by To Nhu & Minh Thi
HA NOI — The agricultural sector planned to attract US$300 million in Official Development Assistance (ODA) this year, a reduction of $37 million against last year, said Bui Ba Bong, Deputy Minister of Agriculture and Rural Development (MARD).
|This US$8.5million stone embankment by the Hieu River in Quang Tri Province was built using capital from the national target programme, ODA and State bonds. — VNA/VNS Photo Ho Cau
According to Luong The Phiet, head of the International Co-operation Department under MARD, the ODA coming into Viet Nam in general and the agricultural sector in particular had decreased since the country was officially recognised as a middle-income country in 2010.
As a result, developed countries and international organisations were less likely to offer aid, and would closely supervise the implementation of projects they did support, Phiet said.
Since the global economy went into recession, attracting ODA had become a much more difficult challenge, he added.
Le Van Minh, the department's former head said the target of attracting $300 million in ODA this year would be difficult to fulfil.
He cited the lack of an orientation plan for the mobilisation and use of ODA for agriculture, the uneven allocation of funds between localities and the lack of a professional unit to manage ODA as the main reasons.
According to Minh, the agricultural sector contributed around 8 per cent of the nation's GDP and provided jobs for 70 per cent of workers, so it regularly attracted large amounts of ODA.
There are around 200 agricultural projects implemented using ODA each year, but the scopes of these projects are different and the areas of implementation are largely concentrated in rural, mountainous areas and islands.
According to a MARD report, during the 2009-11 period, the ministry received an average of US$310 million of ODA, mostly from Japan, Australia and international organisations including the Asia Development Bank (ADB) and the International Fund for Agricultural Development.
Of the total funding, investment in irrigation made up 41.7 per cent while agricultural activities accounted for 32.2 per cent.
From 1993, non-refundable ODA in agriculture was also high compared to other sectors, totalling $50.4 billion. However, since July last year, Viet Nam has failed to attract more ODA projects in agriculture.
According to Tomoyuki Kimura, country director of the Asia Development Bank in Viet Nam, since 1993, ADB's assistance to the country's agriculture and natural resources sectors had amounted to $1.46 billion, a share of about 14.4 per cent of the cumulative lending amount.
"ADB will maintain our close engagement in the sector, focusing on rural development and infrastructure improvement, which will contribute to empowering the poor and other vulnerable groups," he said.
Kimura pointed out, however, that due to Viet Nam being classified as a low middle income country, the country's access to grants and concessional lending terms offered by the bank may become more limited in the medium term.
"This may impact on the type, scope, and coverage of our assistance as the government follows a policy that non-revenue generating projects such as rural development and natural resources management receive only concessional loans."
Another representative of major ODA providers, the Japanese Embassy said Japan would continue to provide comprehensive support through ODA with the aim of improving the livelihoods of Vietnamese people in rural areas.
To achieve this, Japan would need to consider the content and nature of its assistance, requiring an appropriate combination of technical assistance, grant aid and loans, added the embassy.
Vu Thi Bich Hop, director of the Centre for Sustainable Rural Development, an NGO, said the mobilisation of ODA was much dependent upon project development capacity, disbursement capacity and the quality of project management and supervision to ensure transparency and effective use of funding.
To boost ODA for agriculture, the roles of localities in proposing ODA development and management ideas should be raised, she added.
Hop also said that Government programmes and policies for agricultural and rural development such as the National Target Programme on new rural development would make it easier to attract ODA over the next few years. — VNS