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Mr. Klaus Rohland |
The World Bank's country director for Vietnam was optimistic about foreign donors’ pledges of aid for Vietnam next year, but warned of the country’s slow rate of use of such aid.
Some 50 bilateral and multilateral donors are expected to announce their official development assistance (ODA) commitments for next year at the Consultative Group (CG) Meetings for Vietnam in Hanoi on Dec. 14-15.
The bank’s Country Director Klaus Rohland said there were “no signs” that the ODA would be less than last year’s record sum of US$3.748 billion.
However, Vietnam had spent just $1.8 billion, Rohland reminded, calling on the government to address the issue.
Slow disbursement meant slow implementation and the benefits were thus limited, he explained.
“The effectiveness must be the focus,” he stressed. “Donors want the process to be accelerated, not just the money to be spent faster.”
PMU-18 shadow
Rohland suggested that the slow ODA pace was partly due to a recent scandal at PMU-18, a road building unit which manages around US$2 billion meant for road construction and other infrastructure projects, sourced from public funds and overseas donors.
Several PMU-18 leaders were arrested and charged with embezzling millions of dollars for gambling on European football matches.
Haunted by the scandal, many agencies using ODA seemed afraid of responsibility and were therefore slow in using the funds, Rohland said.
In some cases the pace had been so sluggish that, when they were finally approved, the market prices quoted for materials and equipment had gone up.
“That has caused great harm,” Rohland said, asking Vietnamese ODA management agencies to be more “confident”.
A former deputy transport minister is under arrest and the minister had to resign after the PMU-18 scam was uncovered.
The bank had promised a report on this case by September, but could not deliver because it was “more complicated than previously thought,” Rohland admitted.
Open discussions
This year’s CG meeting will, for the first time, be attended by the Vietnamese prime minister rather than a deputy PM as in the past.
“This shows the importance that the Vietnamese government places on issues relating to international integration and cooperation with donors,” Rohland commented.
He quoted PM Nguyen Tan Dung as saying he wanted to listen to the donors and discuss issues they were interested in.
High on the meeting agenda this year is the implementation of Vietnam’s social and economic development plan for 2006-2010.
The meeting will also address Vietnam’s challenges in the next five years - including the implementation of integration commitments; reform of state-owned enterprises; infrastructure development; welfare policies; and anti-corruption and reforms in budget management.
The World Bank has forecast that Vietnam, a newly-admitted member of the World Trade Organization, would achieve 8 percent gross domestic product growth this year.
It said inflation was likely to be 7.5 percent.
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