DongNai: Web portal

https://dongnai.gov.vn

Minister of Planning and Investment Nguyen Quang Vinh: the main cause of slow ODA capital use is the lack of reciprocal capital

The slow progress of many projects using Official Development Assistance (ODA) capital is also the problem of public interest in recent time. Minister of Planning and Investment Nguyen Quang Vinh had a conversation with News Agency reporter about the causes and solutions to improve the efficient use of this important capital.


​According to Minister Nguyen Quang Vinh, ODA is a very important source, especially in the infrastructure sector of the country. ODA has two contents, an array of concessional loan from countries to Vietnam, with low interest rates and long term; the Other one is a non-refundable aid which is increasingly limited in ODA structure. Therefore, the nature of ODA capital is the state budget which needs to be managed and used rigorously and effectively.
 
In recent times, Ministry of Planning and Investment, Ministry of Finance and other ministries, sectors and localities concerned, especially investors, have carried out ODA projects extremely positively. The country also raised a very large ODA source with annual average amount of about $7 billion. For example, in 2012, the raised amount is $ 7.3 billion. For past 20 years (from 1989 to present), total expected ODA from other countries to Vietnam is $ 71 billion. The capital source from nations which commit to aid Vietnam is $ 53 billion. So far we have disbursed over $ 33 billion; more than $ 20 billion left has been being disbursed. This does not mean that the capital source has been sent to Vietnam to use but it is still in their countries and will be disbursed according to the progress of each project.

It can be said that Vietnam is one of the countries which is considered as the effective use of ODA. This was also affirmed by countries in the world.

However, slow ODA disbursement compared to many other countries is also a limitation of Vietnam which needs to be concerned. Recently, the Ministry of Planning and Investment has joined with other major donors like the World Bank, Asian Development Bank, the Development Assistance Fund of France and countries (Japan, Australia, EU ), which financially aid Vietnam, have summarized and found that the main causes leading to slow disbursement in Vietnam are primarily due to lack of  reciprocal  capital. When the commitment is to have enough reciprocal capital, they give us a hundred VND, we have to give out 20 VND, the average is 80: 20 general rate. So the projects of major infrastructure such as highways, national highway ... up to $2-3 billion. If it is $ 3 billion, Vietnam has to face with the huge reciprocal capital, 20%   of 3 billion, which is about 600 million VN dongs. Moreover, Vietnam has many projects like that, which lead to low reciprocal capital source. Thus, the current use of ODA is slow.

At present, The Ministry of Planning and Investment is working with the ministries and sectors of the Government to find out the way to solve this problem, to ensure a suitable reciprocal rate.

The second cause is land clearance. The clearance in Vietnam is very difficult. To make the highways, major projects, need to take up a huge area, so the clearance of the project at central and local levels  often meet difficulties due to the compensation is not uniform which takes the ODA  disbursement long time.

The third cause is the operation capacity and manner of management authority for central and local projects, especially usually unfixed and changeable ones in local.

At this time, while the public investment declined, the increasing use of ODA is one of the important measures of the Ministry of Planning and Investment in particular and of the Government in general.

To boost the use of ODA, it is necessary to focus on immediate settlement of these three reasons. The Government and the Ministry of Planning and Investment are making effort to solve these difficulties. The first is improving the legal framework for ODA management; specifically 131/CP Decree of the Government on management and use of ODA source. The Ministry of Planning and Investment has joined with other ministries and agencies, international organizations having assessment and several amendments and also preparing to submit the Government in this early July to manage, allocate and use ODA more effectively.

To solve the reciprocal capital source, the Ministry has joined with other relevant ministries and branches to discuss with ODA agencies granting to Vietnam to find solutions.

As for land clearance, Central Resolution of infrastructure building and synchronous development clearly states that in the next time simultaneously with the Land Law revision, will modify and form a special mechanism of land clearance compensation policy for important works of the country.

The improvement of capacity of the management authority will enable staff to be trained to a professional level, and ensure stable job layout.

The Minister of Planning and Investment also said that when Vietnam witnessed poverty with low income which below the world average, the country was aided with ODA with higher limit. However, since Vietnam announced that national income per capita above $ 1,000 in 2010, which is in the group of countries with average incomes, the level of ODA aided for Vietnam has been greatly reduced in order to support poorer nations. Therefore, the ODA loan in the future should be considered carefully, the thought that it is good to have a lot of ODA should be eliminated, whereas, it is more important to consider the root of demand, how urgent it is before making an ODA loan and ensure loan payment.

Source: Vietnam News Agency

You did not use the site, Click here to remain logged. Timeout: 60 second