CATEGORIES

© Copyright 2004; Hanoitimes - Economic and Urban Newspaper;

The tribune of Hanoi People’s Committee

Publication Permit: 29/GP-CBC

Editor - in - Chief: Nguyen Thanh Loi

Managing Editor: Ta Thu Giang

Email : thugiang@hanoitimes.vn

Head Office: 21 Huynh Thuc Khang Street, Dong Da District, Hanoi

Branch Office: 221 Tran Phu Street, Ha Dong District, Hanoi

WORDS ON THE STREET 70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Construction
High ICOR should not be seen as result of inefficient public investment: Deputy PM
Nguyen Tung 10:36, 2019/01/07
The ratio of public investment to total social investment has been decreasing, while those of the private and foreign-invested sectors are increasing.
An increase in the incremental capital-output ratio (ICOR) should not be seen as a result of inefficient public investment, according to Deputy Prime Minister Vuong Dinh Hue. 
 
Illustrative photo.
Illustrative photo.
Public investment is mainly focused on infrastructure development, which facilitates growth indirectly instead of producing immediate result, Hue said in a response to National Assembly deputy Thach Phuong Binh from Tra Vinh province. 

ICOR is used as a measure of the inefficiency with which capital is used. The higher the ICOR, the lower the productivity of capital or the marginal efficiency of capital. 

In his enquiry, Binh expressed concern over the low efficiency of public investment, as the ICOR increased from 3.5 in the 1991 – 1995 period to 6.15 in 2007 – 2008. The ratio once soared to 8 in 2009 and declined to 6.21 in 2018, however, is still higher than the World Bank’s recommendable level.

Comparing to regional countries, Vietnam’s ICOR is nearly double the average, indicating the efficiency of public investment is less than half of others, Binh continued. 

According to Deputy PM Vuong Dinh Hue, the socio-economic impact of public investment has improved substantially in the 2011 – 2015 period, and Vietnam’s ICOR has been gradually decreasing. 

Hue said ICOR is often measured in phases and depends on numerous factors, including changes in technologies and the proportion of labor and capital being used. 

Vietnam’s ICOR takes into account public investment, state-run corporations’ investment, investment from the private and foreign-invested sectors, Hue added. 

Over the past few years, the government has stepped up efforts to improve efficiency in public investment in a bid to reduce the ICOR. Evidently, the ratio of public investment to total social investment has been decreasing, while those of the private and foreign-invested sectors are increasing, he stressed. 

In the future, Hue expected public investment would be concentrated on priority projects with significant impacts on Vietnam’s socio-economic development. 
Comments
Other news
18:30, 2024/11/13
New supply to boost Hanoi retail property market
Hanoi's retail property market continues to show strong growth potential.
11:35, 2024/11/07
Vietnam, China cross-border railway project to start construction in 2025
The project will serve as a vital railway link between Vietnam and China, advancing the Belt and Road Initiative.
20:56, 2024/11/04
Hanoi approves 14 residential projects amid market challenges
The fourth quarter would see increasing supply of new apartments, with around 9,700 units to get launched.
11:34, 2024/10/26
Prime Minister urges quick construction of National Exhibition Center
Once completed, the center is expected to be a venue for major international and regional events.
20:37, 2024/10/16
Hoa Lac Park aims to become “a high-tech hub”
The Hoa Lac Hi-tech Park is being built as an open model and will serve as the core for the transformation of Hanoi into the country's leading hub for innovation.
21:22, 2024/10/01
Hanoi to build a new biotech high-tech park
The HaBiotech is designed to engage in high-tech activities that align with global trends and Vietnam's strategic policies for high-tech development, with a particular focus on biotechnology.