estate market to quickly increase supply... This is a very correct policy, but to turn it into reality, there is still a lot of work to do.
Many projects are in progress, but some are stuck in planning, some are stuck in procedures, and even just stuck in the name because the Bidding Law stipulates that it must be a joint venture, but after winning the bid, the company they set up on the basis of the joint venture is not accepted. The essence here is not a legal problem, but a procedural problem and this problem needs to be resolved.
Enterprises in the construction and real estate sectors in particular, and the business community in general, are looking forward to specific measures from ministries, sectors and localities to remove difficulties and obstacles, creating a favorable environment for businesses. Reforms must be carried out strongly and urgently, because time does not wait for us.
If we want to achieve growth of over 8%, we need to mobilize all our forces. Therefore, actions and measures must be very specific and detailed right from the first months of the year and the first quarter of the year. If we wait until May or June to complete, it will be difficult to achieve the growth target of over 8%.
If the Government's measures directed to ministries, branches and localities become concrete actions, the possibility of economic growth in 2025 being higher than in 2024 and reaching the target of over 8% is conditional.
Thank you!
The National Assembly has just passed a Resolution on supplementing the 2025 socio-economic development plan with a growth target of 8% or more. This year's public investment plan will be increased to 36 billion USD, equivalent to 875 trillion VND, about 84.3 trillion VND higher than the previously assigned plan and about 194.3 trillion VND higher than 2024. According to the Ministry of Finance's estimates, by January 31, 2025, the disbursement of public investment capital in 2024 reached 84.47% of the plan, equal to 93.06% of the level assigned by the Prime Minister, meaning that the target (95% or more) has not been achieved. 2025 is the final year of the 2021-2025 medium-term public investment plan, recording a record level of public investment. This is a huge pressure. Therefore, the requirement is set for ministries, branches and localities to accelerate disbursement from the beginning of the year. |
Source: https://congthuong.vn/don-luc-tang-truong-can-co-che-khuyen-khich-dau-tu-tu-nhan-376700.html
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