Accelerating ODA disbursement

Although Vietnam is a developing country, the official development assistance (ODA) capital provided by development partners is no longer large, but in the context of limited domestic resources and the Government wanting to promote disbursement of public investment capital to promote economic growth, it is necessary to quickly put ODA capital into implementation.

In fact, in recent years, ODA disbursement has been at a low level. Even the story of ministries, sectors and localities asking to return capital because they cannot disburse all of it often stems from the "difficulty in spending" ODA capital.

Statistics from the Ministry of Planning and Investment show that the total ODA capital and preferential loans that Vietnam has signed for the 2021-2023 period is about 3.35 billion USD. In fact, this is still a significant resource. If put into use, it will contribute significantly to promoting economic growth, as well as creating a foundation for growth and development in the following period.

But in reality, ODA capital disbursement is always slow. For example, in the total foreign capital public investment plan approved by the National Assembly for allocation in 2023 of VND 29,000 billion, the disbursement rate only reached 50.9% of the assigned plan.

In 2022, the disbursement rate will be much lower, reaching just over 26%. In 2024, the foreign capital plan is 20,000 billion VND, but the estimated disbursement rate as of February 29 only reached 1.42%.

Slow disbursement of ODA capital not only affects the overall progress, but also wastes an important resource, while interest still has to be paid, capital use efficiency is low, and even leads to consequences such as donors withdrawing capital, projects over budget, and difficulty in continuing implementation...

There are many reasons for the slow disbursement of ODA capital. These include difficulties in negotiating and signing loan agreements; differences in policies, processes and procedures between Vietnam and donors; investment preparation, project design and procedures that do not meet quality and time requirements. These include difficulties in planning and delivery; difficulties in bidding; difficulties in site clearance and counterpart fund allocation. These include difficulties in disbursement and settlement procedures.

Among them, the story of the difference in processes and procedures between Vietnam and donors has been mentioned many times and for a long time. However, up to now, the situation has not been resolved despite the great efforts of the Ministry of Planning and Investment in periodic exchanges with development partners, especially the group of 6 banks with the largest ODA capital for Vietnam, to remove difficulties and obstacles.

To promote ODA disbursement, at a recent meeting of the National Steering Committee on ODA, Deputy Prime Minister Tran Luu Quang directed that procedures must be harmonized for “win-win” outcomes, shortening the time for project preparation and implementation. Development partners and the group of 6 banks also agreed with this proposal.

However, while it is not possible to have a common set of procedures soon and wait for fundamental adjustments to the provisions of the law, Vietnam and donors still need to cooperate more closely to remove obstacles and difficulties in each project, because each donor has different regulations. Along with that, it is certain that it is necessary to continue to remove obstacles related to site clearance, bidding, disbursement procedures and settlement, etc., just like other public investment projects in general.

The economy is facing many difficulties. The growth momentum of public investment disbursement, including ODA capital, needs to be promoted more strongly. This is an important command of the economy!

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