Bases for formulation of mid-term and annual public investment plans in Vietnam

Bases for formulation of mid-term and annual public investment plans in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Regulations on mid-term and annual public investment plans in Vietnam

According to Clause 1, Article 46 of the Law on Public Investment 2019, the 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.

2. Bases for formulation of mid-term and annual public investment plans in Vietnam

The bases for formulation of mid-term and annual public investment plans in Vietnam according to Article 47 of the Law on Public Investment 2019, are as follows:

- Midterm public investment plan shall be formulated on the following bases:

+ Current conditions and outcomes of implementation of the 5-year socio-economic development plan and the midterm public investment plan developed in the previous stage;

+ Socio-economic development strategy; national, sector-specific, industry-specific and local 5-year socio-economic development plans; 5-year financial plan; 5-year borrowing and public debt repayment plans; preferred investment objectives included in 5-year national, sector-specific, industry-specific and local public investment plans;

+ Related planning scheme provided for in law on planning;

+ Demands for and forecast of capabilities of mobilization of funding sources invested in construction of socio-economic infrastructure and of balancing the state budget’s capital;

+ Forecast of impacts of global and domestic situations on development and capabilities of mobilization of investment funds;

+ Regulatory and policy framework on calling for investment funds from different economic sectors for the purposes of construction of socio-economic infrastructure.

- Annual public investment plan shall be formulated on the following bases:

+ Review of progress in and outcomes of implementation of national, sector-specific, industry-specific and local socio-economic development plans; outcomes of implementation of the previous-year public investment plan;

+ Annual socio-economic development plan;

+ Midterm public investment plan;

+ Demands for and capabilities of balancing resources for the purposes of investing in construction of socio-economic infrastructure in the plan year.

3. 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 rinciples of formulation of mid-term and annual public investment plans are as follows:

- 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.

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