Vietnam cuts project approval times to meet ODA lender concerns
Vietnam's government
said it has cut project approval times in a bid to
ease concerns of countries and agencies that their
annual loan and grant commitments of as much as
$2.5 billion aren't being taken advantage of fully.
The so-called Consultative Group includes the
World Bank, the Asian Development Bank and
other agencies and countries that provide Vietnam
with grants and low-interest loans known as official
development assistance, or ODA. The group, which
has pledged more than $22 billion to Vietnam
since 1993, met on Friday in the northern
Vietnamese resort town of Sapa.
The average project preparation time for
ODA-funded projects in Vietnam is 30 months,
compared with 19 months globally, according to
Klaus Rohland, the World Bank's Vietnam country
director. Vietnam's government told international
representatives at the Sapa meeting that
measures have been taken to speed the pace,
said Minister of Planning and Investment Vo Hong
Phuc.
``This is an issue of great interest to both the
government and the donors,'' Phuc said in an
interview on Friday after the conference. ``The
appraisal and approval processes have been
streamlined.''
The meeting focused on finding ways to bring
government procedures in line with those of the countries and agencies offering grants and loans, Phuc said,
without giving details.
Less than half
Of the $11.8 billion in loans committed between 1993 and 2002 by the Japan Bank for International
Cooperation, the World Bank, the Asian Development Bank, the Agence Francaise de Developpement and the
Kreditanstalt fuer Wiederaufbau, about $4.9 billion, or 42 percent, was transferred by the end of 2002, according
to a performance review.
``While there has been some general improvement in the elapsed time from loan approval to loan effectiveness
of major donor projects, it is still considered unsatisfactory,'' the performance review among the five banks and
the Ministry of Planning and Investment found. ``The actual time needs to be significantly reduced.''
Vietnam's inability to absorb ODA results from confusion caused by conflicts between government and lenders'
procedures, inconsistent Vietnamese laws on public investment, weak project management skills and lack of
government ability to monitor and evaluate projects, the performance review found.
Changing the relationship between Vietnam's central and local governments by allowing more budget authority to
be given to local authorities would help ease some of the problems, according to the review.
Delays in disbursing commitments also result from the lenders' complicated procedures, the World Bank's
Rohland said at a news conference in Hanoi on Tuesday ahead of the meeting.
Three fingers
``As a donor, you always tend to point to inefficiencies on the government side, but never forget that if you point
a finger at someone, three fingers point back at you,'' he said.
Still, Vietnam should take advantage now of the concessional money it's being offered, while the Southeast Asian
nation of 80 million people is still eligible for the International Development Association funding that the World
Bank reserves for the world's poorest countries, Rohland said.
Vietnam's gross domestic product has doubled in a decade, and at its current growth rate, the country could be
ineligible for the most preferential funding terms within another decade, he said.
``They should try their best to access concessional resources, before at a later stage they have to rely on market
terms,'' Rohland said.
Phuc, Vietnam's top official overseeing foreign investment, called for greater efforts from both sides to increase
the effectiveness of grants and low-interest loans, in comments closing the Sapa meeting.
``The government and the donors gave a common assessment at the meeting,'' Phuc said in the interview.
``Now we have solutions to sort this out.''
Bloomberg.com - June 22, 2003.
International donors pledged continued assistance for Vietnam
International donors have pledged to continue assisting Vietnam in
implementing its development strategy and poverty reduction programs. The
World Bank Director for Vietnam, Mr. Klaus Rohland, said at the closing
session of the mid-term consultative group meeting on Friday that international
donors and Vietnam had agreed that the development of infrastructure should
be carried out at the same time as hunger eradication and poverty reduction
and that the sphere of implementation of the combined strategies should be
widened.
At the technical meeting earlier on Thursday, Vietnam and the
international donor community discussed ways to reduce transaction costs so
as to boost the efficiency of ODA utilization.
On Saturday, delegates paid a fact-finding visit to ODA project sites in the
northern province of Lao Cai. International donors have pledged more than
US$22 billion for Vietnam over the past decade.
The formal consultative group meeting for Vietnam will open in Hanoi this
December.
Voice Of Vietnam - June 21, 2003.
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