Mid-term CG Meeting Featured by Corruption Fight

The scandal at PMU 18 (Project Management Unit 18) has aroused deep concerns among Vietnam's donors. Since the arrest of Nguyen Viet Tien, former deputy minister of transport, and Bui Tien Dung, former general director of PMU 18, due to their involvement in corruption of the building of roads and bridges, which use ODA capital, donors have asked the Vietnamese Government to take measures to put an immediate end to the situation.

Japanese ambassador to Vietnam Hittori said that Japan would co-operate with Vietnam to review projects using Japan's ODA. He said that as ODA capital came from tax of many Japanese people, so it was impossible to some individuals to embezzle it. Japan is the biggest ODA provider for Vietnam with a pledged figure of around US$1billion in 2005.

The second largest provider, the World Bank (WB), has announced that a WB delegation of auditors would arrive in Vietnam in June to investigate the implementation of WB-sponsored projects. Rakesh Nangia, WB portfolio and operation manager, said that during the inspection, if WB auditors find any evidence of financial mismanagement, the bank would demand the Vietnamese government return the loan in full, regardless of whether it has been disbursed or not.

Bella Bird, chief representative of the UK Department of International Development, said that donors would discuss corruption fight as a hot topic at a dialogue between them and the Vietnamese Government in Nha Trang on June 9 and 10, 2006. She said that donors wanted to promote co-operation with the Vietnamese Government to cope with corruption, making sure that all necessary measures would be taken to put an end to corruption and ODA embezzlement. State Inspectorate and State Auditing are the institutions to investigate carefully the organisation of ODA capital. Bird said that donors had been assured that inspectors and auditors would be present and perform their responsibility.

Bénédict de Cerja, Swiss ambassador to Vietnam, said that the PMU 18 scandal had aroused deep concerns among Vietnam's international donors. He went on to say he had realised that the Vietnamese Government had understood the issue that donors wanted it to fight corruption completely. The Vietnamese Government has understood present challenges, so it should define necessary policies and implement them. The Swiss ambassador said that international donors were waiting for signs of determination to fight corruption from the Vietnamese Government.

Le Dung, spokesman of the Vietnamese Ministry of Foreign Affairs, said: "The Vietnamese Government always welcomes and is ready to refer to inputs and comments of international donors. Vietnam's determination in the fight against corruption has been affirmed via an effort to track down of the corruption scandal at PMU 18. We believe that this will not impact on international donors' commitments for Vietnam."

Not until corruption was uncovered at the Ministry of Transport and PMU 18, has the Vietnamese Government become so determined to crack down corruption. This can be seen via the amendment and perfection of legal documents and a determination to create a perfect legal environment. After the Decree 20/CP issued in 1994, just one year after the Consultative Group Meeting, the Decree 87/CP issued in 1997 and the Decree 17/2001/ND-CP issued in 2001, the Vietnamese Government has issued top legal frame documents on the attraction, management and use of ODA.

Also, the Vietnamese Government has issued other legal documents on managing and supporting the State management of ODA. These documents include the regulations on ODA withdrawal, VAT and foreign experts of ODA-used projects.

On the other hand, as ODA capital is considered as a State budget source, under the Law on State Budget, the use of ODA capital should observe the regulations of Vietnam on procurement, investment and construction management in case that the regulations do not conflict with the international treaties Vietnam has signed or joined. Similarly, taxation procedures or the implementation of international treaties on ODA is within a framework of the Vietnamese law system.

Alongside the perfection of its legal environment, the Vietnamese Government has taken many measures to support ODA management. Accordingly, the Government has co-operated with international donors to organise conferences on ODA institutions and the management of ODA capital has been decentralised in all agencies, from the central to local levels. Also, the Government has provided guidelines on the attraction and use of ODA capital, VAT for ODA-used projects to settle obstacles to the implementation of the projects.

By late 2004, hundreds of ODA-used projects had been implemented with a total capital of US$21.19 billion, equal to 77.1 per cent of total pledged ODA. Total disbursed ODA from 1993 to 2004 reached US$14.116billion. At the same time, the implementation of ODA programmes and projects has witnessed a rapid progress, with a high year-on-year increase and good annual disbursement.

Many ODA projects have been completed and put into operation, making a contribution to Vietnam's socio-economic development and poverty reduction. Vietnam is promoting its co-operation with 29 bilateral donors and 19 multi-lateral partners and over 350 non-governmental organisations (NGOs). "Vietnam is a leader in terms of aid effectiveness," said a representative of UNDP at a signing ceremony of a country programme action plan (CPAP) between UNDP and the Vietnamese Government on May 9.

Over the past years, many ODA-used projects have been put into operation, making a contribution to Vietnam's economic development and poverty reduction. These include the Phu My 2-1 thermo-electric power plant, the Song Hinh hydro-electric power plant, some major roads, including national roads 5 and 1A and the My Thuan bridge. Also, many primary schools have been built and upgraded in provinces and cities alongside with hospitals, such as Bach Mai in Hanoi and Cho Ray in Ho Chi Minh City. Population and development, mother and child care programmes have been implemented effectively. According to some international donors, Vietnam's ODA disbursement has improved significantly, like other countries in the region.