Eagle eyes on giants’ spending

The government will strictly manage state-run giants’ state budget-sourced investment spending during 2010.

The National Assembly Finance and Budget Committee said that next year, the Ministry of Finance (MoF) would likely earmark as much as VND5 trillion ($284 million) for state-run groups and corporations.

“Though state budget expenditure for groups and corporations will not be so remarkable, the government will still have to strictly revise such expenditure. All improper expenditure, though negligible, will be cut down,” said committee chairman Phung Quoc Hien.

The committee’s report said that in 2010, amid the world’s slow economic recovery, Vietnam’s economy would continue to face difficulties. “Thus, the government will not stimulate the economy in an even manner. All resources will be concentrated on restructuring the economy quantitatively,” it said.

Hien said the MoF would earmark VND3.5 trillion ($199 million) for PetroVietnam, VND28 billion ($1.6 million) for Vinacomin, VND60 billion ($3.4 million) for VNPT, VND10 billion ($568,000) for Vinatex and VND54 billion ($3 million) for Vinalines. The committee, however, proposed the funds must be used to fulfil special mandates assigned to the groups and corporations.

“As for the remaining tasks that need expenditure, the groups and corporations will have to use their own capital earned from production and annual after-tax profits,” the report stated. Hien said: “For example, many groups and corporations have established their own vocational schools and centres to service their workers and factories. Thus, they have to use their own capital to build such projects.”

He said projects that did not fall within a group’s business scope, but were assigned by the government, would receive state funds. “For example, if Electricity of Vietnam builds an electricity system at remote areas as assigned by the government, the group will be given capital,” Hien said.

However, a National Assembly delegate from Hung Yen province Vu Quang Hai said that without the government’s support, groups and corporations would not be interested in investing in education, training, health care and social welfare.

Hien replied: “If we use the state budget in such a way, they will always rely on the state budget. Moreover, this type of investment will cause inequality among units provided with state budget capital and units who are not.”