ODA disbursement still slow
09:03 | 06/06/2012

VGP - Though much progress has been made in mobilizing, attracting, managing and using ODA, disbursement is still far from expectations, especially for large-scale investment projects, said Deputy Minister of Planning and Investment Cao Viet Sinh.

The slow ODA disbursement is attributed to both objective and subjective causes.

For example, Vietnam’s system of legal documents on ODA attraction, management and usage remains inconsistent and incompatible with international practices. This has caused difficulties to project implementation.

Specifically, as policies and regulations on capital construction are often changed, many projects have had their investment capital revised, while regulations on revising projects remain complicated.

Besides, though Vietnam and donors have made much progress in harmonizing procedures, some differences remain. This is particularly so in bidding, site clearance, compensation and resettlement.

Moreover, it takes two or three years for preparing and implementing projects, from proposing ideas to signing an international treaty for the project. Thus projects often have their designs, technologies and investment capital revised, while site clearance costs also increase.

Besides, the collaboration mechanism between ministries, concerned state agencies and localities involved in ODA-funded projects remains lax and ineffective, while localities’ organization and management ability is limited.

Foreign development partners will change their assistance policies for Vietnam, in a manner to be suitable to the conditions of the country which has been listed as a lower middle-income country.

Deputy Minister of Planning and Investment Sinh said some bilateral donors will change the form of development cooperation with Vietnam to direct support for development of partnership arrangements such as inter-relationship between universities, research institutes and centers or organizations.

Most donors will adjust and change their assistance policies for Vietnam and thus ODA funds tend to drop and concessional loans gradually increase. This requires Vietnam to have proper approaches to the mobilization of funds and to enhancing the effectiveness of these funds to satisfy the demand for development investment.

Non-refundable ODA will be used for poverty reduction, health care and education, institutional development and human resources, science, technique and technology transfer.

ODA funds will be focused into building infrastructure, social welfare works, and projects in the sectors in which capital cannot be directly recouped and comes from the state coffers.

Meanwhile, concessional loans will be earmarked for national key projects with capacity of re-payment, such as hydropower plants, expressways, metros, flyover railways in big cities, and communication systems.

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