Japan - Biggest ODA Donor

Combining trade, FDI and ODA, Japan ranks first in bilateral economic relations with Vietnam. Since 1995, Japan has become the biggest ODA donor in Vietnam, making up 30 per cent of the total commitment of all countries.

 

Japan started providing ODA to Vietnam in 1991. In 1991-2004, it totalled ¥1,108 billion, including loans of ¥967 billion, aid grants of ¥81.1 billion and technical cooperation of ¥60 billion.

 

In 2001-2003 in particular, as Japan cut its total ODA budget by 10 per cent, it still increased ODA for Vietnam. It showed Japan’s special attachment to Vietnam. Again in 2003, Japan cut 5.8 per cent from ODA to other countries, while ODA for Vietnam was still at ¥91.7 billion, just 1 per cent less than 2002. In 2002-2006, Japanese ODA for Vietnam was ¥479 billion (equivalent of US$4.1 billion). In 2007, Japan pledges to increase ODA to Vietnam at US$890 million.

 

Vietnam and Japan have reached agreement on long-term assistance programmes in five main areas: human resources and institution development; developing and upgrading transport and power projects; development of agriculture and rural infrastructure; development of education and training; and public health and environment protection. On June 2, 2004, Japan announced a new ODA policy to Vietnam with three objectives: boosting growth, improving living conditions and social welfare, and improving perfecting structure.

 

Japanese ODA for Vietnam has been the driving force for economic development and poverty reduction. It has helped develop communication and transport, energy, water conservancy and health. In industry, energy and electricity, over US$2.2 billion were provided to build important thermal and hydro power stations such as Pha Lai 2, Ham Thuan – Da Mi, Phu My 1 and to reactivate Da Nhim hydro power station.

 

Japanese ODA has contributed to the construction of key and projects of national pride in Vietnam such as Bai Chay bridge, Tan Son Nhat airport terminal, Saigon East-West highway, Hai Van mountain tunnel, thermal power plants in Pha Lai and Phu My, and water supply projects in Hanoi and Ho Chi Minh City.

 

In addition, the Japanese government has provided preferential loans and assistance for the development of social welfare, health and education. In 1971-1974, Japan granted ¥5 billion in aid to build Cho Ray Hospital and in 1991-1992, ¥2.5 billion additional aid to upgrade the equipment. In 1992-2003, Japanese government directly implemented 213 assistance projects to localities, building dozens of schools, upgrading equipment for remote hospitals and providing training facilities for the Transport College. In 2002-2006, the Japanese government assisted in 26 main projects, building primary and secondary schools, supplying medical equipment, upgrading infrastructure and training workers with a total of ¥213 million. In 2007, it assisted in three projects, including providing Braille printers for the blind.

 

Japanese FDI and assistance have contributed significantly to Vietnam’s economic development. Nonetheless, the PMU18 affair and the Can Tho bridge incident are shortcomings in the use of Japanese ODA. To reduce incidents, Vietnam is mobilizing social organizations in the overall management of ODA, improving project preparation and start-up, ensuring efficiency, removing hurdles, and protecting the environment and social welfare. Specifically, Vietnam is implementing consistent policy between the government and ODA donors, improving legal framework. It also accelerates the implementation of projects, increasing the responsibility of project owners and management boards. With those efforts, project implementation time can be reduced by 25 per cent.

 

Mr Izuki Ikuo, Japanese Consul General in Vietnam said, “Japan pursues ODA projects closely. We follow the efficiency of the projects to see how the lives of the local people are improved, to explain to Japanese taxpayers. We wish to join efforts to contribute more to the welfare of the local people and make ODA more efficient.