An official from the Japanese International Cooperation Agency (JICA) says Viet Nam needs to rein in inflation to avoid negative impacts on official development assistance (ODA) projects.
Speaking on the sidelines of the on-going Mid-term Consultative Group (CG) Meeting of donors for Viet Nam in Lao Cai province’s Sapa, representative head of JICA in Vietnam , Hiroaki Nakagawa, said ODA has been used effectively in Viet Nam and that capital source from Japan has contributed to boosting the country’s economic development.
However, he warned that the current high inflation rate in Viet Nam has had negative influences on ODA projects and investment efficiency.
“We need to consider why the rate of ODA disbursement in the first months of the year is low and we expect the Vietnamese government would carry out reform on institutions to increase the pace of ODA disbursement in the coming time,” Nakagawa said.
He pointed to the need for Viet Nam to further improve legal frameworks to attract ODA from donors and from individual sectors of participating countries to contribute to the development of Viet Nam’s economy.
According to a Government report at the CG meeting, ODA disbursement in Viet Nam over the past five months of this year is lower that that of the same period last year.
However, Minister of Planning and Investment Vo Hong Phuc said the signing and implementation of ODA projects have been accelerated and ODA disbursement gained an encouraging number.
The CG in late 2007 saw donors commit a record US$5.4 billion (the figure was $4.45 billion in 2006).
With a commitment of more than $1.11 billion, Japan topped the list of ODA donors for Viet Nam.