Attracting Investment in Infrastructure in Vietnam has not been as Expected

Attracting Investment in Infrastructure in Vietnam has not been as Expected

Deputy Minister of Planning and Investment Nguyen Van Hieu emphasized this at the workshop "Vietnam Cooperation - World Economic Forum on Infrastructure" in the morning of November 11, 2017. The workshop is the starting point for the cooperation "The future of long-term investment, infrastructure and development" co-chaired by the Ministry of Planning and Investment and the World Economic Forum.

The workshop focused on discussing the orientation of cooperation between the Vietnam Government and the World Economic Forum - Agenda in 2017 and 2018; Its activities is to organize cooperation such as setting up an Infrastructure Working Group (IWG); Secretariat and operational mechanism of the TWG.

At the same time, to exchange experience on assessment issues and standards over national PPP infrastructure programs, to identify opportunities and challenges for investment in infrastructure development in Vietnam in the context of the world and the region; Sustainable Development Investment Partnership (SDIP), to promote sustainable infrastructure development through integrated finance, of which promotes the socialization of infrastrure development and investment through PPP form.

Speaking at the seminar, Deputy Minister of Planning and Investment Nguyen Van Hieu said that Vietnam has experienced more than 30 years of Doi Moi and gained some achievements in socio-economic development. However, the reality in recent years has indicated that Vietnam's economy is showing signs of growth downturn, extremely difficult to escape the middle-income trap. This may be due to the cost of investment and project effectiveness is increasingly unattractive to attract domestic and foreign investors for long-term investment in key projects which have global chain scales and international and regional competitiveness. This is a challenge for Vietnam's sustainable economic growth in the future.

According to calculations, the demand for investment in infrastructure development in Vietnam to the year 2030 is quite large (estimated at VND 3 million billion excluding railway infrastructure, waterway transport, and aviation). At that time, the balance of State budget approved by the National Assembly in the medium plan 2016-2020 is about VND150 trillion. Mobilizing non-state budget resources in various forms on the basis of intensifying the socialization of infrastructure investment projects is considered as the only solution that the Government is interested in the coming period.

"In order to supplement this resource, the Government has made a great deal of efforts to attract domestic and foreign investors to invest in infrastructure development, especially in the form of public-private partnerships (PPP). However, the implementation of policies in the search and implementation of PPP projects in Vietnam still faces many challenges. The results of investment attraction in infrastructure in Vietnam have not been as expected, not corresponding with the potential of investors, "Deputy Minister Nguyen Van Hieu said.

"In the process of moving forward a middle income country, Vietnam will be very difficult to rely on public resources. So two-thirds of this money will be taken from private money and the implementation of PPPs will be very beneficial, "said Alex Wong.

At the same time, Alex Wong hoped to establish an interactive infrastructure team with representatives of all sides from the government, businesses and scholars to solve the problem facing Vietnam over infrastructure, as well as identifying what the best ideas are about solving the capital challenges.

At the seminar, Deputy Minister Nguyen Van Hieu expressed his wish, the World Economic Forum with a team of experienced experts, as well as in-depth studies, with the participation of many investors, many Leading enterprises will have many initiatives and recommendations to help Vietnam perfect the legal framework, improve the investment environment to create trust and attractiveness for domestic and foreign investors to invest in infrastructure development in Vietnam.

"With the help of the World Economic Forum and with a sense of responsibility, effective cooperation, we hope that you will be with us not only during the conference but both the cooperation program in 2017 and 2018, "said Deputy Minister Nguyen Van Hieu.

- According to Economic Forecast by Ministry of Planning and Investment - 

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