Vietnam Bans Fund-Raising In Non-Urgent Devt Projs Until End-08

Vietnamese Prime Minister Nguyen Tan Dung has ordered all provinces not to raise funds between now and the end of the year for investment in new and non-urgent infrastructure projects, the government said Friday on its Web site.

"The provinces won't be allowed to mobilize investment funds, bank loans, or bonds to raise funds for their non-urgent local infrastructure projects until the end of 2008," said the government in a statement.

A Ministry of Finance official said the government is reducing spending nationwide because it wants to effectively control inflation, which recorded a 21.4% rise on year in April.

"Only important projects will continue to receive full financial support for the rest of this year," said the official with the department of local finance.

The government didn't give financial details for its austerity measures, but according to state media, the move will lead to a reduction in scale of 5,470 ongoing projects, or more than a fifth of total projects in the country.

The prime minister said earlier this month that the government should slash expenditure by 10% this year. The cutback works out to be about VND22 trillion ( $1.38 billion), analysts said. (Dow Jones)