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UN says aid flows to Vietnam up, but $6 bln stuck

HANOI - Disbursements of international aid to Vietnam have risen this year but outstanding pledges amount to more than $6 billion, the United Nations Development Programme (UNDP) said on Tuesday.

In a statement the UNDP said recent trends showed a narrowing of the gap between official development assistance (ODA) pledges and actual disbursements to communist-ruled Vietnam.

Quoting Planning and Investment Ministry estimates, the UNDP said aid flows in 1998 should hit $1.43 billion mainly due to improved implementation of big infrastructure projects. Total disbursements last year were just over $1 billion.

Disbursement delays on existing pledges were due to a sharp rise in commitments since 1993, time lags between pledges and project implementation and different donor procedures and conditions, the UNDP said.

``Total disbursements still lag behind ODA pledges, although the gap should narrow...,'' said the statement, prepared ahead of an annual meeting of the World Bank-chaired Consultative Group of donors to Vietnam.

The donors are due to meet in Paris from December 7-8 to discuss fresh aid commitments to Vietnam. Aid flows comprise a crucial component of the country's development needs.

Some $10.9 billion in ODA has been pledged to Vietnam since 1993 when the United States withdrew its veto on World Bank and International Monetary Fund lending to its former wartime foe.

The UNDP said the top five disbursers last year were the World Bank, Japan, the Asian Development Bank, France and United Nations agencies.

``Increases in ODA disbursements appear to have been fairly broad-based covering most types of project-related ODA, including infrastructure projects and technical assistance,'' said Edouard Wattez, U.N. resident co-ordinator in Hanoi.

``But greater effort is still needed by the donors and national and provincial authorities to further improve the equitable distribution of ODA to the poorest and most vulnerable in Vietnam, especially in rural areas,'' he said in the statement.

The statement said the share of ODA going to some of the poorest provinces had risen, but that more needed to be done. Hanoi's capacity to coordinate, absorb and deliver ODA inflows also needed strengthening, the UNDP said.

UNDP figures for the 1993-97 period showed disbursements in Vietnam as follows:
Year $ million
1997 : 1,015
1996 : 958
1995 : 596
1994 : 617
1993 : 274

Reuters - December 01, 1998.