Home / Investment / News
ODA funds remain key in Vietnam’s socio-economic development: Deputy PM
Nguyen Tung 18:02, 2021/10/01
Vietnam is working on simplifying the ODA management process to speed up disbursement. It hopes ODA providers harmonize their own procedures with local legislation.

The Vietnamese Government gives priority to attracting official development assistance (ODA) funds for socio-economic development, considering it an essential part of any mid-term public investment plan.

 Deputy Prime Minister Pham Binh Minh and delegates. Photo: Nhat Bac

Deputy Prime Minister Pham Binh Minh stressed the view in a meeting with six international development banks on September 30, including the World Bank (WB), the Asian Development Bank (ADB), Japan International Cooperation Agency (JICA), Export-Import Bank of Korea (KEXIM), French Development Agency (AFD), and German Development Bank (KfW).

“The Government is at the final stage of drafting a new decree in replacement of decree No.56 related to ODA management,” Minh said, adding opinions from six banks at the meeting would be taken into consideration in finalizing the decree.

According to Minh, a number of laws stipulating the use of ODA, including the Law on Public Investment and the Procurement Law, are subject to revision.

“The Government aims to not only simplify the procurement process but also ensure efficiency in the use of ODA,” Minh said, in return, Vietnam calls for six banks to consider harmonizing their respective process with local legislation.

For the 2021-2025 period, Minh noted the Government is devising a portfolio of priority projects to be financed by the ODA funds, expecting development banks to provide the funding in line with Vietnam’s objectives.

 Overview of the meeting. Photo: VNA

At the meeting, Deputy Minister of Planning and Investment Tran Quoc Phuong said the disbursement of foreign funds in the first nine months was estimated at VND6.54 trillion ($287.6 million), or 12.69% of the plan.

Phuong explained the modest disbursement rate was due to the complicated process of work permit issuance for foreign experts that normally takes more than two months; slow project execution process due to the Covid-19 situation; quarantine period for foreign experts; or project owners facing difficulties in importing equipment and materials for ODA projects.

Phuong also pointed out the complicated procedures stipulated in Decree No.56 in extending ODA-financed investment projects, not to mention slow progress in the site clearance or approval from various government agencies.

World Bank Country Director to Vietnam Carolyn Turk said as Vietnam moves to the higher-income country group, the country should focus more on large-scale and complicated projects. However, the current portfolio of ODA projects still consists of small-scale projects or those with the same functions in different provinces/cities.

Turk cited an example that in other countries when dealing with challenges on water resources, they would have a national program on this specific issue. Vietnam, however, has different water purification projects in different localities.

These projects are isolated and therefore fail to provide stronger results beyond these provinces or cities.

Turk said small projects could only solve small problems and a large one would have greater economic impacts, expecting her hope for WB to work with the Government in major projects with high spillover effects.

Since 1993, Vietnam has mobilized over $80 billion in ODA and preferential loans, making the country one of the largest ODA recipients globally.
TAG: Vietnam ODA investment fund ADB World Bank JICA
Other news
15:41, 2022/41/19
Vietnam tops ASEAN as favorite destination for Japanese businesses: JETRO
Vietnam remains an attractive market in the eyes of investors with clear advantages such as a quality workforce and a large domestic market of high potential.
14:31, 2021/31/29
FDI commitments to Vietnam rise 9.2% to US$31 billion in 2021
Singapore was Vietnam’s largest investor in 2021 with registered capital of U$10.7 billion or 34.4% of the total newly registered FDI projects.
17:57, 2021/57/22
Vietnamese e-wallet Momo to become unicorn with $200-million fundraise
The Vietnamese creative startup ecosystem is drawing an increasingly active participation.
12:05, 2021/05/21
PM approves US$254-million airport in Quang Tri
The project is set to proceed under the public-private partnership (PPP).
20:53, 2021/53/20
Vietnam’s 10 outstanding M&A deals in 2021
During the 10-month period, Vietnam’s M&A market attracted over US$8.8 billion, a surge of 18% against 2020 and 13.7% compared to the pre-pandemic period in 2019.
16:36, 2021/36/17
Vietnam set to receive US$23 billion in ODA for 2021-2025
The ODA would help realize the Government’s vision of ensuring inclusive growth by accelerating the development level of poor provinces/cities that otherwise would not be able to mobilize domestic funds.