Nation heads down new ODA path

Nation heads down new ODA path

Foreign donors yesterday pledged US$6.45 billion in official development assistance for Viet Nam in 2013, a reduction of about $900 million compared to last year's commitment.

The latest pledge came after the decision to end annual consultative meetings as a platform for ODA mobilisation and transforming them into an annual high-level policy dialogue, called Viet Nam Development Partnership Forum, starting in 2013.

Speaking to the press, Minister of Planning and Investment Bui Quang Vinh said the Government greatly appreciated the contributions despite the fact that many countries had to tighten their budgets as the global recession drags on.

"We recognise that each dollar is more valuable than ever," Vinh said. "We are committed to continue improving our management of ODA funds more effectively."

Minister Vinh acknowledged that development partners had to shift their priorities to countries that need more help. Despite this, he said ODA would still be an important source of capital for poverty reduction and development investment in Viet Nam.

"Twenty years ago, the key partners were Government and development partners," said World Bank Country Director Victoria Kwakwa. "Today there are more partners in Viet Nam's development – civil society, both international and local, as well as the private sector."

The new development partnership forum reflects Viet Nam's new challenges as a middle-income nation and in its restructuring progress, said Kwakwa.

She noted the country's continued downward economic growth trend over the last few years, suggesting that the economy was losing much of its dynamism, resulting from an over-extended State-enterprise sector, weak banking and financial sector and inefficient public investments.

"Without determined and resolute action, the costs of addressing these challenges will rise," she said. "Every day the cost gets deeper and the risk gets higher."

Prime Minister Nguyen Tan Dung told the meeting that the Government was committed to restructuring State-owned enterprises.

"We will make sure that they will compete at the same level with other components of the economy and increase their transparency and operations," he said.

A report from the Ministry of Finance presented at the meeting recognised that re-organising State-owned enterprises during recent years had been slow.

The report said that reforms on SOEs had been taking place in areas such as regulations on financial monitoring and performance evaluation to make sure State capital and assets were effectively invested.

By October 2012, 75 State groups and corporations had completed development of their restructuring projects.

The development partners also expressed concerns over the management of land resources, which include assuring secure land rights for farmers, more flexible use of agricultural land – and strengthening land-use rights of vulnerable groups.

United Nations Resident Co-ordinator Pratibha Mehta said the revision of the 2003 Land Law presented a timely opportunity to further Viet Nam's policy of ensuring that land was used effectively and equitably.

She said the UN recommended that compulsory land recovery be limited to defence, security and other public projects, rather than for economic investment. She also suggested increasing public participation in decisions involving land – including planning, allocation, recovery and compensation.

As the largest donor, Japanese Ambassador Yasuaki Tanizaki said yesterday Japan had already pledged about $1.4 billion of new ODA loans in the first half of this fiscal year (which starts in April 1 in Japan).

For the entire fiscal year, the commitment would reach $2.6 billion, Tanizaki said, although that would depend on the progress of project preparation. "I would like to ask the Government for smooth implementation of every project so that our ODA co-operation will keep being fruitful and successful," he added.

In the first 11 months of 2012, Viet Nam had reached a level of re-imbursement of $3.56 billion in ODA.

According to Vinh, improvements must be made on increasing the rate of re-imbursement, speeding up ground-clearance processes and increasing the competency of project managers and staff on ODA projects.

Through the framework agreement with Viet Nam, South Korea announced it would provide $1.2 billion from 2012-15 in addition to annual co-operation projects delivered by the Korea International Co-operation Agency.

In addition to the European Union direct contribution to ADB, UN and WB budgets, the EU will pledge $965 million in ODA to Viet Nam in 2013.

vietnamnews