Vietnam is speeding up process to disburse USD2.15bn in ODA in 2016 as the World Bank and Asian Development Bank will stop providing ODA to the country.
The World Bank and Asian Development Bank will stop providing ODA to Vietnam
The Department of Debt Management and External Finance under the Ministry of Finance reported that by the end of 2015, the amount of registered ODA that has not been disbursed had reached USD22bn.
Hoang Hai, deputy head of the Department of Debt Management and External Finance said they had been co-operating with the Ministry of Planning and Investment to speed up the disbursement process.
"We’ve been listening to local authorities and investors to understand their problems," he said. "The most important task is to simplify administrative processes so that we'll have a clear financial mechanism for it when the project is still only in its concept stages. When the project is approved, its capital can be disbursed immediately."
This way, Vietnam can reduce opportunity cost as well as the waste of resources. Hai noted that there was always a difference between promised capital and the actual disbursed money.
In the recent years, Vietnam was able to disburse USD5bn of ODA and preferential loans annually.
Meanwhile, Mai Tien Dung from the Government Office said Vietnam must disburse USD2.15bn this year, with the remainder gradually disbursed until 2020.
Until now, Vietnam has depended on ODA for repaying debts. However, ODA and preferential loans for Vietnam have decreased since it became a middle income country. The World Bank plans to stop providing ODA for Vietnam from July 2017, while the Asian Development Bank will do the same from January 2019.
