These worries originated from the fact that lenders may cut down aid due to the global economic downturn, the slower disbursement of ODA-funded projects in Vietnam because of high inflation, and especially the PCI scandal.

The question is if the ODA commitment to Vietnam reduces in comparison to last year’s $5.4 billion level, is it a failure for ODA negotiators?

Yet, there were some signs that ODA commitment to Vietnam in 2009 would not fall.

WB and ADB preserve their commitments

Up until before the today’s CG Meeting in Hanoi, officials of the External Economic Agency, under the Ministry of Planning and Investment, were still having meetings with big donors, such as the World Bank (WB), the Asian Development Bank (ADB) and Japan.

These meetings focused on these donors’ commitments to Vietnam for next year, in the context of a global economic crisis.

Hoang Viet Khang, Vice Chief of the External Economic Agency, revealed that the WB and ADB’s policies would not change.

“We have contacted these two banks and know that their commitments to Vietnam in 2009 and 2010 would not reduce compared to previous years,” Khang said, without mentioning Japan’s commitment.

Meanwhile, the Acting Country Director of the WB, Martin Rama, said the WB still wants to maintain its commitment of approximately US $1 billion of ODA per year for Vietnam.

The WB also agreed to grant a credit worth $1.5 billion, with soft interest rates, in the next three years, and Vietnam is one of five developing countries that will be provided with non-interest rate capital from the WB in 2008.

Both the Vietnamese government and the WB are considering signing big deals in 2009, including a hydro-power development project worth $100 million, a recycled power development project of $150 million, and a project to ensure training quality at schools at $100 million.

The ADB’s moves also show the bank’s optimistic ODA commitment. The Vietnamese government has been shortlisted for some big projects signed with the ADB next year, including the $400 million Ca Mau power project and the belt road No.2 project in HCM City, worth $300 million.

A headache with PCI

However, many eyes are looking to Japan, the largest donor for Vietnam, which has been impacted by the PCI scandal, related to the East-West avenue project in HCM City.

Before the CG Meeting, Japanese representative agencies refused any interviews regarding this topic. Yet, the two governments setting up a joint committee to prevent corruption in ODA-funded projects and Vietnamese Prime Minister Nguyen Tan Dung’s attendance to the CG Meeting prove the seriousness of this case.

Chief Representative of the UK Department for International Development (DFID), Fiona Lappin, said the international community is keeping a close eye on this case. “For the PCI case, we support the Vietnamese Government in pursuing this case to the end and we will closely follow the situation and development of this case,” she said.

A senior official from the Ministry of Planning and Investment, who met with his Japanese counterparts in Hanoi, confirmed that he had a “headache” about this case before the CG Meeting.

Since international donors resumed ODA grants to Vietnam in November 1993, up to $22 billion of the total committed $42.5 billion of ODA has been disbursed.

Up until recently, Vietnam was considered one of the countries that most effectively uses ODA in the world, with the hunger and poverty rates falling from close to 58% in 1992 to approximately 15% last year.

Though Vietnam would become a country with a per capita income of $1,000 in 2010, a standard that would cut down ODA grants, at the present time, both the Vietnamese government and donors have many things to do.

According to Lapplin, donors’ ODA commitments for Vietnam would not be influenced much. “Donors realize that Vietnam still has a great demand for assistance from the outside. Moreover, policies can not be changed so quickly. We are discussing with colleagues to consider our assistance to Vietnam in the next few years,” she added. 
Source: Vietnamnet