Public investment plays a crucial role in driving the socio-economic development of a country. It refers to the state’s investment in various infrastructure projects and public services, primarily funded through the national budget. This article explores the key aspects of public investment in Vietnam, including its definition, subjects, management principles, and prohibited acts.
1. What is public investment?
The concept of public investment is defined in Clause 15, Article 4 of the Public Investment Law as follows: “15. Public investment is the investment activity of the State in public programs, projects, and other public investment subjects in accordance with the provisions of this Law.”
From the above definition, it can be understood that public investment primarily relies on the state budget. Public investment serves the purpose of designing and constructing infrastructure projects to promote socio-economic development.
Currently, the economy is growing at an increasingly fast pace, along with the emergence of various investment forms. However, public investment still plays a crucial role in Vietnam’s economy.
2. Subjects of public investment
The subjects of public investment are specified in Article 5 of the 2019 Public Investment Law as follows:
- Investment in socio-economic infrastructure programs and projects.
- In cases where it is necessary to separate compensation, support, resettlement, and site clearance into an independent project, for important national projects that the National Assembly reviews and decides on; for Group A projects, the Prime Minister or Provincial People’s Council reviews and decides on according to their authority.
- The separation of an independent project is carried out when approving the investment policy of an important national project or a Group A project.
- Investment to support the operations of state agencies, public non-business units, political organizations, and socio-political organizations.
- Investment and support for activities providing public products, services, and social welfare.
- State investment in projects under the public-private partnership (PPP) model.
- Investment to support the development, appraisal, decision-making, or approval, announcement, and adjustment of planning in accordance with planning laws.
- Subsidizing preferential credit interest rates, management fees, providing capital for policy banks, off-budget state financial funds, and supporting investments for other policy subjects as decided by the Prime Minister.
3. Principles of public investment management
According to Article 12 of the 2019 Public Investment Law, the principles of managing public investment are as follows:
- Compliance with laws regarding the management and use of public investment funds.
- Alignment with national socio-economic development strategies, the 5-year national socio-economic development plan, and relevant plans according to the planning laws.
- Proper performance of responsibilities and authority by state management agencies, organizations, and individuals involved in managing and using public investment funds.
- Management of public investment funds in accordance with regulations for each funding source; ensuring focused, synchronized, quality, economical, and effective investments with balanced resource allocation; preventing losses and waste.
- Ensuring transparency and openness in public investment activities.
4. State management content on public investment
The content of state management on public investment, as stipulated in Article 13 of the 2019 Public Investment Law, includes:
- Issuing and implementing legal documents on public investment.
- Developing and implementing strategies, programs, plans, solutions, and policies for public investment.
- Monitoring and providing information on the management and use of public investment funds.
- Evaluating the effectiveness of public investment; inspecting, auditing, and supervising the implementation of public investment laws and adherence to investment plans.
- Handling legal violations, resolving complaints, and addressing denunciations related to public investment activities.
- Rewarding agencies, organizations, units, and individuals with achievements in public investment activities.
- International cooperation in public investment.
5. Prohibited acts in public investment
In addition, prohibited acts in public investment are regulated in Article 16 of the 2019 Public Investment Law. These include:
- Strategies, plans, and programs that do not align with investment decision-making, where the source of funds is unclear or unbalanced. Investments made without proper authority, order, or procedures.
- Investment decisions for programs and projects not yet approved by competent authorities or those that do not comply with goals, scope, and budget allocations.
- Abusing positions for personal gain, corruption, or mismanagement in the management and use of public investment funds.
- Collusion between program owners, investors, consultants, and contractors that causes loss or waste of state resources and harms public and community interests.
- Offering, accepting, or mediating bribes.
- Requiring organizations or individuals to invest funds before program or project approval, causing construction debt.
- Using funds for unintended purposes, violating norms or standards.
- Forging or falsifying documents related to investment projects.
- Providing false or misleading reports that affect planning, evaluation, inspection, and legal enforcement related to public investment.
- Willfully destroying, concealing, or misrepresenting relevant documents and evidence.
- Acts that obstruct the discovery of legal violations.
These listed behaviors highlight the importance of public investment in boosting economic growth and development. Therefore, violations, whether intentional or accidental, will be handled according to the law.
In summary, public investment is essential for sustainable economic growth and infrastructure development. Strict management, adherence to legal frameworks, and prevention of violations are necessary to ensure the effectiveness and transparency of public investment activities.
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