15:42 | 07/12/2016 Economy- Society
(VEN) - "ODA disbursements have shown considerable improvements in recent years but remain slower than desired by ODA providers.", said Remi Genevey, Director of the French Development Agency in Vietnam
Deputy Prime Minister Pham Binh Minh, Head of the National Steering Committee for ODA and Preferential Loans:
The Vietnamese government has shown great interest in and proposed a variety of measures to speed up disbursements and enhance the effectiveness of using ODA and preferential loans. Governmental Decree 60/NQ-CP dated July 8, 2016 indicates specific measures to ensure the effective use of ODA loans.
From now until the year’s end, ministries, sectors, and localities are required to make greater efforts to enhance the contribution of ODA to socioeconomic development.
Deputy Minister of Planning and Investment Nguyen The Phuong:
The first reason for slow ODA disbursements is that the allocation of foreign capital for some projects does not match with implementation and disbursement capabilities. From this year, ministries, sectors, and localities are not allowed to disburse foreign capital according to the pace of implementation. To resolve this problem, the Ministry of Planning and Investment has submitted a detailed report to the government, recommending the allocation of an additional VND6,320 trillion for projects which are found to be eligible. Priority will be given to projects showing high feasibility of disbursement.
Christian Haas, Director of the German public-owned development bank Kfw’s Hanoi office:
Slow ODA disbursements will increase costs for Vietnam, which is a concern to banks. In the long term, this will make it difficult to persuade the governments of countries which provide ODA for Vietnam.
Therefore, speeding up ODA disbursements will help Vietnam make the most of these preferential loans and receive more ODA from foreign countries.
Achim Fock, Portfolio & Operations Manager at the World Bank office in Vietnam:
One of the reasons leading to a slowdown in ODA disbursement is that many Vietnamese governmental agencies failed to access preferential loans for public investment projects at a national level, so most preferential loans were provided for localities. Central agencies need to enhance the effectiveness of ODA. The Vietnamese government should create mechanisms that allow central agencies to carry out public investment projects at a national level.
Further, Vietnam needs to follow identical lending principles when providing ODA loans for localities. Loan assessment procedures should be simplified to facilitate localities’ access to ODA and preferential loans.
Remi Genevey, Director of the French Development Agency in Vietnam:
ODA disbursements have shown considerable improvements in recent years but remain slower than desired by ODA providers. Vietnam has become a middle-income country and received less preferential loans, so if it does not accelerate ODA disbursements, Vietnam won’t be able to make the most of this capital source.
Moreover, the Vietnamese government is determined to keep public debts at 65 percent of the country’s gross domestic product. This target requires more effective disbursements of ODA in the country. This will help Vietnam reduce expenses and mobilize capital for infrastructure investment in the current context.
Rustam Ishenaliev, Head of the Project Administration at the Asian Development Bank (ADB) in Vietnam:
Complicated procedures, a lack of initiative and weak management capabilities are major reasons leading to the stagnancy of ODA projects in Vietnam. In the context of receiving less preferential loans, Vietnam needs to manage the use of ODA loans more effectively and facilitate the implementation of projects using funds from these sources. When a loan agreement is signed, it is necessary to indicate the responsibilities of the project owner and all related parties.
In addition, the provision of adequate counterpart funds for site clearance and land reclamation, especially for large, complicated projects, needs to be ensured. As a partner for Vietnam, the ADB is willing to work with relevant governmental authorities in minimizing complicated procedures and ensuring effective development of ODA projects in the country.