Mr Vinh: Compared to its levels of business investment, the agricultural sector receives a massive proportion of ODA capital. Approximately US$350–400 million is provided in non-refundable aid every year. But the agricultural sector’s vulnerability to disease epidemics, natural disasters, and market fluctuations mean investment efficiency underwhelms expectations.

Reporter: How will ODA for Vietnam’s agricultural and rural areas change as the country consolidates its middle-income status?

Mr Vinh: The days of non-refundable ODA capital with low interest rates will start including more agricultural sector ODA with higher interest rates. If the Government ignores rural area investment, attracting compensatory funding from other sectors proves difficult.

ODA capital allocated to rural areas will be reserved for viable projects on poverty reduction, infrastructure upgrades, healthcare, education, water supplies, hygiene, and other social welfare initiatives. Donors have expressed interest in targeting rural economies with members of ethnic minority groups.

Reporter: ODA capital contributed to Vietnam’s rural poverty reduction successes. How can ODA capital efficiently address lingering challenges and pitfalls?

Mr Vinh: Vietnam’s recent poverty reduction efforts capitalised on preferential, non-refundable ODA.

This strategy is not sustainable over the long term. Effective poverty reduction asks for “counterpart capital” or “buy-ins” from recipients themselves. ODA projects requiring expressions of commitment of between 10–15% are one suitable alternative for a middle-income nation.

Reporter: Vietnam’s rural areas remain poor on an international scale. How can Vietnam maximise the ODA capital it receives from the increasingly limited funding available?

Mr Vinh: The Vietnamese economy has improved. The ensuing drop-off in preferential ODA makes efficiency even more important. ODA capital should be allocated to the agricultural sector in a manner encouraging restructuring and according with broader national socio-economic development plans.

The Government will devote the most effort to attracting capital for poverty reduction, climate change adaptation, natural disaster preparedness, and environmentally friendly, sustainable development.

Ensuring advanced technology agricultural projects receive the necessary funding will hone the sector’s international competitiveness.

The Government’s decree No. 210 replaced the outdated decree No. 61 last December. It calls for more rural area and agricultural investment from Vietnam’s other economic sectors as well as clarifying where ODA capital is most crucial.

Reporter: Thank you.