VietNamNet Bridge – Since a roundtable conference on the provision of official development assistance (ODA) for Viet Nam in Paris, France on November 8, 1993, international donors have accompanied Viet Nam on its development process and pledged nearly US $80 billion in ODA to help the country secure sustainable development.  

At the roundtable, the Government reported an expectation of US $1.1 billion in 2000 and actually US $1.6 billion was disbursed in the year.

The gathering laid a basis for cooperation between Viet Nam and the international donor community based on mutual understanding, trust and in a constructive manner. An annual meeting of the consulting group for Viet Nam (CG) on development policies and aid was set up.

After four CG meetings in France, and one in Japan, the annual dialogue has been held in Viet Nam since 1998 to draw the participation of ministries, agencies, localities, the private sector, social organizations and domestic and international non-governmental organizations.

In addition, mid-term CG meetings have been held in localities to discuss socio-economic development policies at the local level.

Donors have pledged to provide US $78.195 billion for 20 years and the granted amount has increased steadily year to year despite economic difficulties facing the donor countries, such as the global economic crisis in 2008 and eathquake and tsunami in Japan in 2011. This shows the international community’s support for Viet Nam in implementing its sound development policies and their belief in the country’s effective ODA reception and utilization.

Some 28 bilateral and 23 multilateral donors have currently provided ODA for Viet Nam in the socio-economic field.

In addition, over 600 International Non-governmental Organizations (INGO) have granted approximately US $150-200 million annually to directly aid hunger eradication, poverty reduction, health care, education, training and job creation in rural and mountainous regions.

Viet Nam, once a poor and less-developed country, has seized opportunities, overcome challenges, devised a strategy to get out of the less-developed status in 2001-2010 and improved people’s living standards, providing a firm foundation for becoming a modern-orientated industrialized country by 2020.

By promoting internal strengths and utilizing effectively external resources, including ODA, Viet Nam has risen from a less developed and low-income country into a lower-middle-income one.

According to the Japan International Cooperation Agency, Viet Nam has achieved a high growth rate and the fastest poverty reduction in the world, which is resulted from the effective use of ODA. Viet Nam is also a pioneer in collaborating aid from donors.

The United Kingdom also evaluated that Viet Nam’s ODA management was good and ODA had contributed remarkably to socio-economic development, hunger eradication, poverty reduction and institutional capacity enhancement.

Although ODA just accounts for 4% of GDP, it makes 15-17% in total investment from the State budget, offering significant in investments for socio-economic infrastructure to create a foundation for maintaining fast and sustainable development and ensuring social welfare.

ODA has helped the country improve the public financial management system and modernize the banking system.

From 1993-2012, ODA channeled to programs and projects in agriculture, rural development, hunger eradication and poverty reduction has reached approximately US $8.85 billion. In transportation and telecommunications, about US $16.47 billion has been committed.

As a prioritized sector, education and training has been granted with US $2.44 billion while US$7.846 billion has been spent on environment and urban development.

In addition, US $2.578 billion has been mobilized for health care and social development.

ODA going to scientific and technological development has allowed the transfer of high technology advancement in IT, bio-technology, material and construction technologies, and the sharing of advanced managerial skill among research centers, ministries, agencies and localities.

The Ministry of Culture, Sports and Tourism has attracted around US $79 million for its programs and projects to promote culture, family values and tourism.

In the 1993-2013 period, centrally-run provinces and cities have received and utilized ODA in agricultural and rural development, hunger eradication, poverty reduction and urban infrastructure construction.

Most of bilateral donors have set short or medium-term (three-year) cooperation programs while such multilateral donors as the World Bank (WB), the Asian Development Bank (ADB), the United Nations’ organizations and the European Union have devised partnership strategies in line with Viet Nam’s five-year socio-economic development plans.

ODA has been granted to Viet Nam in different channels, including support for the State budget, programs and projects.

According to international aid practices, ODA provision, particularly non-refundable and favourable aid, often decreases when the receivers have achieved the middle income status. However, most of the donors to Viet Nam continue supplying the capital source with adjusted provision model and structure to adapt to the new situation.

To meet the new requirements, the Government and the donors have decided to replace the annual CG meeting by the Vietnam Development Partnership Forum (VDPF) to focus further on dialogues related to development policy.

In stead of making ODA commitments, the donors now can make ODA provision pledge at any time of a year as they concern about the outcomes of ODA utilization.

The VDPF will promote the Government’s active role in selecting subjects, preparing contents, organizing and chairing the forum. Responsibilities of the Vietnamese agencies and the donors will also be improved in implementing the forum’s conclusions, which will enhance the cooperation between Viet Nam and the donors in the new situation.

To realize the 2011-2020 socio-economic development strategy and five-year socio-economic development plans, the Government will prioritize ODA and soft loans in developing a modern synchronized socio-economic infrastructure on a large scale, boosting hi-tech, agriculture and rural development, enhancing the institutional capacity and administrative reform, protecting the environment and natural resources, preventing and eliminating natural disasters, responding to climate change, and encouraging sustainable and green growth.

The Government will also spend ODA on supporting the development of trade, investment, finance, banking, tourism and some production and trade areas; facilitating national target programs; developing human resources; transferring technology and improving the research and implementation capacity.

Source: VGP