WB to Help Viet Nam Speed up ODA Disbursement

The donor community and the Vietnamese Government will join efforts to accelerate the disbursement of official development assistance (ODA) in 2008, especially when commitments recorded over US$5.4 billion , nearly US$1 billion higher than the previous year, the World Bank (WB) Country Director said.

Foreign donors at the CG2007 meeting yesterday

Country Director Ajay Chhibber said at a press conference on the results of the Viet Nam Consultative Group Meeting (CG) in Ha Noi on December 7 that demand to increase the speed of ODA implementation are responsibility of both the Vietnamese Government and donor community. “It is also common for the donor community to look at Vietnamese system and not always insist on using their own system for project implementation,” he told the press.

Viet Nam has disbursed nearly US$2 billion of the total US$4.4 billion commitment in 2006, an increase of 5 percent over the plan and a year-on-year increase of 10 percent. However, donors at the CG meeting continued calling on Viet Nam to exert more efforts to push up the disbursement because in comparison with the increasing total commitments each year, the result is far the expectation.

At this year’s meeting, the Asian Development Bank’s representative said that the total ODA pledge to Viet Nam has been increasing steadily: from US$2.8 billion for 2004, to US$3.4 billion for 2005, US$3.7 billion for 2006, and jumping to US$4.4 billion  for 2007. However, the disbursement has remained at about the same level, about US$1.7 billion or 61 percent of the pledged amount in 2004, US$1.8 billion or 53 percent of the pledged amount in 2005, and nearly US$2 billion or 51 percent of the pledged amount in 2006.

The WB Country Director attributed the slow disbursement to about 50 percent of ODA sources in Viet Nam to infrastructure projects, which need more time to implement and even finish three or five years longer than projects in other sectors. Other developing countries, for example those in Africa, used only one-thirds of ODA for infrastructure projects, he said.

The WB’s recent reports said ODA is really effective in Viet Nam, more effectively than many developing countries, Chhiber emphasized.

“It is true that slow disbursement is a concern but that is a concern only to some extent as Viet Nam has attained development outcomes and so development impacts on the province have been highly satisfactory,” Martin Rama, WB lead economis said on the sidelines of the press conference.

Although Viet Nam attracts more foreign direct investment (FDI), expecting US$16 billion this year, and domestic investment is fast on track, donors remain to increase their ODA commitments to the country by nearly US$1 billion compared with that for 2007. According to foreign economists, the increase aimed to continue helping Viet Nam invest in sectors which have less chance to access to FDI, such as infrastructure, social welfares, education, healthcare and poverty reduction because they are afraid of Viet Nam catching “hot growth” trap.

“The increase in aid is not the reflection of fear, it is the reflection of support and it supports because of measures Viet Nam is taking that go in the right to go beyond a middle income country,” Rama said.

Related article:
Prime Minister Assures Donors of ODA Efficiency 

Source: VNA

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