14:41 | 27/08/2015 Investment
(VEN) - According to the Ministry of Planning and Investment’s report at a recent meeting of the National Steering Committee on ODA and Preferential Loans, total official development assistance capital and preferential loan disbursement reached almost US$1.92 billion in the first six months of this year, including nearly US$1.74 billion in preferential loans and US$181 million in non-refundable ODA. Disbursement was 38 percent down on the same period last year.
Sluggish ground clearance is one of major reasons for reduced ODA capital disbursement
Also according to the Ministry of Planning and Investment, ODA and preferential loan disbursement differed between sectors and localities. Projects and programs in areas such as transport, electric power and urban development recorded a higher disbursement rate than other sectors such as health, education and training, information and communications, and labor. ODA disbursement in major cities like Hanoi and Ho Chi Minh City was much faster than in other localities nationwide.
Reduced ODA capital disbursement is because about US$350 million worth of loans was disbursed quickly for the Economic Management and Competitiveness Credit (EMCC) program and the Support Program to Respond to Climate Change (SP-RCC). In addition, major donors in the group of six development banks disbursed less than a year ago. Specifically, the Asian Development Bank (ADB) disbursed US$331 million in the first half of this year compared with US$899 million during the same period last year, the Japan International Cooperation Agency (JICA) US$575 million and US$1,171 million, and the World Bank (WB) US$577 million and US$781 million, respectively.
The Ministry of Planning and Investment largely attributed the decline to problems related to law, sectoral standards and regulations, project development, differences in procedures between Vietnam and donors, insufficient counterpart funds, and ground clearance operations. Among these, the biggest problem lies in the prohibition to disburse faster than the schedule adopted by the National Assembly in its Resolution on State Budget Estimations for 2015.
To achieve the goal to disburse the same or more ODA capital and preferential loans than in 2014 (US$5,655 million was disbursed in 2014), at the meeting of the National Steering Committee on ODA and Preferential Loan, experts said that it is necessary to improve the legal framework and set public standards and regulations on ODA capital use. It is also important to increase links between agencies in preparing projects and negotiating agreements, particularly with development banks in concluding ODA and preferential loan programs. State management agencies, project investors and donors need to closely monitor projects which have lagged behind the schedule, while regularly organizing meeting to review progress, resolve problems, boost the implementation of projects and increase the disbursement rate of ODA programs and projects.
To resolve problems in terms of insufficient counterpart funding and ground clearance, the Ministry of Planning and Investment asked related ministries, localities and businesses to check annual domestic counterpart funding before calculating foreign loan resources to keep up with the project development schedule. In cases where counterpart funding is insufficient, the ministries, localities and businesses must find capital sources.
The Ministry of Planning and Investment also asked the government to apply specific policies on ground clearance, particularly for national major projects, in order to closely monitor ground clearance operations and resettlement projects to ensure benefits of both state and people and to accelerate the pace of ODA projects.