US$3.34 billion ODA for agriculture and rural development
As a middle-income country, Vietnam is persisting with the process of economic restructuring with a focus on restructuring public investment, State owned enterprises (SoEs) and commercial banks.
To this end, Deputy Minister of Planning and Investment Cao Viet Sinh says, it is imperative to mobilize domestic and foreign funding resources, especially ODA from developed countries. By mid May, only US$530 million in ODA or 25 percent of the set target was disbursed, much lower than in the same period last year, due to the impact of the global economic crisis and Vietnam’s economic slowdown over the past years.
According to the Ministry of Planning and Investment (MoPI), to fulfill the socio-economic development targets set for 2011-2015, the country needs an estimated ODA amount of US$32-34 billion from international donors of which US$14-16 billion or 6 percent of the total social investment will be disbursed.
Therefore, revamping the ODA-related legal framework is becoming all the more urgent than before to ensure the transparent and effective use of the funding for socio-economic development.
The Vietnamese Government has recently adopted a project to attract, manage and use ODA capital and other preferential loans from donors in the 2011-2015 period. It is coordinating with relevant agencies in revising Decree 131 to deal with donors’ requirements and problems arising thereafter.
Hoang Viet Khang, Head of the MoIT’s Department for External Economic Relations says the project aims to improve the legal environment and the effectiveness of ODA.
The use of ODA capital and other preferential loans must take into account the competitive edge and reciprocal support between ODA funding and other development capital resources to ensure safety for public debts, he says.
A comprehensive legal framework for managing and using ODA capital and other preferential loans will make it easier for businesses to access ODA funding through regional and international cooperation programmes.
State management agencies, for their part, should enhance their role in coordinating and managing ODA capital to create the best possible conditions for private businesses to use ODA and preferential loans effectively.
Sectors and areas which are eligible for ODA and preferential loans from donors in 2011-2015 will focus on building a uniform infrastructure system, supporting social infrastructure projects, developing high-quality human resources, boosting agriculture and rural development and building the legal system and institutions of the socialist- oriented market economy.
A number of other ODA-funded projects will be targeted towards protecting the environment and natural resources, coping with climate change, stimulating green growth, and promoting investment, trade, production and business cooperation.