Belgium - Important ODA Donor of Vietnam

In 2004-2006 fiscal year, the number of official development assistance (ODA) capital beneficiary countries of Belgium was cut from 25 to 18 and Vietnam is the only country in Asia to enjoy ODA from Belgium.

 

So far, Belgium has committed to provide Vietnam US$110 million in non-refundable aid, via bilateral and multilateral agreements and non-governmental organisations (NGOs). Of the figure, since 1994, total value of non-refundable aid of the Belgian Government via the bilateral channel has reached US$85 million. Even in years of economic difficulties, Belgium’s ODA for Vietnam remained high.

 

Belgium’s aid mainly concentrates in rural development, accounting for 27 per cent; human resources development with 20 per cent, social development with 12 per cent, energy with nine per cent, forestry and fisheries with eight per cent and health care with seven per cent. Belgian-developed projects are small-sized (valued at less than EUR 10 million) but effective and suitable with Vietnam’s socio-economic development orientations.

 

Belgium’s non-refundable aid is negotiable for each period of between two and three years. The fields for Vietnam-Belgium co-operation include rural development, poverty reduction in mountainous areas, education and training, health care, capability building and environment. Belgian-developed projects combine with poverty reduction targets and they are suitable with capability of beneficiary units.

 

The Vietnamese and Belgian governments are preparing a co-operative programme for the 2007-2010 period. Accordingly, the Belgian Government will concentrate on prioritised targets of Vietnam, mainly in rural development including education and health care, and poverty reduction-related environment fields such as water supply and waste treatment. However, Belgium may concentrate on one or two provinces in the Mekong delta.

 

Apart from bilateral channels, Belgium and Vietnam have developed co-operative ties via universities and regional co-operation with Wallonie and Brussels, the Belgian French speaking community and the Belgian Dutch speaking communities and NGOs, as well as multilateral agreements. Total ODA capital provided by Belgium via the channels is put at US$5 million per annum. These projects have made a significant contribution to higher education development and capacity building of research institutes of Vietnam, and the development of economic, technical and cultural co-operation between the two countries.

 

Since 1993, the Vietnamese and Belgian governments have signed agreements on preferential credits, valued at around US$80 million.

 

The Belgian Government provides Vietnam with conditioned preferential credits, aiming at helping Vietnam’s economic development and Belgian enterprises’ export with a ratio of between 40-45 per cent and between 55 and 60 per cent, respectively. So far, preferential credits of Belgium have mainly been used in non-commercial fields, including electricity, environment and health care. Projects developed with preferential credits of Belgium have high technology transfer content and are effective.

In terms of mixed credit, the Belgian Government has committed to provide Vietnam US$9 million with a 0 per cent interest rate. Belgium has provided Super subsidy credits to help Belgian enterprises, mainly operating in environment and electricity.

 

Since 1993, the Belgian Government has written off debts for Vietnam for three times. The first time was in 1992 with US$32 million. The second time was in 1993 with US$13 million, and the third time, in 2000, with a total of US$32 million. Of the figure, 75 per cent was written off while 25 per cent was converted into non-refundable aid.

Belgium has focused on not only developing ties with Vietnam but also helping the country strengthening its ties with the EU.

 

Fiscal year	Amount (Mln euro)	Type of projects	Written off debts (Million euro)
1993 - 1995	11.1	Agriculture and rural development, education and training, health care and environment	7.5
1996 - 1998	13.6	Administrative reform, agriculture, and infrastructure development	-
2001- 2003	22.3	Rural development, environment, natural disaster prevention in Hoa Binh, Ninh Thuan, Binh Thuan, Phu Yen, Binh Dinh and Khanh Hoa.	34.6 (including converted debts)
2004 - 2006	19.6	Household credit, environment, education, administrative reform, poverty reduction, textile and garment	-