On the afternoon of March 27, at the Government Headquarters, Deputy Prime Minister Tran Luu Quang worked with a group of 6 development banks after he was assigned by the Prime Minister to be the Head of the National Steering Committee on ODA and preferential loans.
Development banks include: World Bank (WB), Asian Development Bank (ADB), Japan International Cooperation Agency (JICA), Export-Import Bank of Korea (KEXIM), French Development Agency (AFD) and German Reconstruction Bank (KfW).
Also attending the meeting were members of the Steering Committee on ODA and preferential loans; representatives of embassies of countries providing ODA to Vietnam.
The meeting aimed to identify difficulties and obstacles to find solutions to promote ODA disbursement progress and discuss the direction of ODA cooperation between Vietnam and donors in the coming time.
According to the Ministry of Planning and Investment, the total ODA capital and preferential loans that Vietnam has signed for the 2021-2023 period is about 3.35 billion USD. Ministries, sectors and localities have implemented 656 projects, including 47 investment projects, 215 technical assistance projects and non-projects.
The total foreign capital allocated from the Central Government for the 2021-2025 period approved by the National Assembly is 300,000 billion VND, of which the allocated capital is 270,000 billion VND, and 30,000 billion VND is general reserve capital.
In 2023, the total foreign capital public investment plan approved by the National Assembly is VND 29,000 billion; the disbursement rate reaches 50.9% of the assigned plan. In 2024, the foreign capital plan is VND 20,000 billion; the estimated disbursement rate by February 29 is 1.42%.
The Ministry of Planning and Investment said that the preparation, implementation and disbursement of ODA capital and preferential loans have not met the requirements and progress committed due to 9 main groups of reasons: (i) difficulties in negotiating and signing loan agreements; (ii) differences in policies, processes and procedures between Vietnam and donors; (iii) investment preparation, project design and procedures do not ensure requirements on quality and timeliness; (iv) difficulties in planning and assigning plans; (v) difficulties in bidding; (vi) difficulties in site clearance and counterpart capital arrangement; (vii) difficulties in disbursement and settlement procedures; (viii), limitations in resources and capacity of the governing body, project owner and project management board; (ix) difficulties due to changing objective conditions such as merging districts and communes.
At the meeting, representatives of the donors all assessed the meeting mechanism between the Steering Committee and the donors; Vietnam's ODA regulations are increasingly transparent; and the coordination between Vietnam and the donors is increasingly closer.
Donors all affirmed their commitment to continue providing ODA to Vietnam and were ready to support the Government in issuing regulations on the management and use of ODA capital; at the same time, they emphasized the need to harmonize donor regulations with Vietnamese law for ODA projects in order to shorten project preparation time.
Donors suggested that Vietnam continue to cut administrative procedures and speed up the process of giving opinions during project preparation and implementation.
Responding to the opinions of donors, Deputy Minister of Planning and Investment Tran Quoc Phuong said that the Ministry of Planning and Investment has established working mechanisms with donors such as: Periodic exchange mechanism with the group of 6 banks with the largest ODA capital for Vietnam, focusing on projects in the Mekong Delta; establishing a working group with the World Bank; establishing a mechanism for regular joint steering committee meetings between Vietnamese agencies and United Nations agencies; regularly exchanging and meeting with development partners when requested.
Deputy Minister Tran Quoc Phuong said that while waiting for fundamental adjustments to the law's regulations, Vietnam and donors need to cooperate more closely to remove obstacles and difficulties in each project because each donor has different regulations.
The Ministry of Planning and Investment has reported to the Government on amending and supplementing regulations on ODA re-lending; reported to the Government Standing Committee to consider signing a framework agreement with the WB and ADB on common policy mechanisms on bidding and site clearance to report to the National Assembly once instead of reporting multiple times.
The Ministry of Finance's leaders said they will soon propose amendments and supplements to regulations in decrees related to the content of balancing capital sources and taxes for donors.
The Ministry of Finance will review and eliminate unnecessary administrative procedures to shorten the process of project preparation, approval and implementation.
The Ministry of Education and Training has proposed to readjust the ODA re-lending rate for autonomous higher education institutions because the current regulations cause difficulties for schools due to their only source of income being tuition fees.
The representative of the Ministry of Foreign Affairs suggested that donors reconsider the requirement to sign a State-level loan agreement while Vietnamese law gives the Government the right to decide as an effort with Vietnam to harmonize procedures between the two sides.
Minister and Head of the Government Office Tran Van Son stated that ODA projects are slow because they must comply with both donor regulations and Vietnamese laws, leading to many procedures, prolonged project preparation, and the need to extend and re-sign agreements.
Speaking at the meeting, the Deputy Prime Minister highly appreciated the partners and the group of 6 development banks for providing Vietnam with ODA capital and preferential loans, contributing to helping Vietnam achieve great socio-economic development achievements in recent times.
The Deputy Prime Minister emphasized that the Prime Minister's recent decision to reorganize the National Steering Committee on ODA, along with the organization of a meeting with donors today, demonstrates the Vietnamese Government's determination to accelerate the disbursement of ODA capital and preferential loans.
The Deputy Prime Minister frankly acknowledged that in reality, Vietnam has more problems than donors. However, implementing an ODA project requires Vietnam to simultaneously carry out two sets of procedures to meet the donor's requirements on the one hand and comply with Vietnamese law on the other.
In addition, there are differences between the regulations of donors and Vietnamese law, which inadvertently becomes a major obstacle for Vietnam. Therefore, both sides need to coordinate closely to share, understand and make efforts to harmonize procedures so that both sides can win by shortening the time to prepare and implement projects.
Regarding the tasks ahead, the Deputy Prime Minister assigned the Ministry of Planning and Investment to synthesize the opinions at the meeting, advise the Head of the Steering Committee to issue a directive document assigning specific tasks and completion deadlines to ministries, branches and localities for the following groups of tasks: Amending and supplementing regulations of their sectors and fields appropriately; implementing outstanding tasks under their responsibilities; requesting ministries and branches to consider this a key task in 2024, to be more responsible, especially the members of the Steering Committee.
For localities, the Deputy Prime Minister suggested that sufficient counterpart funds must be allocated for ODA projects; when proposing new projects, they must be carefully calculated and considered; if they cannot afford it, they must not propose it to avoid paying back the capital.
The Deputy Prime Minister also requested that Vietnamese ministries, branches and localities closely coordinate with donors to agree on solutions to promptly overcome difficulties and problems arising in each project.
Regarding donors, the Deputy Prime Minister hopes that donors will consider providing capital with more preferential conditions and more open procedures, especially for projects against climate change and natural disasters because Vietnam is one of the countries most affected by climate change; and have special mechanisms for projects in remote areas of Vietnam.
Donors work closely with Vietnamese ministries, sectors and localities in developing a specific list of projects that are in line with Vietnam's priorities and urgent needs for the coming period.
The Deputy Prime Minister said he will maintain a regular meeting mechanism with donors so that both sides can understand, share, and make efforts to realize the common desire to speed up the disbursement of ODA capital and preferential loans.
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