Determined to Raise Usage Efficiency of Japan’s ODA

In 1991, Japan re-granted ODA to Vietnam. During the past 20 years, even in the most difficult period, Japan has always topped the list of bilateral donors for Vietnam. Between 1992 and 2003, Japan’s ODA to Vietnam reached some US$8.7 billion, which accounts for 30 percent of total ODA committed by the global community to Vietnam, among which, non-refundable assistance is about US$1.2 billion. 

 

In fiscal year of 2007, Vietnam received a total ODA amount of US$640 million, US$18 million of which was non-refundable assistance, US$74 million of which in the form of technical co-operation and US$548 million of which, ODA loans. In 2008, Japan’s economy was challenged with numerous of difficulties. While the volume of ODA granted by Japan to the world generally decreased, the amount pledged for Vietnam still amounted to US$1.1 billion. On 31 March 2009, the ODA committed by the global community for Vietnam in fiscal year of 2008 was raised to US$6 billion (compared to US$5 billion of fiscal year 2007) with US$900 million being verified and signed. With this figure, the amount of Japan’s ODA to Vietnam hit the record high in 2008. Despite economic recession in 2009, Japan still granted Vietnam US$1.5 billion. In 2010, this figure reached US$1.8 billion. And now, though being challenged with the recent earthquake and tsunami disasters, its commitment remains unchanged. In 2011, the pledged aid put forward by the Japanese Government at the Consultative Group (CG) meeting at the end of the previous year was US$1.76 billion.

 

In June 2011, the Japanese Government signed the diplomatic note on exchanging the first preferential credit of fiscal year 2011 of ¥40.946 billion (equivalent to US$508 million) for Vietnam. This amount helps the Government of Vietnam fund the implementation of two programmes, including North – South Expressway (Ho Chi Minh – Dau Giay) and North – South Expressway (Da Nang – Quang Ngai). The Ministry of Planning and Investment reveals that the Japanese Government, through Japanese Ministry of Foreign Affairs and Japanese Embassy in Vietnam, has prepared a written document affirming its continued ODA grant for Vietnam and the position of being the largest bilateral ODA donor. This means the ODA volume of ¥150 billion (over US$1.8 billion) of fiscal year 2010 will continue to be expedited in 2011.

 

A look at the movement of Japan’s ODA to Vietnam shows that despite ups and downs, the ODA seems to be on an upward trend in terms of both quantity and quality. Since 2007, the ODA offered by Japan has mainly focused on the three top priority areas as follows: to boost economic growth, to improve living standards and social areas, and to improve institutions and legal systems. These three areas are in line with targets set by the Vietnamese Government in the hunger eradication, poverty reduction and development plan.

 

Through ODA funding, Japan has assisted Vietnam in building many socio-economic infrastructure works. Some works include: Bai Chay Bridge, the new international airport terminal Tan Son Nhat, East West Saigon expressway, Hai Van tunnel, Pha Lai thermoelectricity plant, Phu My thermoelectricity plant, and water and environment improvement projects in Hanoi and Ho Chi Minh. In addition, through ODA sources, Japan has also provided a significant number of scholarships for education at university and post-university level for students and scientific – technical officers of Vietnam. A large number of Japanese experts and volunteers are supporting Vietnam in many areas such as economic, social, cultural, education and training development. Particularly, Japan has provided help to Vietnam in a lot of co-operation initiatives within ASEAN, ASEM, and Greater Mekong Subregion frameworks. 

 

Assessing the efficiency of Vietnam’s ODA usage, Mr Motonori Tsuno, Chief Representative of the Japan International Cooperation Agency (JICA), states that Vietnam’s Government has used ODA granted by Japan very effectively. Since its re-granting of ODA, a lot of transport, electricity, environment and rural development works have been completed and exceeded Japan’s expectations. In Vietnam, ODA loans and technical assistance are combined consistently and brought good results.

 

According to Vietnam-stationed Japanese Ambassador Yasuaki Tanizaki, Vietnam’s economy has recently witnessed great progress, through which the significant impacts on Vietnam’s economic growth of assistance donated by the Japanese Government, and direct investments by Japanese, can be seen. Mr Yasuaki Tanizaki affirms, “Vietnam has recently faced quite a few challenges from global economic fluctuations. However, the Vietnamese Government has made great endeavours in controlling inflation, stabilizing the macro economy and guaranteeing social welfare. I believe that such policies will continue to bear good fruits, and this means ODA loans will be used more and more effectively.”

In response to the belief and expectations of the Japanese Government, at the signing ceremony of the diplomatic note on exchanging the first preferential credit package of fiscal year 2011 for Vietnam, former Minister of Planning and Investment Vo Hong Phuc asserted, “Vietnam always appreciates every Yen of ODA Japan grants to Vietnam. Vietnam’s Government will make more efforts with a view to boosting disbursement speed and improving usage efficiency of this valuable fund.”