VN-Public Investment Reform 2

closed

Closed

The objective of the Second Public Investment Reform Operation Program for Vietnam is to support one of the emerging priorities of the Socio-economic Development Strategy (SEDS) 2011-2020, namely to raise productivity of investment. Improving the efficiency of investment has emerged as one of the key economic priorities in Vietnam. The country has already achieved rapid economic growth and fast poverty reduction over the last twenty years. However, there is a growing concern that the momentum of a growth strategy that is largely based on factor accumulation may have run its course. Vietnam has one of the highest investments to Gross Domestic Product (GDP) ratios in the world, averaging around 43 percent of GDP during the past five years. But the growth rate has not been commensurate with this high investment rate. The inefficiencies in public investment are partly the result of inherited institutional constraints. During the command and control period, public sector investments used to be managed by the Ministry of Planning and Investment (MPI). MPI used to compile proposals from line ministries, provincial governments and State-Owned Enterprises (SOEs) and arbitrate among competing demands. The weaknesses of the public investment cycle have also resulted in cost overruns, time delays and slow disbursement of development assistance. There are important gaps between Vietnam's national system and international practices in areas such as environmental screening and environmental management, project preparation and appraisal, procurement, public financial management, the regulatory framework for private participation in infrastructure, and monitoring and evaluation. The program is designed to assist the government of Vietnam (GoV) to strengthen the selection, preparation, implementation and supervision of public investment projects. While much progress has been made over the last decade in the upgrading of public financial management in relation to recurrent expenditures, there are still important weaknesses in the management of investment projects. The program supports a series of policy measures which are expected to strengthen the effectiveness of public investment in Vietnam. The program aims to improve all public investment projects, regardless of their source of funding. The operation, is the second and last in a programmatic series of two.

FY17 - Industry, Trade and Services,FY17 - Public Administration

World Bank Group

Project

Government