On October 18, at the Annual Press Conference - Fiscal Year 2023 of the Japan International Cooperation Agency (JICA) in Vietnam, Mr. Sugano Yuichi, Chief Representative of JICA Vietnam Office, said that in fiscal year 2023, the outstanding result that needs to be mentioned is the ODA loan agreement signed last July for 3 projects with a total value of up to more than 60 billion yen (equivalent to 10,672 billion VND).
Mr. Sugano Yuichi, Chief Representative of JICA Vietnam Office
The capital was disbursed in three areas: urban public transport infrastructure improvement; agricultural supply chain enhancement; and post-Covid-19 economic and social recovery and development. This is the most ODA loan agreements signed at the same time in 6 years since 2017.
"The ODA loan signed with the Vietnamese Government in July with the aim of providing financial support for the Government's policies to restore and develop the economy and society after the Covid-19 pandemic can be considered a pioneering project of the new generation ODA program. We hope this support program will contribute to the recovery of the Vietnamese economy," Mr. Yuichi emphasized.
The Chief Representative of JICA Vietnam Office also said that JICA is continuing to discuss with Vietnamese Government officials about new generation ODA, aiming to provide ODA capital flexibly, meeting Vietnam's needs.
The construction progress of Metro Line 1 has reached about 96% so far.
Regarding the Ho Chi Minh City Urban Railway Line No. 1, Mr. Yuichi informed that according to the report of the Ho Chi Minh City Urban Railway Management Board (MAUR), the construction progress of the line has reached about 96% so far, expected to be completed by the end of this year, and it is expected that Metro Line No. 1 can be put into operation from July 2024.
Delayed approval can increase total project costs
According to the Chief Representative of JICA Vietnam Office, the purpose of ODA capital is to cooperate to contribute to the socio-economic development of Vietnam. However, in order to implement ODA projects smoothly, it is important that the country receiving ODA aid or ODA loans must have clear, easy-to-understand regulations and quick procedures.
JICA Annual Press Conference - Fiscal Year 2023
"Delays in the Vietnamese Government's internal approval process and procedures could cause the total project cost to increase due to inflation, exchange rate fluctuations, and increased material and equipment prices during the extended project period," Mr. Yuchi affirmed.
Therefore, JICA, together with other donors such as the World Bank (WB) and the Asian Development Bank (ADB), is asking the Vietnamese Government to take measures to improve it. At the same time, Mr. Yuchi also hopes that the Vietnamese Government will improve the complicated and overlapping approval procedures, reduce the number of documents required to be submitted related to the project as well as change the regulations on re-lending.
"We believe that if the above are improved, ODA capital will be used more effectively," said the Chief Representative of JICA Vietnam Office.
In addition, according to the forecast of the International Monetary Fund (IMF), Vietnam's real GDP growth rate is expected to increase by 4.7% for both 2023 and 5.8% for 2024. This growth rate is slower than the 8% rate in 2022.
Although the main cause is believed to be the impact of the global economic recession due to the unstable world situation, JICA representatives still expect the recovery of Vietnam's economy in the future thanks to the growth of domestic consumption, the increase in FDI capital flows and the recovery of the tourism industry.
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