Last updated: Monday, May 20, 2013
Private Enterprises to Get ODAPosted: Monday, June 18, 2012
To strengthen the trust of donors, Vietnam continues to complete the institutional framework to better use the capital from foreign aid, said Deputy Minister of Planning and Investment Cao Viet Sinh to Vietnam Business Forum on the sidelines of the 5th Aid Effectiveness Forum (AEF) in Hanoi. Anh Phuong reports.
Could tell us about the situation of attracting aid for Vietnam?
In the unfavorable condition, some sponsors have changed the forms of cooperation, some increase preferential fund, some decrease donor aid to Vietnam. As for ODA and concessional
loans of donors from 2011 to 2015, they are expectedly committed an amount of about US$32-34 billion, disbursed capital is about US$14-16 billion (equivalent to 6 percent of total social investment), of which, about 50 percent of disbursements is transferred from programs and projects signed in the period of 2006-2010. Thus, on average, in the period of 2011-2015, ODA and concessional disbursements will be about US$2.8-3.2 billion. The implementation, commitment and disbursements of ODA and concessional loans have significant meaning to support the 5-year plan of socio-economic development 2011-2015
What are the greatest difficulties in the disbursement of ODA in recent years?
In recent years, although the Government as well as the Ministry of Planning and Investment have attached great importance to mobilising, attracting, managing and using ODA, the disbursement of ODA has not met the requirements. In addition to objective reasons, we have to admit that there are still subjective reasons affected the disbursement process of ODA. First of all, it’s the institutional problems and policies related to ODA such as Vietnam’s legal documents in attracting, managing and using ODA not consistent with international practice. Besides, project preparation time is often prolonged, leading to the adjustment of projects, etc.
Could you give some predictions on the attracting ODA in the future when Vietnam has basically become a middle income country?
Clearly, when Vietnam becomes a middle income country, the international community as well as the donors will have some changes to adapt with the context of Vietnam standing in the ranks of low-income countries. Accordingly, a number of bilateral donors will transform their official development cooperation with Vietnam to direct support in order to develop cooperation between partners such as direct relations between universities, institutes, research centers or institutions of both sides, etc. and some donors may terminate the programs providing ODA for Vietnam.
Due to these changes, in the next time, capital grants will decrease while concessional loans will tend to increase. Therefore, there should be flexible approach toward maximum use of ODA with preferential terms, particularly in the period 2011-2015.
One of the topics concerned by many economists is how Vietnam reacts to the access of private enterprises to ODA. What is your opinion on this issue?
I must say that in the recent time, Vietnamese Government has been very successful in stabilizing the macro economy, especially in controlling inflation. The main reason is that we have adopted the tight monetary policy. However, it causes difficulties for enterprises in access to capital. Therefore, in this context, external sources like ODA play an important role.
Currently, the Ministry of Planning and Investment as well as the donors are interested in accelerating the disbursement of capital flow. However, we are facing some bottlenecks, thus obstructing the disbursement process. First, the reciprocal capital is not guaranteed to meet the requirements in ODA projects. Second, difficulties in constraints and capability of project management board also hinder disbursement process. The Government has recently directed the Ministry of Planning and Investment as well as related agencies to strengthen the review of delayed projects to have solutions to the problems. We also actively work with foreign partners such as the World Bank (WB), Asian Development Bank (ADB) and the embassies of Japan and Korea to review each project to put delayed projects out of the list.