Vietnam's ODA Debts under Control, Foreign Experts

Vietnam's official development assistance (ODA) debts are stable at a safe level and are under control, according to assessment by the World Bank (WB), the International Monetary Fund (IMF) and other donors.

 

Duong Duc Ung, a senior advisor for the Ministry of Planning and Investment said that the country’s ODA debt indicators in comparison with GDP, export revenues and debt services are all below the international standard.

 

At present, Vietnam’s ODA accounts for 17 per cent of state budget investment and 11 per cent of total social investment, which is much less than those of other developing nations, he said.

 

According to the Ministry of Finance, Vietnam has been paying debts on time. The country began paying ODA debts, including principal and interests from 2002, ten years after the first ODA agreements were signed.

 

Vietnam has improved much of its debt management capacity and escaped the list of heavy-indebted poor countries, international donors said. Vietnam is estimated to need some US$10. 9 billion ODA in the 2006-2010 period to achieve socio-economic goals, a source from the Finance Ministry said.

 

Added to its current ODA outstanding balance, Vietnam's ODA debts would remain manageable and the country will be able to borrow more, Ung said. However, many ODA-funded projects have been implemented behind schedule, Ung said, pointing out that the Asian Development Bank had only one project finished on time in terms of capital disbursement and implementation.

 

The delay in implementing many projects using ODA in Vietnam is due to sluggish site clearance and compensation.

 

Vietnam is now one of the world’s biggest ODA country recipients. International donors pledged a record amount of US$3.748 billion in ODA to the country for 2006, much higher than loans of US$3.438 billion pledged last year.

 

As estimated, the country will have to spend between US$10 billion and US$11 billion to settle foreign debts in the next five years, equivalent to 6-7 per cent of the country’s total export turnover in the period.