$5 Billion Wrongly Spent Each Year: Where Has The Money Gone?

VietNamNet Bridge - The Government Inspectors’ conclusion that $5 billion worth of state’s money is “wrongly spent”’ a year has stirred up the public, reported Dat Viet.

Vietnam needs huge capital for infrastructure development

“$5 billion means 2-3 percent of Vietnam’s annual GDP ($200 billion). This is an unacceptably high level,” said Nguyen Van Ngai from the HCM City Agriculture & Forestry University.

He noted that this is the official figure released by the Government’s Inspector and he is not sure if there are unreported figures.

“I am afraid that if taking unreported figures into consideration, the real figure would be even higher,” he said.

Dinh The Hien, an economist, said it is necessary to clarify what “wrongly spent” means. 

“Does ‘wrongly spent’ include expense items which don’t come in line with the laws, ineffective expense items and expenses in embezzlement cases? If yes, the ‘wrongly spent’ amount could be up to 30 percent of the nation’s total budget, not 10 percent as reported,” Hien said.

The economist went on to say that when the late Prime Minister Phan Van Khai was in office, the inappropriate spending was recognized. At that time, Khai said three out of every 10 dong spent on infrastructure was lost because of embezzlement.

Ngai pointed out that infrastructure development and land management are fields where the state’s money is lost the most.

“The loss of money and misspending occurred in nearly all projects and the figures must not be small,” Ngai said, citing sources reporting that the money loss could be up to 30 percent of the total value of projects.

One of the typical examples of ‘wrong spending’ is the project on upgrading the road section from Km 123+105 to Km 268 on Highway No 20 implemented by Thai Son Investment Development.

The amount of money approved to be spent on site clearance was VND459 billion. However, only VND32 billion was spent in reality.

Ngai said the overspending has been high for many years, around 5-6 percent of GDP, higher than the safety level of 3 percent.

Why did the overspending continue to increase while the budget collections dropped because of the GDP decline in 2007-2017.

Another question is whether the misspent money went to individuals’ pockets. If so, this has serious consequences for the national economy.

And why does the excessive spending still occur despite the presence of so many agencies and organizations which act as supervisors?

US$1=VND22,000

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