ODA - an important source for development

PM Nguyen Tan Dung at a ceremony in Ha Noi on October 17 to mark the 20th anniversary of cooperation
between Viet Nam and international donors - Photo: VGP/Nhat Bac

Prime Minister Nguyen Tan Dung affirmed this at a meeting in Hanoi on October 17 to mark the 20th anniversary of development cooperation between Vietnam and donors.

PM Dung highly appreciated and sincerely thanked the Governments of donor countries, international organisations and international non-Governmental organisations (INGOs) for having provided a huge amount ODA funding to make it possible for Vietnam to grow from a poor and least developing country into a middle developing country at present.

He expressed his hope that Vietnam will continue receiving stronger and more effective assistance from donors to maintain its sustainable and prosperous growth.

At the meeting, Victoria Kwakwa, World Bank country director for Vietnam said a fundamental reason for the extraordinary success of Vietnam’s ODA partnership is the strong Government ownership of its development vision and agenda. Vietnam sought ideas, knowledge and even advice from development partners and then found ways to contextualise and adapt it in line with Vietnam’s own context.

Kwakwa added that despite Vietnam’s remarkable success, its development journey is far from over. Poverty reduction gains while impressive are still highly vulnerable to reversal. In equality both in access to economic opportunities and social services is growing and a source of concern in a society that places significant emphasis on equality. To achieve its longer term objective of becoming an industrialised economy, development partnerships will continue to be important and relevant for Vietnam going forward.

She reiterated the World Bank’s strong support for Vietnam’s continued efforts to establish new partnerships and find innovative and creative ways of cooperation.

Japanese Ambassador to Vietnam Hiroshi Fukada said since Japan resumed ODA loans in 1992, the country has constantly supported Vietnam’s socio-economic development. Japan’s ODA to Vietnam has surpassed US$20 billion.

He said now is the time to tackle challenges for more vigorous Vietnam. In order to help Vietnam address the challenges, Japan will utilise ODA that includes technical cooperation in economic restructuring and human resource development in addiiton to infrastructure development in the years to come.

Pratibha Mehta, UN Resident Cooridnator in Vietnam, said whilst recognising the dramatic progress Vietnam has made over the past two decades, the country still faces many challenges that continue to need strong support from international development partners.

Given Vietnam’s low Middle Incomes Status, not only will ODA contributions reduce but the way ODA is being provided will change. It is therefore necessary to review other development finance sources as well as new partnerships and build necessary capacity in this regard.

The UN is strongly committed to further supporting Vietnam in overcoming challenges to its development, Pratibha said.

ODA commitments for Vietnam over the past 20 years are vivid proof of donors’ support for the Government’s proper socio-economic development policy, which benefit people, especially poor people in rural, mountainous and ethnic minority areas. They have encouraged foreign investors to expand business and investment in Vietnam, with the contribution of foreign direct investment (FDI) to the country’s GDP rising considerably from 2% in 1992 to 18.9% in 2012.

Each year, donors provide around US$3 billion in ODA for Vietnam. The funding has helped Vietnam stabilise macroeconomy, especially since early 1990s when Vietnam decided to adjust economic growth models by restructuring State-owned enterprises, supporting the private economic sector, and reforming the financial and banking system.

ODA is an important source for Vietnam to improve the quality of social services, develop policy, reform and manage sectors, develop agriculture, reduce poverty, improve urban and rural environment, mitigate natural disasters and cope with climate change.