95 percent of the completed projects rated successful
ADB Country Director in Vietnam, Ayumi Konishi, says the ADB-funded projects have helped Vietnam achieve its rapid economic growth and gradually reduce poverty. Vietnam is one of a few countries which has successfully combined economic growth and poverty reduction, Ayumi adds.
Slow progress
Ayumi notes that most of the projects have been carried out successfully despite long delays. If they were completed as scheduled they would bring more benefits to citizens. On account of runaway inflation, input costs will be higher and need to scale down at certain level, Ayumi says.
Another reason is the division of projects into small packages that often leads to losses. In Vietnam, most projects are slow-paced at the initial stage due to the lack of capital. Barely US$1 billion out of the total US$6 billion amount is disbursed in three years more or less. Therefore, Vietnam finds itself in a fix.
How to use ODA efficiently
Vietnam will face a number of challenges when becoming a middle income country. ADB is willing to work closely with Vietnam to iron out snags as often seen in middle income countries, Ayumi says.
He insists that Vietnam should find ways to mobilise and use ODA to its advantage.
In his opinion, Vietnam should improve its legal system in the first place. In 2009, ADB approved a plan to help Vietnam mobilise capital from foreign private banks. However, the transaction process has not been implemented for lack of liability to make necessary adjustment. This is just a case in point.
The 44th annual meeting of the ADB which will take place in Hanoi from May 3-6, will provide a good opportunity for Vietnam to prove its progression into a middle income country to the whole world.