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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 5.4 billion USD, nearly 1 billion USD higher than the previous year, the World Bank (WB) Country Director said.

Country Director said 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 2 billion USD of the total 4.4 billion USD 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 2.8 billion USD for 2004, to 3.4 billion USD for 2005, 3.7 billion USD for 2006, and jumping to 4.4 billion USD for 2007. However, the disbursement has remained at about the same level, about 1.7 billion USD or 61 percent of the pledged amount in 2004, 1.8 billion USD or 53 percent of the pledged amount in 2005, and nearly 2 billion USD 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 emphasised.

“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 economist told Viet Nam News Agency reporters on the sidelines of the press conference.

Although Viet Nam attracts more foreign direct investment (FDI), expecting 16 billion USD for this year, and domestic investment is fast on track, donors remain to increase their ODA commitments to the country by nearly 1 billion USD 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. (VNA).

 
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