What are the principles of formulation of mid-term and annual public investment plans in Vietnam?

Hello, The Editorial Board would like to answer as follows:

1. What are the regulations on the classification of public investment plans in Vietnam?

According to the provisions of Article 46 of the Law on Public Investment 2019, public investment plans are classified as follows:

- Public investment plans shall be classified by the planned time limits, including:

+ Mid-term public investment plan that must be valid for the period of 05 years and must be in line with the 5-year socio-economic development plan;

+ Annual public investment plan that must be made to support the implementation of the mid-term public investment plan and must fit into objectives of the annual socio-economic development plan and the annual public investment budget balance.

- Public investment plans shall be classified by levels of regulatory authority, including:

+ National public investment plan;

+ Public investment plans of Ministries and central regulatory authorities;

+ Public investment plans of local authorities at any level.

- Public investment plans shall be classified by funding sources, including:

+ Plan for investment of the central budget funds, including investments specific to sectors, industries, public investment programs and portions of state capital participation in projects in the public-private partnership form, subject to law on state budget;

+ Plan for investment of the local budget’s funds, including investments specific to sectors, industries, public investment programs and portions of state capital participation in projects in the public-private partnership form, subject to law on state budget;

+ Plan for investment of legitimate revenues that state regulatory authorities and public service units retain for investment purposes.

Thus, Public investment plans shall be classified as follows:

- Public investment plans shall be classified by the planned time limits

- Public investment plans shall be classified by levels of regulatory authority

- Public investment plans shall be classified by funding sources

Each type of public investment plan will have a certain importance in orienting, forecasting, allocating, and organizing the implementation of public investment projects consistent with the goals of the socio-economic development plan and the effective use of investment capital.

2. What are the principles of formulation of mid-term and annual public investment plans in Vietnam?

According to Article 48 of the Law on Public Investment 2019, the principles of formulation of mid-term and annual public investment plans include:

- Agree with developmental objectives included in the socio-economic development strategy, 5-year and annual national, sector-specific, industry-specific or local socio-economic development and other approved plans, 5-year financial plan, and 5-year borrowing and public debt repayment plan.

- Correspond to capabilities of balancing public investment funds and calling for different investment capital from other economic sectors; ensure macroeconomic balance and prioritization of public debt safety.

- Distribution of public investment capital must adhere to principles, criteria and norms of distribution of public investment capital in specific stages that have already been approved by competent authorities.

- Prefer to distribute funds to sectors, industries or territorial areas by taking account of developmental objectives and guidelines existing over periods of time.

- Ensure public disclosure, transparency and fairness.

- Make sure that managerial activities must be performed in a concentrated and consistent manner in terms of objectives, regulations and policies; ensure that investment management powers are decentralized and autonomy is granted to Ministries, central and local regulatory authorities in accordance with laws in order to enhance investment efficiency.

- Annual public investment plan must be consistent with the approved midterm public investment plan.

Thus, the principles of mid-term public investment plans based on factors such as compatibility with development goals in the socio-economic development strategy, balancing public investment capital and capital sources from other economic sectors, and prioritizing the allocation of investment capital appropriate to each stage have been oriented and approved by competent authorities. At the same time, it is necessary to ensure openness, transparency, and fairness when implementing public investment plans.

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