Vietnam Outlines Development Investment Sources for 2006-10

Vietnam Outlines Development Investment Sources for 2006-10

Vietnam targets total development investment in 2006-2010 to equal to 37-38 per cent of the country’s gross domestic production (GDP) with 35-40 per cent funds from overseas sources, announced the Vietnamese government recently.

The government expected to obtain total official development assistance (ODA) in the period of US$14-15 billion including US$6-7 billion worth of pledged ODA transferred from the 2001-2005 period. The figure for 2003 was US$2 billion and around US$1.4 billion in 2002.

Foreign direct investment targeted in the 2005-2010 period is around US$18 billion, according to the government’s scheme on mobilizing funds for social and economic investment in the next five-year term.

Officials from the Ministry of Finance (MoF) also expected to raise US$4-5 billion in the period via some indirect sources such as issuing bonds and shares abroad and borrowing from other mid- and long-term sources.

Regarding domestic capital, according to the Deputy Finance Minister Tran Van Ta, it will account for 60-65 per cent of total development investment in the 2006-2010.

State budget revenues will make up around 22 per cent of GDP (21 per cent GDP from taxes) while state budget spending will equal to 26-27 per cent GDP, meaning that Vietnam will face a deficit of not over 5 per cent GDP. Around 30 per cent state budget spending will be for development investment, 54-56 per cent for regular expenditures and 16-17 per cent for foreign debt payments.

With the scenario, MoF hopes to control national debts below 50 per cent GDP and foreign debt payment below 20 per cent total export revenues annually.

The government’s plan also showed that real consumption per capita would rise 5.5 per cent/year, compared with annual population growth of 1.2 per cent, helping double GDP per capita in 2010 against 2000.
(Investment)