VINACHEM

Public debt could reach 60.3% of GDP by the end of the year, according to official figures reported by the Government to the National Assembly Standing Committee.

On the basis of expected State budget deficit and expenditure, experts estimate that public debt is capable of reaching almost 64% of GDP by the end of 2015. Some also assumed that if the State budget had to cover bad debts by State-owned enterprises, public debt would probably exceed the safety threshold of 65% of GDP.

However, recent events visibly show that foreign investors remain confident and continue pouring capital into Vietnam. Investors consider Vietnam to be an attractive and safe investment destination with political and socio-economic stability and, in hand, an ability to control public debt.

Vietnam is more than deserving of this reputation and, if need be, can certainly enact measures to lower the public debt rate relative to GDP.

Specifically, the Government can target revenue worth tens of trillions of VND from taxes, fees, and land use costs that were not fully and promptly paid to the State budget. It is necessary to instill a strong sense of respect of the laws and social responsibilities in businesses and entrepreneurs to ensure the State budget balance.

The Government can also swiftly identify others revenue sources worth trillions of VND that can be obtained from the process of SOEs restructuring, such as equitisation and non-core business divestment. These sources should be affirmed as national assets and need to be counted during budget balancing procedures.

At the same time, it is also necessary to improve the legal system to effectively manage revenue sources to the State budget.

In the fight against corruption, there also exist measures for higher recovery of significant funds through investigation and trials of cases.

Combining a range of measures ─ including ensuring effective operation of the State budget, covering all sources of revenues, and exercising expenditure savings, as well as promoting the role of the State Treasury ─ could help control the budget deficit and keep public debt from exceeding the safety threshold.