The Ministry of Planning and Investment (MPI) has made public the figures on projects (using the State budget) that have been stopped or suspended to implement Decision No 390 by Prime Minister Nguyen Tan Dung.

The Deputy Minister of Planning and Investment, Cao Viet Sinh, said that so far, State-owned groups and corporations have cut over VND34 trillion (US$2 billion) from unnecessary projects.

"This is a real cut," he said. "The ministry will not supply capital or lend capital for the groups and corporations to implement other projects."

Deputy Minister of Planning and Investment Nguyen Duc Hoa also said more than 1,700 projects that use investment capital from the State budget have been suspended or slowed down. This saved more than VND5.6 trillion for the State budget.

Localities will also cut down on such expenses as petrol, electricity, water, conferences, vehicles and repair in the last months of this year.

Deputy Minister of Finance Tran Xuan Hoa also said the Ministry of Finance did not have a plan to increase total investment capital or add more expenses to projects. The ministry has cut VND9.3 trillion of investment from State bonds, equivalent to 25 per cent of the capital estimated for the whole year.

According to the Government’s solutions to stabilise the macro economy, the ministries, sectors and localities will this year cut down 10 per cent of investment that use the State budget, about VND14 trillion ($833 million).

Economists have made comments on these drastic measures. Dr Nguyen Quang A, member of Management Board of VP Bank, said he was afraid that the ministries, sectors and localities were simply shifting capital to other projects not trully cutting down.

"Without a real cut, it’s hard to curb inflation. All this is an attempt by enterprises to increase their investments’ effectiveness," he said.

Dr Nguyen Minh Phong from Ha Noi Socio-Economic Development Institute also shares the same point of view, stating that, "Stronger and more practical solutions are needed to review the list of investment projects."

"Investment is attached with local benefit, and it also creates benefit for some officials [who have the right to approve or manage the projects] so it is necessary to identify the responsibility of officials in cutting down unnecessary projects," he added.

Source: Viet Nam News