Vietnam Looks Back On The ODA Years

ODA capital was allocated to over 2,500 projects in 1993-2017

The Ministry of Planning and Investment (MPI) has asked ministries and local authorities to issue reports about the status of ODA projects. 

Prior to that, a representative of the Ministry of Finance (MOF) said at the Government Office’s regular press conference in late 2017 that the government has assigned MPA to explain why ODA loans reached a total of VND600 trillion, twice as much as the amount approved by the NA.

Economists then voiced their concern that agencies were trying to borrow as much ODA capital as possible without thorough analysis about the necessity and efficiency of the capital use.

ODA projects 

A report shows that 2,591 projects received ODA capital in the 1993-2017 period, including 1,279 programs and projects invested in by ministries and branches, and 1,197 projects developed by local authorities. The others were from commercial banks and the Vietnam National Television.

The lending interest rates of ODA loan packages were 1-2 percent on average, while the terms had long grace periods (mostly 25-40 year loans with grace periods of 8-10 years).

ODA not given for free

Economists have repeatedly said that ODA capital is not non-refundable aid and that Vietnam has to pay a certain price for the loans. Vietnam needs to use ODA loans in the most effective way, they have said.

However, embezzlement, mismanagement, waste and theft have occurred in many ODA projects in recent years.

In 2009, Japan arrested then General Director of Pacific Consulting Company (PCI) for bribing overseas officials to win the bid. 

Huynh Ngoc Sy, then Vietnamese Deputy Director of the HCMC Department of Transport, head of the East-West Boulevard Project Management Board (now Vo Van Kiet Boulevard) was arrested by Vietnamese police and prosecuted for "taking advantage of their positions and powers while on duty".

Meanwhile, the scandals which have occurred in some Chinese-funded projects raised eyebrows. ODA turned out to be expensive, if counting the prolonged implementation of projects, socio-economic impact, social disorder, and money lost because of mismanagement.

Dinh Trong Thinh from the Finance Academy applauded the decision to review the implementation of ODA funded projects, and said this work should be done regularly, annually, or every three to five years. 

He noted that Vietnam is going to stop receiving ODA and needs to prepare for the non-ODA period.

He said Vietnam needs to assess the borrowing and use of ODA capital to find out how much capital Vietnam used, the benefits of the projects, and how the capital was used.

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Thanh Lich