MOT believes Vietnam should borrow $300 million from China if it chooses Chinese contractors for the highway project, while the ministries of Planning & Investment (MPI) and Finance (MOF) say Vietnam needs to be more cautious about the project.

Debt owed by provinces and cities is poised to increase steadily in the coming years as the Government will boost its on-lending of foreign loans and reduce budget allocations for projects using ODA and preferential loans in provinces.

 VietNamNet Bridge – Viet Nam’s economic growth in 2016 will be affected by many factors. General Director of the Viet Nam Statistics Office, Nguyen Bich Lam, speaks to business news website BNEWS

VietNamNet Bridge - There are huge financial resources in Vietnam which still have not been mobilized for investment and development.

The HCMC government has proposed the Ministry of Planning and Investment assist the city to mobilize official development assistance and preferential loans for its large-scale infrastructure, transportation and environment projects.

VietNamNet Bridge - While some analysts believe official development assistance (ODA) should be reduced, others believe that Vietnam still needs ODA capital for infrastructure development.

VietNamNet Bridge - Relending ODA (official development assistance) capital instead of allocating capital is one of the methods Vietnam could use the capital source more effectively as ODA for Vietnam will be cut in the near future.

 VietNamNet Bridge – Last year’s budget deficit reached an estimated 7% of nominal gross domestic product (GDP), the highest level since 2000, the Vietnam Institute for Economic and Policy Research (VEPR) said in a quarter-four report.

About $15.5 billion worth of preferential loans within the framework of official development assistance (ODA) have been allocated to localities in the last 10 years. 

VietNamNet Bridge - Diverse sources of foreign direct investment (FDI) are expected to help Vietnam create equilibrium in attracting FDI and ease reliance on certain sources.

“Vietnam needs to take full advantage of ODA (official development assistance) provided by developed countries” was the reply to a question about whether the country should become choosier in receiving ODA and turning down some ODA sources.

VietNamNet Bridge - A National Assembly Deputy has suggested rejecting ODA from China. Experts have mentioned ‘the right to haggle about ODA’.

The news that Japan has entered an economic downturn has raised concerns among Vietnamese exporters. Meanwhile, experts believe Japan will still be keen in providing ODA (official development assistance) to Vietnam. 

VietNamNet Bridge - Spending too much while income is limited, according to experts, is the main reason behind the current worrying situation of public debt.

Chinese investors have shown greater interest in Vietnam as an investment destination, especially after Vietnam concluded negotiations for the Trans Pacific Partnership Agreement and signed a series of free trade agreements (FTAs).

The Ministry of Planning and Investment (MPI) has said that the official development assistance (ODA) is reserved for investment and development, not for commercial purposes. Economists say that ODA is not a ‘magic wand’ for support industries. 

VietNamNet Bridge - Experts have suggested that ODA (official development assistance) should be used to fund the support industry in Vietnam.  

The State Bank has told commercial banks to remain cautious about disbursing money for transport projects developed under the mode of BOT (build, operation, transfer). Meanwhile, investors say that BOT projects have an unreasonable mechanism.

VietNamNet Bridge – Viet Nam's many achievements in socio-economic development over the past 30 years of doi moi (renewal) owed much to 20 years as recipients of significant Official Development Assistance (ODA).  

VietNamNet Bridge - Vietnam lacks capital to build power plants and has called for foreign investment, which analysts say is not the best solution.