Vietnam seeks to improve use of foreign aid
SAPA - Vietnam must hasten the
spending of the aid funds on which it is dependent and focus on
the effectiveness of projects, Deputy Prime Minister Vu Khoan
said on Friday.
"If we do not improve the official development aid procedures,
the disbursement would be very slow," he told reporters on the
sidelines of a mid-year meeting of donor nations and
organisations in the northern resort town of Sapa.
Vietnam, which has received aid for about a decade, was
pledged $2.5 billion this year, up from $2.4 billion in 2002.
About $509 million of that was disbursed in the first five months
of 2003.
The slow pace of aid expenditure has been a concern for the
communist country, where 29 percent of the 80 million
population live in poverty and which relies on foreign assistance
to build roads, provide clean water and other basic amenities.
Lao Cai province, host of the two-day mostly closed door
meeting, which drew representatives from nearly 40 groups, is
one of the poorest in Vietnam, with per capita income of $180
in 2002, far below the national average of $400 a year.
Critics say Vietnam's own red tape and poor coordination keep
the aid from being used more quickly.
Khoan acknowledged Vietnam needed to do more to help
funnel the money through.
"If we cannot raise capital locally in order to absorb the ODA it
would be very difficult," he said, referring to local funds
contributed toward projects. The proportion of matching funds
varies according to projects.
Donor representatives said they were encouraged that Hanoi
was trying to tackle the disbursement problem.
"Yesterday we discussed aid effectiveness," said a member of
the Japanese delegation. "Many common grounds were
identified."
Japan is the largest single provider of development assistance to
Vietnam and a major direct investor. It pledged $757 million in
loans and grants for 2003, up nearly one percent from 2002.
Pledges for 2004 will be announced at the main donors' forum
in December, where issues such as Vietnam's human rights
record will also be discussed.
By Christina Toh-Pantin - Reuters - June 20, 2003.
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