ODA disbursement remains slow on lack of reciprocal capital

Official development assistance (ODA) has long played a key role in the national socioeconomic development particularly infrastructure construction, said minister of Planning and Investment Nguyen Quang Vinh.

For 20 years (1989-2012), donors have funded around USD 71 billion in ODA. The pledged total volume have climbed to USD 53 billion, of which USD 33 billion has to be disbursed as yet.

Ministry of Planning and Investment (MPI) in collaboration with large donors including the World Bank (WB), Asian Development Bank (ADB), French Assistance Funds, Japan, Australia and EU have figured out several major factors hampering ODA disbursement.

First and foremost, Vietnam has failed to provide sufficient reciprocal capital. Also, in appropriate and inconsistent compensation prices have take toll on site clearance, which would then slow down disbursement. Moreover, management styles of central and municipal project management boards appear to keep changing.

Thus, it is high time legal framework for ODA management was perfected. Presently, MPI together with related ministries, branches and foreign organisations has had Decision 131/CP revised for effective ODA management and deployment so as to be submitted to the government early this July.

Additionally, land law is expected to be amended in the time to come so as to map out a single scheme guiding site clearance and compensation for significant national projects. Also, members of project management boards should be equipped with professional skills.

Normally, low-income countries could enjoy much more capital assistance than middle-income ones. Yet, Vietnam entered the group of middle-income countries with average per capita of above USD 1,000 two years ago. As a consequence, ODA that used to reach Vietnam would now partly head for underdeveloped economies, which would thus require extreme caution when borrowing ODA capital in the near future.

 

Category: Finance