Specific mechanisms create new impulse for growth: city chairman

HCMC has proposed specific mechanisms to create a new impulse for economic growth amid slowing down Gross Regional Domestic Product (GRDP), said chairman of the city People’s Committee Nguyen Thanh Phong yesterday.
Chairman of HCMC People’s Committee Nguyen Thanh Phong
Chairman of HCMC People’s Committee Nguyen Thanh Phong

Talking to reporters on the side line of the National Assembly’s session, Mr. Phong said that in 2017 the Government assigns HCMC to get the budget revenue of VND347 trillion (US$15.28 billion). The city has attempted to implement the mission but met with many difficulties especially in domestic revenues.

GRDP growth rate reached 9.6 percent in the phase of 2010-2016, reducing to 8.05 percent since 2016. This year, HCMC strives to obtain the target of 8.4 percent but it has been unobtainable.

The city has been seeking solutions to obtain the set targets still it has been difficult. So it has proposed specific mechanisms to create a new impulse to boost growth.

Previously, the city was permitted to keep 23 percent of its budget revenue but the ratio has dropped to only 18 percent. Of these, 35 percent has been spent on basic construction so the city has taken the initiative in mobilizing other resources, improving investment policies and environment.

The city has been seeking every possible resources especially land which exploitation has been toward publicity and transparency. If the legal corridor is advantageous, it will create a firm basis and motivation for the city to move up. HCMC will strive to improve mechanisms to lure foreign investors and take the initiative in looking for investment methods to develop.

In reply to reporters’ queries that whether the cut in the budget revenue ratio which HCMC can keep has reduced the city's growth rate, Mr. Phong said that was just a part of issue besides other factors which the city has reported to the National Assembly.

At present 35 percent of the 18 percent budget revenue leaving for HCMC is spent on basic construction. Calling for foreign investment such as official development assistance (ODA) source, the city must have reciprocal capital.

Implementation of public private partnership (PPP) projects requires to have seed capital. For instance, one dong from the city budget will lure 14 dongs from the society.

Because the 18 percent ratio has been decided by the NA in mid-term capital plan, it is unchangeable. If there are specific mechanisms, the city will be able to mobilize other resources outside the budget. At that time, GRDP scale will increase and the city’s contribution ratio to the central budget will be bigger.

Taking about income increase for public servants, cadres and officials in HCMC, Mr. Phong said that ceiling wages must be ensured like other localities in the country.

If the city’s efforts increase budget revenue, the People’s Council will propose specific wage levels to the People’s Council. There have been opinions that wage increase will not be much meaning if consumer prices continue moving up.

According to Mr. Phong, the city is responsible for managing prices and prevent them from excessively hiking and affecting residents’ lives.

If the NA approves specific mechanisms, the city will urgently build specific projects, collect residents’ opinions and those who will be strongly impacted from the mechanisms to create the highest consensus before improving the mechanisms as per regulations and reporting to the Government and the NA Standing Committee to decide.

Tax and fee increase or decrease will be carefully calculated to create fairness in using resources, infrastructures and attract investors and stimulate demand.