A view of Nhat Tan Bridge in Ha Noi. — Photo cafef.vn
The ODA National Steering Committee held a meeting with donors in Ha Noi on Monday to seek solutions to speed up the disbursement of ODA capital and preferential loans, which has showed signs of slowing down in recent years.
The meeting, chaired by the steering committee’s chairman Deputy Prime Minister Pham Binh Minh, was attended by representatives from six donors which are the World Bank (WB), the Asian Development Bank (ADB), the Japan International Cooperation Agency (JICA), the Export-Import Bank of Korea (KEXIM), the French Development Agency (AFD) and the KfW Development Bank.
As of 2018, Viet Nam had received US$80 billion in ODA and preferential loans, making it one of the largest recipients of this type of funding in the world. About 80 per cent of the amount was provided by the six above-mentioned donors.
Of the total amount, US$7 billion was in the form of non-refundable aid, more than US$70 billion was concessional loans with interest rates under 2 per cent, and US$1.62 billion was loans under less generous conditions but their interest rates were still lower than commercial ones.
This is proof of Viet Nam’s efforts to mobilise external resources for national development. Donors shared the view that Viet Nam had effectively used loans, which was one of the reasons why they continued to commit ODA and concessional loans for Viet Nam in the past.
Reports from JICA, ADB and WB said their projects in Viet Nam had been implemented better than those in other countries, with a high rate of projects completed and achieving set targets.
In 2018 alone, the six donors committed US$28.9 billion for Viet Nam.
However, the disbursement rate of ODA and loans in Viet Nam had slowed, dropping from a high 23.1 per cent in 2014 to just 11.2 per cent in 2018, which was lower than the average global rates recorded by the six donors.
Of the committed capital for Viet Nam in 2018, up to $16.9 billion is yet to be disbursed.
The delay in disbursement was attributable to complicated and overlapping procedures, low readiness for projects and cumbersome processes and requirements for disbursement.
The slow disbursement of capital resulted in projects not meeting implementation schedules and targets while pushing up costs, affecting investment effectiveness and GDP growth.
The situation requires stronger commitment and more drastic efforts from all related sides to remove obstacles. It was proposed at the meeting that the six donors need to coordinate with the Vietnamese Government in building the mid-term public investment plan using ODA and concessional loans for 2021-2025 as one of the solutions. — VNS