Fund Availability Invigorates New Countryside

10:02:16 AM | 7/15/2019

Vietnam had 4,402 communes (49.38% of total communes) and 76 district-level units in 34 provinces and cities certified as new countryside areas by the Prime Minister. On average, a commune achieves 15.26 criteria and no commune has less than five criteria.

Clearing overdue debts in basic construction

One effective solution to help achieve important results of the National Target Program for New Countryside Construction is mobilizing social resources for the program. In the 2011 - 2015 period, despite tough national economic conditions and limited budget, the government still gave priority to increasing investment resources for the National Target Program for New Countryside Construction. In five years, the country mobilized VND851,380 billion (US$37 billion) for the program.

In only three years (from 2016 to 2018) of the second phase, total mobilized funding for new countryside construction was over VND900,493 billion (US$39 billion), exceeding the 5-years first phase. Many localities mobilized and encouraged cement, stone, sand and gravel producers to support infrastructure construction materials and raised nearly VND56,800 billion (US$2.4 billion) from local communities and residents.

In 2019, Vietnam hoped to raise about VND367,856 billion (US$1.6 billion) from various resources for the National Target Program for New Countryside Construction, thus bringing the total fund for this purpose to VND1,270 trillion (US$54 billion) in four years (from 2016 to 2019) of the second phase, 50% higher than the value in the five-year phase. Of the sum, the government allocated VND173.6 trillion (US$7.45 billion) for the program.

Mr. Tran Thanh Nam, Deputy Minister of Agriculture and Rural Development, said, resource mobilization has helped speed up the progress of the National Target Program for New Countryside Construction beyond the target of the National Assembly, thus raising the quality of the program and addressing some limitations in the 2011-2015 phase, particularly overdue debts in basic construction. In addition, the second phase resource allocation mechanism has also changed significantly, with prioritized resources allocated to difficult communes which may receive 4-5 times more than others. As a result, the country has managed to ensure all communes meet at least five criteria and drastically reduce communes completing less than 10 criteria. The planning and investment sector has advised the Prime Minister to allot medium-term capital for all five years. This helps these localities actively balance resources, giving priority and support to key projects. For that reason, essential infrastructure works in communes and villages are soon completed and put into use to improve the outcome of capital use.

Mr. Nguyen Van Hieu, Deputy Minister of Planning and Investment, said at the review conference on joint emulation campaigns of the planning and investment sector and the statistics sector for new countryside construction in 2011-2020 that the Ministry of Planning and Investment advised the Government to put forth a lot of resolutions on specific mechanism for investment capital management and use for the National Target Program for New Countryside Construction to the National Assembly for approval and promulgation, thus helping change local passive thinking and adding more flexible investment mechanisms. The ministry has also issued many circulars encouraging businesses to invest in new countryside construction and, at the same time, formulated mechanisms to supplement short investment capital or mechanisms on uncompensated land donation. By adopting joint actions between the government and the populace, the state fund accounts for only 50-60% of ordinary practices.

Fund source diversification

In four years (from 2016 to 2019), the total budget for new countryside construction is VND1,270 trillion (US$54 billion), 50% higher than the value in the five-year phase. This better than expected outcome is hoped to lead the new countryside program to the finish line soon.

In mobilizing and using capital, there are still shortcomings and limitations: Resources for new countryside construction in the past mainly relied on public investment and credit sources. The engagement of enterprises is still limited. The directed and administered use of capital by some localities is still ineffective, leading to slowing disbursements, especially in 2019. Therefore, building institutions and support policies support, improving the favorable business and investment environment, creating fair and transparent competition, and improving mechanisms and policies to boost innovative entrepreneurial ecosystems in agriculture are important solutions.

Last but not least, mobilizing maximum State and social investment resources for infrastructure system construction in remote areas, narrowing the regional gap; building mechanisms to ensure funds for maintaining built works; developing business-led agricultural value chains and making enterprises a driving force of modern agricultural development and higher added value for producers are all key solutions.

Minh Ngoc