“GDP growth is forecast to rise slightly to 5.6 percent in 2014, picking up further to 5.8 percent in 2015, the Asian Development Bank said in its Asian Development Outlook (ADO) 2014, recently released in Hanoi.
According to ADO 2014, the creation of a level playing field for investment projects in the form of public - private partnership (PPP) is a key factor leading to improve the quality and comprehensiveness of public services provision, which means that the Government needs to improve the regulatory framework for PPP to attract private investment for infrastructure development and public services, thus helping people with easier access to services at more reasonable prices.
According to the report, Vietnam’s GDP growth is forecast to rise slightly to 5.6 percent in 2014, picking up further to 5.8 percent in 2015 with economic recovery in the US and the euro area and as progress is made in addressing domestic banking sector weaknesses. Inflation is expected to average 6.2 percent in 2014, assuming reasonably stable food production, moderate policy stimulation, and only slight depreciation of the dong. Inflation is forecast to average 6.6 percent in 2015 as economic activity picks up.
According to Mr Tomoyuki Kimura, ADB Country Director for Vietnam, economic growth will follow a positive trend thanks to several measures taken by the Government to mitigate vulnerabilities in the banking sector, including the purchase of significant volumes of bad debts by the Vietnam Asset Management Company (VAMC), and the adoption of new loan classification and provision standards that are closer to international norms.
Accelerating progress on resolving NPLs is likely to require setting firm targets and timelines for closing the gap between national and international standards, he said.
He noted that Vietnam has to face a long-term challenge, specifically improving infrastructure quality. Attracting private investment in infrastructure, mainly through public private partnership, could substantially contribute to funding projects but also help gain access to international expertise and technology that improves efficiency and service delivery.
ADO 2014 also mentioned the possibility that PPP investment methods will be considered effective for material and social infrastructure construction. So far, however, private investment in infrastructure has been very limited. Moreover, the favoured PPP structure departs from standard international practice and most such projects have not been awarded through competitive bidding. The report spoke highly of the Government’s efforts to build a regulatory framework for private investors to take part in infrastructure construction programmes and facilitate PPP transactions.
“Attracting private investment in infrastructure, mainly through PPP, could substantially contribute to funding projects but also help gain access to international expertise and technology that improves efficiency and service delivery, said Kimura. “A solid regulatory framework for PPP is likely to enhance the comprehensiveness and quality of public services delivery."
Quynh Anh
Vietnamese
