Plans to use development aid more efficiently

Jun 9th at 14:09

09-06-2012 14:09:48+07:00

Vietnam is making a great effort to accelerate disbursement and make efficient use of Official Development Assistance (ODA) during a time of recession, according to foreign and local economists.

Speaking to Dau Tu (Investment) newspaper, Cao Viet Sinh, the deputy minister of Planning and Investment, said the disbursement of capital sources, particularly from the State Budget, government bonds, national target programmes, foreign direct investment and ODA, would improve aggregate demand, reduce inventories and stimulate economic growth.

According to the investment ministry’s latest report, ODA capital disbursed in 2011 was at the very high level of $3.65 billion.

Vietnam and donors believe that 2012 would be a breakthrough year in the disbursement of ODA capital.

In the first five months of the year, the country disbursed $1.72 billion worth of ODA, a year-on-year increase of 43 per cent. That included $1.57 billion in loans and $159 billion in non-refundable aid, he said.

Sinh, however, admitted that disbursed ODA capital in Vietnam was still lower than the global average.

The ODA capital from the Asian Development Bank (ADB) that was disbursed by regional countries was 23 per cent on average, while the rate in Vietnam was only 16 per cent.

As a result, billions of US dollars that ADB has given Vietnam over the years had not been disbursed because the country was unable to meet certain conditions.

Vietnam is now settling difficulties, including land clearance, matching capital and project management, that are believed to be obstacles to disbursement and effective use of ODA capital, according to Sinh.

Among the measures, the government has issued documents on attracting, managing and using ODA and other preferential loans for the 2011-2015 period.

It has made adjustments to Decree No. 131/2006/ND-CP on the management and use of ODA, all of which are aimed to simplify procedures related to disbursement and effectively use this capital.

Hoang Viet Khang, director of the Foreign Economic Relations Department, said, under these measures, ODA capital would be used to support the implementation of targets included in the socio-economic development strategy from 2011 to 2015.

“These precious capital sources will also be used for the construction of infrastructure to serve industrialisation and modernisation through 2020, as well as implementation of other national programmes from 2011 to 2015,” Khang said.

Projects to build international airports, deepwater ports, express highways and electricity supply and generation systems will be given top priority for ODA capital and preferential loans.

In an interview with Dau Tu newspaper, the Japanese Ambassador to Vietnam, Yasuaki Tanisaki, said that since 1992 Japan had provided Vietnam with 1,836.1 billion yen (US$23 billion) of ODA.

“In the Japanese 2011 fiscal year, Japan gave ODA worth 270 billion yen of ODA (US$3.4 billion) to 16 projects in Vietnam. This was a record number in Japan’s ODA-provision history for foreign countries,” the ambassador said.

Japan’s ODA capital has been invested in many areas in Vietnam. Japan has, in particular, placed great importance on infrastructure development because of its essential importance for the economic growth of the country.

Among the many major infrastructure projects it has or is currently supported are the Hai Phong seaport, National Highway No.5 and Tan Son Nhat Airport, North-South Expressway, Cai Mep-Thi Vai seaport and Lach Huyen Port.

Yasuaki Tanisaki said: “I feel proud that Japan’s ODA capital has been involved in these high-priority projects.”

However, he said that some projects had not made the desired progress, and such projects were increasing in number.

The delay of these projects could be attributed to issues related to land expropriation and resettlement of residents.

“We must tackle these problems in order to further improve effectiveness,” he said. “Japan willingly continues to provide assistance to infrastructure development in Vietnam. More financial support is needed for the projects which Japan has been cooperating with, including the major projects.”