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VN using aid effectively despite controversy

Update: June, 11/2012 - 09:21

Denmark's temporary suspension of funding for three Official Development Assistance projects in Viet Nam has caused a controversy. Viet Nam News Agency reporters spoke with the investment minister and two representatives of ODA donors about the issue.

Bui Quang Vinh, Minister of Planning and Investment


Bui Quang Vinh
Viet Nam is still on the international donors' list of countries that use ODA effectively. As a result, the ODA for Viet Nam is still high despite the fact that Viet Nam is approaching the middle-income level. For example, Japan is still the top ODA donor to Viet Nam after the ODA-related corruption scandal in 2008 was thoroughly solved.

However, ODA disbursement is still low. We will try to solve this in the coming time. The Government is working on a series of solutions for this issue and holding discussions on how to better prepare capital, site clearance and resettlement for these projects. Site clearance for ODA projects has been slow lately, causing some problems. Another issue is management of ODA. We will enhance management capacity as well as ensure the transparency of management staff.

I have not received official information about the recent incident at Danish ODA projects. But I am sure that the case will be clear soon, and if there was any wrongdoing, we will strictly punish the people responsible.

Victoria Kwakwa, World Bank Country Director for Viet Nam


Victoria Kwakwa
The World Bank has been in partnership with Viet Nam for quite a while. We engaged with Viet Nam in 1993 and since then, we have provided a lot of ODA support to the country.

Every time we finance a project and it's completed, we have an independent evaluation of the completion report and assess if it is satisfactory or unsatisfactory in terms of outcomes. Of all the projects that have been finished, the ratings are moderately satisfactory or better. So we haven't so far had any project that have been rated by independent assessment as unsatisfactory. I would say, humbly, that overall the ODA support we provided has been used effectively and helped Viet Nam's development.

We do get complaints about fraudulent activities on projects we finance. When we receive these complaints, we have a department of institutional integrity and all these complaints go automatically to the department. There's an anonymous hot-line. They are all taken seriously and they decide which complaints need to be investigated. So we do have a mechanism for dealing with complaints.

I think another thing that would help is a lot more transparency with projects. So whatever the project is, have a website or find a way to put the information out there and the project's components and who is going to benefit.

Also, I think the Government has to move to e-procurement. This will also help because you will do it online. It's in the public domain so you can publish the resources and everything.

All of these factors will help. Improving transparency helps in managing the projects so more transparency is going to be important. I think ensuring beneficiaries have a stronger voice and monitoring the impact of the project are also two important factors.

All of these will help in reducing incidents of misuse of ODA – not just ODA, but even Governmental resources, which are much larger than ODA. So both resources must be used well and we should not focus only on ODA. When both resources are used well it will bring about good outcomes.

Tsuno Motonori, Chief representative of the Japan International Co-operation Agency in Viet Nam


Tsuno Motonori
2012 is the 20th anniversary of the start of Japan's ODA in Viet Nam. Through these ODA loans, we have mainly supported infrastructure development, particularly in transport and power. I can say that all the completed projects with our support are greatly contributing to Viet Nam's economic growth. Viet Nam is one of the most successful countries which we support. We focus on hard infrastructure with ODA loans and soft infrastructure with technical co-operation. Japan is now the main donor for large-scale infrastructure projects in Viet Nam and I believe this combination has contributed very much to the development of Viet Nam.

But of course there are many difficulties in the process of implementation, particularly in large-scale infrastructure projects, such as land clearance, resettlement for people and replacement of transmission lines on the site. So in order to smoothly implement this kind of project, we need the support of all stakeholders, all parties including local people, People's Committees and organisations. In order to have co-ordinated co-operation, the Government should carefully prepare and design the project from the beginning. And they need to have better support and ensure understanding among the people and concerned parties. So from the very beginning, infrastructure projects must be set out in a master plan.

Corruption or misuse of projects are very common concerns of donors. Japan is also concerned about this. We want to support the efforts of the Government to tackle this problem. We had the PCI corruption case in 2008. Because of that case, we had to suspend new ODA loans in Viet Nam. It was a very bad experience. Both Vietnamese and Japanese people were very much concerned about the issue. Both Governments had to make efforts to agree on measures to avoid this kind of problem again. For that purpose, we established a joint committee on fighting corruption in Japan's ODA projects. We agreed to review all the procedures and measures to enhance transparency and auditing. Finally we decided to resume ODA loans after suspending them for six months. Based on this experience, we hope the Vietnamese Government would enhance efforts to better manage ODA.

There are also other aspects. We've received many complaints from contractors about delayed payment due to troublesome procedures. Some contractors complained to me that in many cases, the examination of documents takes a long time. In other countries, for example the Philippines, Indonesia and the emerging economy of Myanmar, they do not have such complicated procedures and too much burdens. Viet Nam's auditing procedures need to be faster and more in line with international standards as well as more transparent to the contractors. So it's very important to avoid unnecessary delays in order to better manage ODA.

Viet Nam is still a good destination for Japanese investors, but the country should further improve the investment environment in order to continue being competitive with other regional countries such as Indonesia, India and in the future Myanmar. Now Japanese companies are rushing to Myanmar due to its openness in policies, saying that it's easier to do business in Myanmar than Viet Nam. — VNS

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