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Hồ Chí Minh City has achieved robust economic growth, yet its sluggish public investment disbursement remains a significant limitation. This slow disbursement weakens the effectiveness of growth stimulus policies, wastes development opportunities, and undermines investor confidence.

In 2025, Hồ Chí Minh City emerged as an economic bright spot with a GDP growth rate of 8.03%. This impressive figure has helped “enhance the attractiveness of HCMC, drawing major domestic and foreign investors to explore, invest, and expand their operations in the area.” [1]

Despite this growth, a persistent and concerning paradox remains. The city is allocated and capable of mobilizing massive volumes of public investment capital, but its disbursement rate reached only about 70% of the planned level in 2025.

The phenomenon of “having capital but being unable to spend it” extends beyond technical budget management issues. It exposes deeper bottlenecks in institutional frameworks, governance capacity, and a pervasive fear of accountability within the public administration of Việt Nam’s largest city.

When Public Investment Becomes a Test of Institutions

As the government identifies public investment as a key driver for sustaining growth, unlocking resources , stabilizing the macroeconomy, and activating private investment, Hồ Chí Minh City’s slow disbursement carries implications beyond the local level. [2]

According to directives from the Prime Minister, 2025 is a pivotal year , requiring ministries, sectors, and localities to strive to disburse nearly all allocated capital to create momentum for high growth targets in 2026 and the years that follow. [3]

Because the city serves as the economic engine of Việt Nam, every percentage point of delayed disbursement reduces the effectiveness of fiscal policy and creates negative ripple effects across the Southeast region and national supply chains.

What Are the Causes?

The primary cause of sluggish disbursement relates to overlapping and shifting legal frameworks. In 2025, the implementation of an amended Law on Public Investment , alongside new decrees and guiding circulars, aimed to enhance transparency and fiscal discipline. [4]

However, these adjustments have inadvertently lengthened project preparation timelines in the short term.

Many projects in Hồ Chí Minh City face delays from the very beginning. During the planning, appraisal, and approval stages, agencies and project owners must “learn by doing” to ensure strict regulatory compliance.

The Hồ Chí Minh City Inspectorate's Inspection Conclusion No. 69/KL-TTTP-P6, dated Sept. 20, 2025, indicates that numerous projects have experienced prolonged timelines, posing a risk of budget losses. [5]

This causes a chain reaction in which the first delays don't leave enough time for the next steps to fully disburse funds within the fiscal year.

Land clearance presents another long-standing bottleneck. In Hồ Chí Minh City, high land prices mean economic interests are tied to every square meter, making land acquisition, compensation, and resettlement incredibly complex.

Even with full funding allocated, many key infrastructure projects remain stalled simply because contractors have not received cleared land.

City leaders agree that fixing land clearance would help Hồ Chí Minh City spend money faster and grow economically, but solving this problem needs good management, teamwork at different levels, and effective resettlement plans, not just money. [6]

Beyond these technical and institutional hurdles, a deep-seated fear of accountability and limited management capacity plague the city.

Because public investment faces strict oversight from inspectors, auditors, and anti-corruption agencies, tightening administrative discipline prompts many officials to choose the safest route: avoiding mistakes over acting efficiently.

Particularly in large, complex projects, this fear of accountability leads to delayed decision-making, the passing of responsibilities , and endless waiting for direction from higher levels. [7] Over time, this risk-averse mindset threatens to paralyze the city’s entire administrative machinery.

What Are the Consequences?

Primarily, sluggish disbursement diminishes the effectiveness of economic stimulus policies that rely on public investment. While infrastructure projects in transport, logistics, urban renewal, and flood control is intended to drive growth and improve living standards, persistent delays in these initiatives inevitably stunt the overall development of the city.

Furthermore, these delays send negative signals to both the private sector and foreign investors. The ability to execute public investment serves as a crucial indicator of institutional quality and the reliability of local authorities, which directly influences long-term investment decisions.

However, research by the World Bank indicates that “the restructuring of public investment in Việt Nam has been slow and has mainly focused on reorganizing fragmented investment portfolios rather than substantially improving implementation efficiency.” [8]

Finally, failing to inject capital into the economy at the optimal time results in missed growth opportunities. This is particularly detrimental as Việt Nam currently faces intense competition to capture shifting global investment flows.

The Challenge for 2026

In response to these ongoing delays, the leadership of Hồ Chí Minh City has pledged to prepare earlier and act more decisively regarding the 2026 public investment plan. They aim to improve both disbursement rates and overall investment quality. With public investment serving as a main pillar, the city targets an ambitious growth rate of over 10% in 2026. [9]

The feasibility of this goal, however, relies entirely on substantially addressing existing bottlenecks.

To escape the persistent cycle of “high capital allocation – low disbursement,” city leaders must transition from a mindset of risk-avoidance to one of effective governance.

Rather than loosening discipline or compromising transparency, the city must design mechanisms that protect and incentivize officials who are willing to take responsibility and make decisions in the public interest.

Simultaneously, Hồ Chí Minh City must continue simplifying and digitizing public investment procedures to reduce unnecessary intermediary steps and improve departmental coordination.

Successful municipalities often rely on strong coordination mechanisms that tie clear authority and accountability directly to outcomes.

Finally, rather than spreading resources too thin across numerous simultaneous projects, Hồ Chí Minh City must identify infrastructure initiatives with high spillover effects.

Prioritizing funding for projects that generate the greatest socio-economic value is crucial; in a landscape of limited resources, prioritization and efficiency matter just as much as the scale of investment.

***

Ultimately, the paradox of slow disbursement in Hồ Chí Minh City transcends simple budgetary concerns; it serves as a test of urban governance capacity during a new phase of development.

If the city successfully transforms 2026 into a pivotal year for enhancing public investment efficiency, it will solidify its status as the nation's economic engine and offer a viable governance model for other localities. Conversely, ignoring these existing bottlenecks will lead to severe consequences.

The cost will be evident in perpetually low disbursement figures, as well as in the gradual erosion of the competitive advantages that make the city the most dynamic urban center in Việt Nam.

Đỗ Minh Thái wrote this article in Vietnamese and published it in Luật Khoa Magazine on Jan. 14, 2026. Đàm Vĩnh Hằng translated it into English for The Vietnamese Magazine.

References: +

Hiếu, M. (2026, January 6). TPHCM thừa vốn nhưng giải ngân chậm, chỉ đạt khoảng 70% năm 2025. Kinh tế Sài Gòn . https://thesaigontimes.vn/tphcm-thua-von-nhung-giai-ngan-cham-chi-dat-khoang-70-nam-2025/

Nguyên, N. (2025, December 29). Đầu tư công năm 2025: “Vốn mồi” khơi thông nguồn lực. VOV Giao thông . https://vovgiaothong.vn/newsaudio/dau-tu-cong-nam-2025-von-moi-khoi-thong-nguon-luc-d49554.html

Anh, T. (2025, November 10). Giải ngân vốn đầu tư công: Quyết liệt tháo gỡ vướng mắc, tăng tốc về đích. Báo Kiểm toán . http://baokiemtoan.vn/giai-ngan-von-dau-tu-cong-quyet-liet-thao-go-vuong-mac-tang-toc-ve-dich-44239.html

Luật Đầu tư công sửa đổi . (2025). Luật Việt Nam . https://luatvietnam.vn/dau-tu/luat-dau-tu-2025-so-143-2025-qh15-422585-d1.html

Nghĩa, M. (2025, November 1). Thanh tra TP HCM kết luận 7 dự án chậm tiến độ, kéo dài, nguy cơ thất thoát ngân sách. Thanh Tra . https://thanhtra.com.vn/ket-luan-thanh-tra-E17BD7A25/thanh-tra-tp-hcm-ket-luan-7-du-an-cham-tien-do-keo-dai-nguy-co-that-thoat-ngan-sach-fd59e0e26.html

Lê, T. (2026, January 7). TP.HCM đặt mục tiêu tăng trưởng 10%. Tuổi Trẻ Online . https://tuoitre.vn/tp-hcm-dat-muc-tieu-tang-truong-10-20260107081348997.htm

Văn, H. (2025, December 24). TP.HCM: Thay thế kịp thời cán bộ yếu kém, xử lý nghiêm tiêu cực để tăng tốc giải ngân đầu tư công. Dân Việt . https://danviet.vn/tphcm-thay-the-kip-thoi-can-bo-yeu-kem-xu-ly-nghiem-tieu-cuc-de-tang-toc-giai-ngan-dau-tu-cong-d1389799.html

World Bank Group. (2019, June 3). Public investment management in Vietnam : assessment and reform priorities for overcoming the bottlenecks. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/732391559571081907

Lê, T. (2026, January 6). TP.HCM được kỳ vọng tăng trưởng cao năm 2026 nhờ xu thế ‘đi tắt, đón đầu’, ‘đi trước, về trước’. Tuổi Trẻ Online . https://tuoitre.vn/tp-hcm-duoc-ky-vong-tang-truong-cao-nam-2026-nho-xu-the-di-tat-don-dau-di-truoc-ve-truoc-20260106172311357.htm

‘Excess Capital, Slow Disbursement’: The Development Paradox of Hồ Chí Minh City in 2026

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