Comments on the draft documents of the 14th National Party Congress: To make public investment truly become a driving force for economic growth

The draft documents of the 14th Party Congress clearly identify the need to create strong breakthroughs in mechanisms and policies to improve the quality and efficiency of public investment, considering this a key orientation to ensure sustainable growth and promote development model transformation.

Practice shows that to achieve the target of high growth in the coming years, investment, in which public investment plays a very important role. (Source: VGP)

According to the draft Political Report of the 13th Party Central Committee presented to the 14th National Congress, in terms of economy, the Draft sets the target of average GDP growth in the 2026-2030 period from 10%/year or more, GDP per capita by 2030 reaching about 8,500 USD, digital economy accounting for 30% of GDP and public investment accounting for about 20-22% of total social investment capital.

Indicators on productivity, industry structure, accumulation and consumption all emphasize the need to effectively use public resources, considering public investment as the foundation and driving force for the private sector, for innovation and for sustainable growth.

In an article contributing comments to the Draft Political Report of the 13th Party Central Committee, Dr. Le Duy Binh, Director of Economica Vietnam, pointed out that practice shows that to achieve the high growth target in the coming years, investment, in which public investment plays a very important role.

Dr. Le Duy Binh believes that public investment needs to be oriented in a more selective and effective direction, playing the role of "seed capital" for the private sector and driving force for innovation in the new development stage.

Accordingly, in any economy , although the proportion may be different, public investment is a key component of aggregate demand. In each country, there are different ways for public investment to demonstrate its role as a growth driver.

For Vietnam, the more important question is how public investment can contribute effectively and sustainably to the goal of high growth in the era of national development.

For public investment to truly become a growth driver, Dr. Le Duy Binh said, it is necessary to clearly recognize three key groups of issues.

Firstly, the economy is requiring a strong transformation in essential infrastructure, forming a material basis for growth and expanding growth space.

Infrastructure for transport, technology, telecommunications, along with energy infrastructure, water infrastructure, education , training, and provision of basic social services play an extremely necessary role in the transition to a new growth model, relying more on technology, digital transformation, or innovation.

In addition to expanding growth space, each extended road, seaport, and airport built or upgraded will simultaneously expand the market, increase connectivity between domestic and foreign markets, and reduce logistics costs...

Investing in basic social services such as education, health care, and the environment not only improves the quality of growth, ensuring that people benefit from growth, but also improves the quality of human resources for the new growth process.

Second, public investment must stimulate private investment by creating a foundation for private investment, becoming seed capital for private investment, improving the investment environment, and encouraging private investment alongside public investment through public-private partnerships and other forms.

According to statistics, a 1% increase in private investment will bring about an absolute value equivalent to a 2.5% increase in public investment and a 3.5% increase in foreign direct investment (FDI). The pivotal role of public investment in Vietnam's economy in the upcoming development period is reflected in many different aspects like that.

The economy is requiring a strong transformation in essential infrastructure, forming a material basis for growth and expanding growth space. (Photo: VH)

Third, public investment needs to be closely linked to the low productivity, quality, efficiency and competitiveness targets of the economy, improving the ICOR index and requiring innovation in the growth model associated with economic restructuring, in order to turn science, technology and innovation into the main driving force.

Dr. Le Duy Binh emphasized: "Thus, the new economy can avoid the situation where growth still relies mainly on capital and labor, and allow the Vietnamese economy to shift to in-depth growth, avoiding the risk of getting stuck in the middle-income trap."

Public investment must increase in quantity and proportion, but must also ensure harmony so as not to put great pressure on fiscal balance and avoid the phenomenon of "crowding out" private capital.

To increase public investment or regular expenditure, it will be necessary to increase regular budget revenue, creating pressure and additional burden for businesses and people and possibly reducing investment and consumer demand.

At the same time, it is necessary to consider in the context of harmony with other factors of aggregate demand and other macroeconomic factors of the economy to suit the context, structure and goals of the Vietnamese economy.

At the same time, it is necessary to focus on large, central, key projects, projects that turn the situation around or create major breakthroughs in science and technology, expand growth space, and create an important foundation for future socio-economic development.

Source: https://baoquocte.vn/gop-y-du-thao-van-kien-dai-hoi-xiv-cua-dang-de-dau-tu-cong-thuc-su-tro-thanh-dong-luc-tang-truong-kinh-te-334197.html