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THE PRIME MINISTER
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THE SOCIALIST REPUBLIC OF VIETNAM
Independence– Freedom – Happiness
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No. 106/QD-TTg
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Hanoi, January 19, 2012
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DECISION
APPROVING THE
SCHEME ON ORIENTATIONS FOR ATTRACTION, MANAGEMENT AND USE OF OFFICIAL DEVELOPMENT
ASSISTANCE AND OTHER PREFERENTIAL LOANS OF DONORS DURING 2011-2015
THE PRIME MINISTER
Pursuant to the December 25, 2001 Law on Organization of
the Government;
Pursuant to the Government's Decree No. 131/2006/ND-CP of
November 9. 2006, promulgating the Regulation on management and use of official
development assistance;
At the proposal of the Minister of Planning and
Investment,
DECIDES:
Article 1. To approve the
scheme on orientations for attraction, management and use of official
development assistance and other preferential loans of donors during 2011 -2015
(attached to this Decision).
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Article 3. This Decision
takes effect on the date of its signing.
Article 4. Ministers,
heads of ministerial-level agencies, heads of government-attached agencies, and
chairpersons of provincial-level People’s Committees shall implement this Decision.
PRIME MINISTER
Nguyen Tan Dung
SCHEME
ON
ORIENTATIONS FOR ATTRACTION, MANAGEMENT AND USE OF OFFICIAL DEVELOPMENT
ASSISTANCE AND OTHER PREFERENTIAL LOANS OF DONORS DURING 2011-2015
(Promulgated together with the Prime Minister's Decision No. 106/QD-TTg of
January 19, 2012)
FOREWORD
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These
development achievements are attributable to the Party and State's judicious
socio-economic development lines and policies, the great efforts of all the
people, sectors and administrations at all levels, and the advocate and support
of international friends.
At
present, over 50 bilateral and multilateral development partners have been
actively assisting Vietnam in carrying out the renewal and reform in the
process of transition to a market economy, performing the socio-economic
development tasks and realizing sustainable hunger eradication and poverty
alleviation.
The
XIth National Congress of the Communist Party of Vietnam adopted the
2011-2020 ten-year socio-economic development strategy, setting forth the
objective of turning Vietnam into a modernity-oriented industrial country by
2020. At its 2th session, the XIIIth National Assembly of
the Socialist Republic of Vietnam approved the 2011-2015 five-year
socio-economic development plan.
To
successfully realize the 2011-2020 ten-year socio-economic development strategy
and the 2011-2015 five-year socio-economic development plan, while considering
bringing into full play its internal strengths a main solution. Vietnam will
continue to mobilize to the utmost all domestic and overseas capital sources,
including official development assistance (ODA) and other preferential loans of
donors as important sources, and commit to using these capital sources with the
highest effectiveness.
The
Government's scheme on orientations for attraction, use and management of ODA and
other preferential loans of donors during 2011-2015 conveys Vietnam's policies
on attraction, management and efficient use of ODA and other preferential loans
of donors in a new context that Vietnam has become a lower middle income
developing country.
The
scheme on orientations for attraction, management and use of ODA and other
preferential loans of donors during 2011-2015 has been elaborated on the
following grounds:
1.
The 2011-2020 ten-year socio-economic development strategy.
2.
The 2011-2020 public debt management strategy.
3.
The 2011-2015 five-year socio-economic development plan.
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5.
Results of and experience learned from the implementation of the scheme on
orientations for attraction and use of ODA during 2006-2010, the principles for
improving aid effectiveness set out in the 2005 Paris Declaration, the 2005
Hanoi Core Statement on Aid Effectiveness and commitments made at the 4"1
High Level Forum on Aid Effectiveness in Busan (the Republic of Korea) (2011).
6.
Opinions contributed by agencies that manage, implement and benefit from ODA.
the private sector, organizations, mass organizations and trade associations of
Vietnam, development partners and some foreign non-governmental organizations
in the course of elaboration of the scheme.
Part I
NECESSITY,
OBJECTIVES AND SCOPE OF THE SCHEME
I. NECESSITY OF THE SCHEME
The
scheme on orientations for attraction and use of ODA during 2006-2010 has
actively and effectively contributed to the realization of (he objectives set
forth in the 2006-2010 five-year socio-economic development plan. However,
during 2011-2015, the attraction, management and use of ODA need some policy and
institutional changes to make them suitable to the new context of development,
especially when Vietnam has become a lower middle income country.
Therefore,
to mobilize and effectively use capital sources of donors to support the
realization of the objectives set forth in the 2011-2020 ten-year
socio-economic development strategy and the 2011-2015 five-year socio-economic
development plan, it is necessary to elaborate a scheme on orientations for
attraction, management and use of ODA and other preferential loans of donors
during 2011-2015 (below referred to as the 2011-2015 scheme) in order to
orientate policies and adopt measures to assure the mobi-lization and effective
use of these capital sources.
II. OBJECTIVES OF THE SCHEME
The
2011-2015 scheme is a document expressing the Government's policies to
concretize the Party's and the Slate's under-takings and line for the
attraction, management and use of ODA and preferential loans of donors (below
referred to as ODA and preferential loans) in a new context that Vietnam has
become a lower middle income developing country.
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This
scheme serves as a basis for donors to make development cooperation policies;
and formulate strategies and programs to provide ODA and preferential loans for
Vietnam. It also publicizes the Vietnamese Government's policies on attraction,
management and use of these capital sources to the public at home and abroad.
III. SCOPE OF THE SCHEME
The
scope of the 2011-2015 scheme covers activities related to the attraction,
management and use of ODA and preferential loans' provided by foreign
governments, bilateral aid organizations and transnational or
intergovernmental organizations to the State or the Government of the Socialist
Republic of Vietnam.
IV. CONTENTS OF THE SCHEME
The
2011-2015 scheme consists of three parts:
-
Part I: Necessity, objectives and scope of the scheme.
-
Part II: Evaluation of implementation of the contents of the scheme on
orientations for attraction and use of official development assistance during
2006-2010.
-
Part III: Attraction, management and use of ODA and other preferential loans of
donors during 2011-2015.
The
plan of action for implementation of the 2011 -2015 scheme constitutes part of
the scheme.
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EVALUATION
OF IMPLEMENTATION OF THE CONTENTS OF THE SCHEME ON ORIENTATIONS FOR ATTRACTION
AND USE OF OFFICIAL DEVELOPMENT ASSISTANCE DURING 2006-2010
I. MAJOR RESULTS
The
scheme on orientations for attraction and use of official development
assistance during 2006-2010 (below referred to as the 2006-2010 ODA scheme) was
promulgated under the Prime Minister's Decision No. 290/2006/QD-TTg of December
29, 2006, and has been successfully implemented, importantly contributing to
the successful implementation of the 2006-2010 five-year socio-economic
development plan as well as the 2001-2010 ten-year socio-economic development
strategy.
Results
of implementation of the contents of the 2006-2010 ODA scheme include:
1.
The development cooperation relationship between Vietnam and the donor community
has been further strengthened and developed, which can be seen in the following
aspects:
a/
The ODA commitment, signing and disbursement during 2006-2010 saw positive
progresses
-
ODA commitment
Through
five annual conferences of the donor consultative group for Vietnam (CG
conferences), the total ODA capital committed by donors during 2006-2010
reached over USD 31.76 billion, 15% higher than the target set forth in the
2006-2010 ODA scheme. This high committed ODA level, especially in the context
that some donors are also encountering economic difficulties and the demand for
this capital source is strongly growing in the world, is an evidence of
advocate and strong political support of the international community for the
cause of renewal and judicious development policies of the Party and State of
Vietnam as well as the donor trust in the effectiveness of ODA receipt and use
by Vietnam.
-
Conclusion of specific ODA international agreements
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-ODA
disbursement
Fully
aware that committed ODA only demonstrates the political support and only the
disbursement of this capital source can promote the creation of specific
socio-economic works and products for the national development and the
development of ministries, sectors and localities, all sectors and
administration levels have exerted numerous efforts to speed up the ODA
implementation and disbursement.
During
2006-2010, the total disbursed ODA capital reached USD 13.86 billion, equal lo
67.25% of the signed ODA and 11 % higher than the target set forth in the
2006-2010 ODA scheme. Though the ODA disbursement level has seen certain
improvements in the recent years, to some donors it is still low compared
to-the regional and international average.
Table
1 below shows the ODA commitment, signing and disbursement during 2006-2010:
Table 1: ODA capital commitment, signing and disbursement
during 2006-2010
b/
The structure of signed ODA capital is basically suitable to the Government's
priority orientations for the 2006-2010 period
Table
2 below shows that ODA for such sectors as energy and industry, transport
development, communications and urban water supply and drainage reached higher
levels in relative value and approximated the target set forth in the 2006-2010
ODA scheme in absolute value. Particularly, ODA for agriculture and rural
development, health, education, etc was 3-5% lower than expected.
2.
The ODA capital source has importantly contributed to the national financial
balance, especially in the last years of the 2006-2010 period when Vietnam's
economy was adversely impacted by the global economic recession.
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Table 2: Structure of signed ODA by sector and field during
2006-2010
Sector and field
Expected ODA signed during 2006-2010
under the scheme
ODA signed during 2006-2010
Expected ODA structure
Total ODA (billion USD)
ODA structure
Total ODA (billion USD)
1.
Agriculture, irrigation, forestry and fisheries combined with agricultural
and rural development, hunger eradication and poverty alleviation
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4.27-4.98
16.21%
3.34%
2.
Energy and industry
15%
3.05 - 3.56
18.97%
3.91%
3.
Transport, post and telecommunications, urban water supply and drainage
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6.72 - 7.84
36.78%
7.58
4.
Health, education and training, environment, science and technology, and
other sectors (including institution and capacity building)
31%
6.31 -7.37
28.04%
5.78%
Total
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20.35-23.75
100%
20.61
Source:
Ministry of Planning and Investment, 2010 remain limited, this source is very
precious for development investment in public-utility sectors to provide
people, especially the poor in rural and urban areas, with more and more
essential public services (health, education, daily-life water supply,
improvement of transport conditions) of higher quality and at more competitive
charge rates.
3.
ODA has importantly contributed to the development of the system of policies
and laws and the building of institutions to serve Vietnam's renewal and
reforms in the transition to a market economy and international integration.
ODA
capital implemented during 2006-2010, largely non-refundable aid, has been used
for providing services of consultancy on development of policies in many areas,
such as macro-economy, reform of the financial and banking systems and stale
enterprises, development of small- and medium-sized enterprises, assistance for
international economic integration, elaboration of laws and sub-law documents
in different fields (land administration, commercial development, bidding,
construction, public debt management).
ODA
has importantly contributed to raising the quality of Vietnam's legal system.
The integration and pilot implementation of a number of policies and
institutions within the framework of ODA-funded infrastructure development
programs and projects have contributed to the sustainable development of this
sector under the market mechanism.
4.
The ODA capital source has supported the development of many socio-economic infrastructure
sectors and fields
a/
Agricultural and rural development combined with hunger eradication and poverty
alleviation
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ODA
capital disbursed for agriculture and rural development combined with hunger
eradication and poverty alleviation reached USD 2.65 billion, equal to 21.76%
of the total ODA value disbursed for the whole country and equal to 79.34% of
signed ODA for this sector.
ODA
has contributed to the hunger eradication and poverty alleviation for rural
people, thereby contributing to the realization of Vietnam's commitments on the
United Nations' millennium development goal of reducing by 50% hungry and poor
households by 2015.
b/
Energy and industry
During
2006-2010, signed ODA capital for energy and industry reached around USD 3.91
billion, accounting for 18.97% of the total ODA signed during this period, and
was concentrated on supporting the development of electricity sources (building
of thermal power and hydropower plants); power transmission and distribution
networks, especially in rural, mountainous, deep-lying and remote areas and
areas inhabited by ethnical minority people; renewable and green energies
(solar power and wind power) and energy conservation and efficiency.
ODA
disbursed for this sector reached USD 2.12 billion, equal to 17.4% of the total
ODA value disbursed for the whole country and equal to 54.22% of signed ODA for
this sector.
ODA
has contributed to increasing the output and quality of electricity supplied
for production and people's life, building a power sector operating under the
market mechanism and enhancing the sector management capacity.
c/
Transport, post and telecommunications, and urban water supply and drainage
During
2006-2010, total signed ODA capital for the development of transport, post and
telecommunications, and urban water supply and drainage reached USD 7.58
billion, accounting for the largest portion (36.78%) in the ODA structure in
this period. The total disbursed ODA reached USD 3.31 billion, equal to 27.19%
of the total ODA value disbursed for the whole country and equal to 43.66% of
signed ODA for these sectors.
In
the transport sector. ODA capital has been concentrated on the development and
upgrading of the system of national highways, building of a number of seaports,
consolidation and reinforcement of railway and international airport
infrastructure facilities, building of urban traffic infrastructure in some
major cities and development of rural transport. Besides, ODA has helped step
up the planning of transport development, building of sector management
capacity as well as improvement of awareness and education about laws and
traffic safety in the entire society.
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ODA
capital has been used for urban development, water supply and drainage,
environmental sanitation and improvement of living conditions in poor areas in
cities and towns throughout the country.
d/
Health, education and training, environment, science and technology and other
sectors
During
2006-2010, signed ODA for these sectors reached USD 5.78 billion, accounting
for 28.04% of the total signed ODA value of the whole country; the total
disbursed ODA capital reached USD 4.1 billion, equal to 33.657c of the total
ODA capital disbursed during this period. The disbursed ODA was equal to 70.93%
of the signed ODA.
In
the health sector, ODA capital was used to supply more medical equipment and
instruments to a number of provincial-level and regional hospitals in order to
lessen the workload on central hospitals: develop the public health care
network in all areas, especially poor rural and mountainous areas meeting with
great difficulties; support the fulfillment of the millennium development
goals in the health sector, such as promotion of population and family planning
work, reduction of child mortality and malnutrition rates, HIV/AIDS prevention
and control: and assist the formulation of policies and building of the sector
management capacity.
In
the education and training sector, ODA capital was used to support the reform
of primary education to tertiary education, with a view to raising education
quality and reaching advanced education and training standards in the world,
and grant overseas training scholarships. In the last years of the 2006-2010
period, ODA loans were mobilized for building a number of
international-standard universities to develop high-level human resources.
In
the environment sector, ODA capital was used for the management of natural
resources and natural disaster risks, afforestation and management of water
sources, and improve-ment of the environment in cities, concentrated
residential areas and industrial parks. Especially, to surmount the challenges
of the global climate change, ODA has been mobilized to support the implementation
of the national target program on response to climate change.
In
the course of implementation of ODA programs and projects, many advanced management
experiences and scientific and technological advances have been transferred, popularized
and widely applied, especially in the sectors of construction, transport,
irrigation, industry', electricity, agricultural and rural development, health,
education, public administrative reform, raising of competitiveness and
international integration.
In
addition, ODA capital has been used directly or integrated into programs or
projects on such long-term issues as gender equality and women advancement,
social security policies, etc.
5.
The ODA capital source has supported the development of localities
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ODA
attracted to poor provinces which meet economic difficulties and often suffer
consequences of natural disasters has considerably increased thanks to the
enhanced aid coordination of the Government as well as efforts of ministries,
sectors and localities. Compared lo the 2001-2005 period, the per-capita ODA
capital level in the 2006-2010 period markedly increased in most of these
regions-. However, the results of ODA attraction still varied and remained
uneven among different localities in the same region and among different
regions. Particularly, the Central Highlands saw no remarkable increase in
per-capita ODA capital level over that of the 2001-2005 period. At the same
time, some regions and localities (some provinces in the Central Highlands and
eastern South Vietnam) had a per-capita ODA level lower than the national
average (see Table 3: signed ODA by region and territory in the 2006-2010
period).
Table 3: Signed ODA by region and territory in the
2006-2010 period
Region
Total ODA (million USD)
Per-capita ODA (USD/person)
Proportion to the whole country's
ODA (%)
Red
River delta:
-
Excluding Hanoi
-
Includinu Hanoi
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130.50 233.62
1 1.47% 22.03%
Northern
midland and mountainous regions
624.57
56.60
3.03%
Northern
Central Vietnam and central coast
1.922.23
102.24
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Central
Highlands
110.05
21.85
0.53%
Eastern
South Vietnam:
-
Excluding Ho Chi Minh City
-
Including Ho Chi Minh City
505.22 1.542.52
41.39 112.70
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Mekong
River delta
1,003.08
58.58
4.87%
Inter-regions
11,503
Localities being indirect
beneficiaries
55.81%
Source:
Ministry of Planning and Investment, 2010
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Under
ODA programs and projects, especially technical assistance projects, cadres and
civil servants at all levels and in many sectors and fields (economic
management, urban management, finance, banking, customs, environment,
agriculture and rural development, etc.) have been trained and retrained lo
meet the requirements of the transition to a market economy. Through the
receipt and use of ODA capital, Vietnam has built a contingent of officers
experienced in external economy and proficient in international practices in
ODA state management agencies and ministries, provinces and major cities. A
large number of officers in many sectors, localities, consultancy units and
beneficiary units have been trained and acquired experience and knowledge about
international practices in many fields, such as project management, bidding,
community development, etc.
7.
The ODA capital source has contributed to the trade and investment promotion
and national competitiveness improvement
In
the period of preparation for WTO accession as well as the post-WTO accession
period. ODA has supported concerned Vietnamese agencies in preparing for and
negotiating with partners on the WTO accession and carrying out deep and broad
international integration activities as a WTO member.
ODA-funded
economic infrastructure works such as national highways, seaports, bridges,
airports, etc., have exerted pervasive impacts, boosting the development of
industrial parks and commercial exchange among regions and areas, facilitating
the positive economic restructuring in many provinces and cities with higher
proportions of industrial production and services, creating more jobs and
higher incomes for people and more revenues for local administrations,
contributing to the hunger eradication and poverty alleviation.
II. PROBLEMS AND CONSTRAINTS IN THE
ATTRACTION AND USE OF ODA
Besides
the above achievements, the attraction, management and use of ODA in the past
five years still see the following constraints and shortcomings:
1.
The duration of preparation for an ODA program or project, from the project
initiative to the conclusion of a specific ODA international agreement, remains
too long, usually 2-3 years.
2.
A number of regulatory documents of ODA programs and projects are of
unsatisfactory quality and unsuitable to Vietnam's practical conditions,
leading to repeated supplementation and adjustment of project contents, or even
to cancellation of some projects.
3.
The implementation of ODA programs and projects is slow, thus delaying the ODA
disbursement. At present, the rate of ODA disbursement in Vietnam is lower than
the average disbursement rate of this capital source in the region and the
world. The slow disbursement has been the reason for the low effectiveness and
efficiency of ODA in many programs and projects, and in some cases the Government
had to pay a commitment charge for undisturbed capital amounts.
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III. CAUSES
1.
Vietnam's system of legal normative documents on ODA attraction, management and
use remains incomplete and inconsistent and still contains many overlapping or
contradictory provisions which are unconformable with international practices,
causing difficulties and problems to the preparation for and implementation of
ODA programs and projects.
The
managing agencies and managers of ODA programs and projects have not yet taken
the initiative in preparing and implementing programs and projects, and still
heavily depend on the donors.
2.
The ODA management and use process and procedures of the Government and donors
are not yet harmonious. There still exist disparities which are slow to
address, affecting the implementation of ODA programs and projects.
3.
The aid coordination of state management agencies remains ineffective and weak.
In many cases, these agencies failed to take the initiative in coordinating
with donors and ministries, sectors and localities in selecting and formulating
ODA programs and projects; and failed to properly manage the strict observance
of legal documents on ODA management and use.
4.
Domestic conditions and resources have not been adequately and promptly
prepared for the preparation for, implementation and assurance of the
sustainability of ODA programs and projects after their completion (project
preparation capital, domestic capital, program maintenance capital, qualified
officers, physical and technical foundations, etc). Social organizations,
experts, beneficiaries and affected stakeholders have not been widely mobilized
to participate in the implementation, monitoring and evaluation in order to
improve the effectiveness and efficiency of ODA programs and projects.
6.
The institutional and personal capacity for ODA attraction, management and use
of focal ODA management units in a number of ministries, sectors and localities
and project implementation units is not satisfactory and professional. The
capacity of domestic contractors and consultants remains limited, failing to
meet both quantitative and qualitative requirements in supporting the ODA
attraction and use. Some foreign consultants lack experience and information
about Vietnam's practical conditions and the capacity for selecting and
managing contracts with foreign contractors and consultants is still limited.
7.
The monitoring and evaluation of the implementation of ODA programs and
projects and the regime of reporting from the grassroots and feedback of ODA
stale management agencies have not been seriously implemented under current
laws.
IV. LESSONS
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1.
The results of implementation of the 2006-2010 ODA scheme reaffirm the
consistent guideline of the Party and State of Vietnam that external capital
sources are of important significance while domestic capital sources play the
decisive role.
2.
Legal documents directly or indirectly governing the ODA management and use
must be consistent and conformable with international practices in order to
assure the effectiveness of governmental agencies in aid coordination, and at
the same time promote the proactiveness and creativity of project managing
agencies and managers as well as beneficiaries. This will also promote donors'
compliance with Vietnam's management systems, improve aid effectiveness and
reduce transaction costs.
3.
The spirit of ownership at the national as well as grassroots levels in the ODA
attraction, management and use is decisive to the success of programs and
projects. At the national level, ownership is demonstrated in the ODA
coordination capacity to meet development requirements in a uniform and
effective manner. At the grassroots level, ownership is the responsibility to
initiate or select projects, take the initiative in cooperating with donors and
arranging resources in the preparation for and implementation of ODA programs
and projects in order to achieve sustainable results and economic and social
benefits.
4.
Decentralization of ODA management and use is judicious and necessary.
Decentralization must go hand in hand with empowerment and clear definition of
responsibility, especially responsibility of heads. At the same time, it is
necessary to heighten the role of ministries and specialized agencies in
receiving and implementing specific programs and projects. Building capacity
for agencies managing and implementing ODA programs and projects is key to
successful decentralization.
5.
Information sharing, straight and open dialogs based on a constructive and
responsive spirit and development of reliable partnerships constitute a
particularly important factor for the attraction and use of ODA capital
sources.
Part III
ATTRACTION,
MANAGEMENT AND USE OF ODA AND OTHER PREFERENTIAL LOANS OF DONORS DURING
2011-2015
I. CONTEXT
1.
Global context
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The
global ODA supply sources are likely to decrease due to economic difficulties
facing a number of OECD-DAC member states caused by their heavy public debts,
while the demand for ODA in developing countries continues to rise. Donors lend
to provide more ODA to underdeveloped countries and Middle East and North
African countries in need of political stability.
2.
Domestic context
Thanks
to the socio-economic development achievements recorded in the recent past,
Vietnam has escaped from the group of low-income underdeveloped countries and
joined the group of middle-income developing countries, laying important
foundations for its development in the new period.
The
country's face has been uplifted. Its political and social situation is stable.
Vietnam's position on the international arena has been strengthened and
enhanced. By carrying on its substantive reform and renewal as well as straight
and constructive dialogs with all partners in the development process. Vietnam
has won the trust of the donor community.
However,
for five years to come. Vietnam's economy will continue to face numerous
difficulties and challenges in many fields, including poor infrastructure,
insufficient and incomplete market economy institutions and limited human
resource quality. Besides, there exist many pressing problems in the people's
life, cultural and social affairs, unsustainable hunger eradication and poverty
reduction, environmental pollution and adverse impacts of global climate
change.
In
the field of development cooperation, the aid policies of development partners
toward Vietnam will change to suit the context that Vietnam has become a lower
middle-income country. Correspondingly, the characteristics and size of and
conditions for provision of ODA for Vietnam will see the following trends:
a/
A number of bilateral donors will shift from official development cooperation relationship
with Vietnam to direct assistance for developing cooperation partnership, like
direct relationship between universities, institutes or research centers or
between organizations of two parties. Some other donors may terminate programs
on development aid for Vietnam in the coming years;
b/
Most donors will adjust and change their aid policies for Vietnam through
reducing ODA capital and increasing preferential loans. This reality requires
Vietnam to adopt appropriate approaches to attract and improve the use
effectiveness of these capital sources in order to meet development investment
needs and guarantee the capacity to pay foreign debts;
c/
Development aid approaches and modalities such as program-based approaches
(PBA), general budget supports (GBS) and targeted budget supports (TBS) will be
applied more frequently; labor distribution and mutual assistance on the basis
of the comparative edges of development partners will be promoted;
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e/
A number of donors will provide ODA and preferential loans through global
programs (on HIV/AIDS, climate change and sea level rise, etc.), regional
cooperation activities within the ASEAN framework and cooperation in the
greater Mekong sub-region, etc. This trend will be consolidated and expanded in
the coming years.
The
foregoing global and domestic contexts show many advantages as well as
challenges for the attraction and use of ODA and preferential loans in the 2011-2015
period. This reality requires Vietnam to change its perception of this capital
source, apply many new approaches, reform relevant processes and procedures,
and step up the attraction, management and implementation of ODA and
preferential loans so as to attract and effectively use this capital source and
concurrently assure public debt security.
II. THE DEMAND FOR ODA AND
PREFERENTIAL LOANS OF DONORS IN THE 2011 -2015 FIVE-YEAR SOCIOECONOMIC
DEVELOPMENT PLAN
To
guarantee the fulfillment of the set objectives and tasks, the 2011-2015
five-year socio-economic development plan estimates the entire society's total
investment capital demand of around VND 5,745-6,140 trillion, approximately USD
250-266 billion, for the period at actual prices, with domestic capital
accounting for around 75-80% and foreign capital, 20-25%.
ODA
and preferential loans of donors in the 2011-2015 period are estimated to
include committed capital of around USD 32-34 billion and disbursed capital of
USD 14-16 billion (equal to some 6% of total social investment), of which
around 50% will be disbursed from programs and projects signed during
2006-2010.
As
a result, ODA and preferential loans in the 2011-2015 period will reach an
annual average of around USD 2.8-3.2 billion.
The
realization of commitments and disbursement of ODA and preferential loans
mentioned above are significantly important for supporting the implementation
of the 2011-2015 five-year socio-economic development plan. The Vietnamese
Government will closely cooperate with donors and spare no efforts to fulfill
these objectives and tasks.
III. GUIDING PRINCIPLES FOR IMPROVING
THE INSTITUTIONAL AND LEGAL ENVIRONMENT, ORGANIZING AND MANAGING THE ATTRACTION
AND USE OF ODA AND PREFERENTIAL LOANS OF DONORS DURING 2011-2015
1.
ODA and preferential loans constitute a source of development investment
capital. Therefore, the use of ODA and preferential loans must take into
consideration the comparative advantages and complemen-tariness of this source
and other development investment capital sources in order to achieve the
highest socio-economic effectiveness and assure public debt security.
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3.
To step up the application of development aid approaches and modalities such as
program-based approaches (PBA), general budget supports (GBS) and targeted
budget supports (TBS) to suitable programs and fields like supports for
implementation of national target programs. To promote labor distribution and
mutual assistance on the basis of the comparative advantages of development
partners.
4.
To intensify the access to and use of ODA and preferential loans under global
programs (on HIV/AIDS, climate change and sea level rise, etc.), regional
cooperation activities within the ASEAN framework, cooperation in the greater
Mekong sub-region (GMS), etc.
5.
To improve and raise the role and effectiveness of aid coordination work of the
ODA state management agencies. In the context of decentralization, it is
necessary to vest more powers and assign more responsibilities to ministries,
sectors and localities based on the principle that the Government uniformly manages
ODA and preferential loans. The system of institutions and penalties should be improved
to improve the effectiveness of the coordination, supervision and inspection of
the ODA state management agencies.
6.
To bring into full play the ownership, initiative and creativity of managing
agencies at all levels, project managers and beneficiary units: Ownership must
be the decisive factor in all stages of attraction, management and use of ODA
and preferential loans. The promotion of ownership at all levels will assure
that each program or project funded by ODA or preferential loans truly help
ministries, sectors or localities effectively meet their urgent needs.
7.
To assure sufficient and timely domestic conditions, including domestic
capital, necessary human capacity, etc., for preparing for. implementing and
guaranteeing the sustainability of programs and projects funded by ODA and
preferential loans after they are completed.
8.
To create a reliable and open environment and favorable conditions for
deepening the partnership between the Government and donors through renewing
the agendas and contents of forums for development policy dialogs at the
national and sectoral levels, to associate aid effectiveness with development
effectiveness.
9.
To create conditions for private enterprises to use ODA and preferential loans
in different forms such as use of credit limits, participation in project
implementation, investment in infrastructure development in the PPP form, etc.,
on the basis of sharing benefits and risks between the State and private
sector.
10.
To assure the publicity, transparency and accountability for use and management
of ODA and preferential loans, and perfect the mechanism for supervision by the
people and social organizations of planning work, project preparation,
arrangement of resources and implementation of programs and projects funded
with this source.
IV. PRIORITIES IN THE ATTRACTION AND
USE OF ODA AND PREFERENTIAL LOANS OF DONORS IN THE 2011-2015 PERIOD
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To support the achievement of the development objectives of the 2011 -2015
five-year socio-economic development plan, prioritizing the realization of the
three major breakthroughs set forth in the 2011 -2020 socioeconomic
development strategy; the implementation of the scheme on building of a
complete infrastructure system for the national industrialization and
modernization in the 2011 -2020 period; and the implementation of national
programs in the 2012-2015 period.
-
To prioritize important public investment programs and projects in which
investment can hardly be attracted from the private sector or which are funded
with commercial loans.
-
To use ODA and preferential loans as a supplementary capital source to
encourage the private sector to invest in infrastructure development in various
forms and modes, including the public-private partnership (PPP).
-
To use part of ODA and preferential loans to invest in production development
in order to promote commerce, create jobs and restructure the economy in
regions and localities.
Based
on the above principles, the sectors and fields prioritized for attraction and
use of ODA and preferential loans of donors in the 2011-2015 period include:
1.
Building of a synchronous, large-scale and modern infrastructure system
a/
To develop expressways, prioritizing the development of the road system in
regions with large goods flows and localities in the country's growth poles,
linking different localities and areas, and linking to other countries in the
region and the world, creating a strong pervasive impact and promoting the
whole country's growth;
b/
To build new national deep-water seaports, modernize and raise capacity of
general services of existing ones; to form large marine economy centers;
c/
To build a number of international airports;
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e/
To upgrade, synchronously develop and modernize the infrastructure system in
urban centers, especially major cities;
f/
To quickly develop the electricity source system and electricity transmission
and distribution networks in combination with the application of energy-saving
technologies, assuring sufficient energy for the national development and
people's life: to develop renewable energies (wind power, solar power); to
support the implementation of the national target program on energy
conservation and efficiency;
g/
To synchronously develop and step by step modernize the irrigation system,
natural disaster prevention and control works and the information system, with
a view to meeting development and natural disaster mitigation requirements.
In
parallel with the development of technical infrastructure facilities, the
Government attaches importance to the development of policies and institutions
for management of the infrastructure sector so that this sector can sustainably
develop in the market economy and provide to the society quality public
services at competitive prices.
2.
Development of social infrastructure
a/
To support the substantial and comprehensive renewal of education in the
direction of standardization, modernization, socialization, democratization and
international integration, with the renewal of the education administration
mechanism, development of the contingent of teachers and administrators as the
key factor;
b/
To develop infrastructure facilities for teaching and learning and teacher
training, paying attention to providing education and training supports for
poor provinces and ethnic minority areas;
c/
To consolidate physical and technical foundations for medical examination and
treatment, especially at the grassroots level;
d/
To build and furnish medical technical equipment for a number of public
hospitals at the central, regional and provincial levels and a number of
hi-tech medical centers;
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f/To
support the effective implementation of the Program on quick and sustainable
poverty reduction in 62 districts with a high poor household percentage;
g/
To support the implementation of the national target programs on sustainable
poverty reduction: culture; introduction of information to mountainous, remote
and border areas and islands; education and training; employment and job
training; health; population and family planning; HIV/AIDS prevention and
control; food hygiene and safety; drug prevention and control; crime prevention
and combat;
h/
To support the implementation of the social security programs, the national
action program on settling the consequences of exploring remnant of wars, etc.
3.
Development of human resources, especially high-quality human resources,
science, technology and knowledge-based economy
a/
To support the development of leading and managing personnel, highly qualified
experts and business administrators, skilled laborers and leading scientific
and technological workers:
b/
To support the implementation of programs and schemes on training of
high-quality human resources for major and key sectors and fields; technology
transfer and knowledge sharing; development of sciences and high technologies,
aiming at the goal of sustainable growth and development of a knowledge-based
economy in Vietnam.
4.
Agricultural and rural development
To
support the implementation of the national target program on building of a new
countryside covering such activities as planning and building of a new
countryside; development of socio-economic infrastructure (rural roads,
electricity grid, health, education and training, construction, irrigation, etc.);
to restructure and develop the economy (increase of incomes through developing
commodity production with high economic efficiency; promotion of agricultural
extension; to step up research and application of scientific and technological
advances to agriculture-forestry-fisheries, agricultural mechanization,
reduction of post-harvest losses in agriculture-forestry-fisheries; to conserve
and develop traditional craft villages under the guideline "each village
one product," development of crafts and trades that are local advantages;
to step up job training for rural laborers, promote industrial production in
rural areas, create jobs and quickly restructure the rural labor. In addition,
the use of ODA and preferential loans will be prioritized for supporting the
implementation of the national target program on rural clean water and
environmental sanitation.
5.
Building of the legal system and synchronous institutions of the
socialist-oriented market economy
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b/
To support the national administrative reform in all aspects: institutions,
organizational apparatus and administrative procedures.
6.
Protection of the environment and natural resources, response to climate
change, and green growth
To
prioritize the use of ODA and preferential loans for the implementation of
environmental and natural resource protection programs and projects; lo apply
environment-friendly technologies and build green-growth models and support the
implementation of the national target program on response to climate change; to
remedy environmental pollution and improve the environment.
7.
Promotion of investment and trade and a number of production and business
sectors
ODA
and preferential loans may be used to support the promotion of investment and
trade through the transfer of technologies, modem production and management
techniques, raising the competitiveness of a number of products and goods in a
number of sectors in which Vietnam has potential and advantages (processing of
agricultural, forest and fishery products, products of support industries and
products being input materials for export production, etc.), laying a
foundation for Vietnam's participation in the global production chain and
regional and international economic integration. By supporting the promotion of
trade and investment, these sources will support the creation of jobs and
increase of incomes and contribute to the sustainable hunger eradication and
poverty reduction.
8.
Support by geographical area and territory
ODA
and preferential loans will be used to support the materialization of the
territorial development orientations set forth in the 2011-2015 five-year
socio-economic development plans, prioritizing poor, difficulty-hit, deep-lying
and remote provinces and ethnic minority areas in the northern midland and
mountainous regions, northern Central Vietnam and central coast, the Central
Highlands and the Mekong River delta.
Programs
and projects will focus on supporting the improvement of living conditions and
livelihoods of local people, the settlement of pressing issues in the process
of rapid urbanization in provinces (water supply and drainage, garbage
treatment, inner city transport development and housing for the poor, etc.).
V. SYSTEM OF SOLUTIONS FOR THE SCHEME
IMPLEMENTATION
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1.
Perfecting policies and institutions
a/
To issue a new decree to replace the Government's Decree No. 131/2006/ND-CP on
management and use of ODA, and circulars guiding the implementation of this
Decree, aiming to assure their synchrony, consistency, explicitness.
transparency and conformity with the contents and guiding principles for
attraction, management and use of ODA and preferential loans of the 2011-2015
scheme.
b/
Based on such new decree replacing Decree No. 131/2006/ND-CP and the guiding
circulars, related agencies shall revise administrative procedures.
c/
To issue guidelines on the allocation, management, implementation and
supervision of disbursement of domestic capital from the state budget for
programs and projects funded with ODA or preferential loans, including priority
policies for each sector, field or difficulty-hit area.
2.
Improving management and organization work
a/
To improve the organizational structure of focal agencies at all levels in the
direction of promoting their autonomy and the initiative of ministries, sectors
and localities in the management and use of ODA and preferential loans.
b/
To improve the effectiveness and efficiency of the operation of the
Government's ODA working party by upgrading this working party into a national
steering committee for ODA headed by a government leader.
3.
Enhancing partnership relations and raising the aid effectiveness
a/
To raise the quality of dialogs between the Government and donors by renovating
the agendas and contents of forums for development policy dialogs at the
national and sectoral levels, combining aid effectiveness with development
effectiveness.
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4.
Building capacity for management and use of ODA and preferential loans
a/
To work out and implement medium-term plans on building capacity for management
and use of ODA and preferential loans toward professionalism and
sustainability.
b/
To provide basic training in policies, institutions, processes, procedures and
professional operations of management and use of ODA and preferential loans for
project managers at all levels and staffs of aid agencies.
5.
Improving the implementation of programs and projects and speeding up disbursement
a/
State management agencies responsible for ODA and preferential loans shall
closely coordinate with managing agencies, project managers and donors in
organizing periodical reviews of program and project preparation and
implementation activities, and proposing solutions to speed up the signing
process and increase the disbursement rate.
b/
Managing agencies shall enhance the work of directing and supporting project
managers in promptly settling difficulties and problems of their programs and
projects funded with ODA and preferential loans.
c/
To continue the harmonization of processes and procedures between the
Vietnamese Government and donors, including institutionalization of a number
of actions to be taken in advance to shorten the duration of project
commencement and implementation preparation right after specific international
agreements on ODA and preferential loans take effect, and simplify procedures
for supplementing and amending these international agreements in the course of
program and project implementation.
6.
Enhancing the monitoring, supervision and evaluation
a/
To enhance the monitoring, supervision and evaluation by improving the system
of management information and data on ODA and preferential loans; to elaborate
national statistical indicators on signed and disbursed ODA.
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c/
To increase the community-based monitoring and supervision by improving
institutions, creating a favorable environment for and encourage the participation
of the community, contributing to assuring the use effectiveness of ODA and
preferential loans, preventing and combating losses, waste and corruption.
7.
Assuring information publicity and transparency
a/
To coordinate with donors in publicizing policies, priority sectors and areas,
and conditions for provision of ODA and preferential loans of donors.
b/
To improve the system of statistics on ODA and preferential loans.
c/
To update information on ODA and preferential loans in the mass media.
Actions,
assigned tasks and indicators of monitoring the implementation of the groups of
solutions are specified in the action plan for implementation of the 2011-2015
scheme.
VI. ORGANIZATION OF THE SCHEME
IMPLEMENTATION
1.
Dissemination, study and implementation of the 2011-2015 scheme
a/
The Ministry of Planning and Investment shall organize the dissemination of the
contents of the 2011-2015 scheme among Vietnamese agencies and donors, and
guide the implementation of the scheme.
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c/
Agencies shall, within the ambit of their functions, perform the tasks assigned
to them in the action plan for implementation of the 2011-2015 scheme.
2.
Monitoring and evaluation of the implementation of the 2011-2015 scheme
a/
Ministries, sectors and localities shall report on the implementation of the
2011-2015 scheme and its results in their biannual and annual reports on
management and use of ODA and preferential loans, including also proposals and
recommendations to adopt timely solutions to problems arising in the course of
implementation.
b/
The Ministry of Planning and Investment shall report on a biannual and annual
basis to the Government on the implementation of the 2011 -2015 scheme and its
results, and make and send to the Government a mid-term report and a final
evaluation report on implementation results of the 2011-2015 scheme.-
APPENDIX
ACTION
PLAN FOR IMPLEMENTATION OF THE SCHEME ON ORIENTATIONS FOR ATTRACTION,
MANAGEMENT AND USE OF ODA AND OTHER PREFERENTIAL LOANS OF DONORS IN THE
2011-2015 PERIOD
(To the scheme on orientations for attraction, management and use of ODA and
other preferential loans of donors in the 2011 -2015 period promulgated
together with the Prime Minister's Decision No. 109/QD-TTg of January 19, 2012)
Group of solutions
Action
Responsible agency
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Deadline
Indicator for monitoring
I.
IMPROVING POLICIES AND INSTITUTIONS
1.
Elaboration and submission to the Prime Minister of a draft new decree to
replace Decree No. 131/2006/ND-CP on ODA management and use
Ministry
of Planning and Investment
Ministries
of Finance, Foreign Affairs, and Justice. State Bank, Government Office and
donors
Second
quarter of 2012
A
decree issued
2.
Issuance according to competence of documents and circulars guiding the new
decree replacing Decree No. 131/2006/ND-CP on ODA management and use
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Related
agencies and donors
Second
quarter of 2012
Guiding
Documents and circulars issued
3.
Based on the new decree replacing Decree No. 131/2006/ND-CP and circulars
guiding this Decree, related agencies shall improve administrative procedures
Ministries
of Planning and Investment, and Finance
Related
agencies
Third
quarter of 2012
Current
administrative procedures reduced by 30%
4.
Study and proposal to the Prime Minister for decision of the issuance of
guidelines on allocation, management, implementation and supervision of
disbursement of domestic capital allocated from the state budget for programs
and projects funded with ODA or preferential loans, including priority
policies for each . sector, field or difficulty-hit locality
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Related
agencies
Second
quarter of 2012
Guidelines
issued
II.
IMPROVING ORGANIZATION AND MANAGEMENT
1.
Improvement of organizational structures of focal agencies at all levels in
charge of management and use of ODA and preferential loans
Ministry
of Planning and Investment
Related
agencies
Fourth
quarter of 2012
Organization
of these focal agencies improved
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Ministry
of Planning and Investment And Government Office
Government's
ODA working party
Second
quarter of 2012
National
Steering committee for ODA Established and operating
III.
ENHANCING PARTNERSHIP AND IMPROVING AID EFFECTIVENESS
I.
Raising of quality of dialogs between the Government and donors by renovating
agendas and contents of forums for development policy dialogs at national and
sectoral levels, associating aid effectiveness with development effectiveness
Ministry
of Planning and Investment And ministries and sectors
Related
agencies and donors
2012-2015
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2.
Enhancement of the role and raising of quality of operation of the Aid
Effectiveness Forum by implementing the Busan Declaration in Vietnam and
carrying out activities to improve aid effectivness
Ministry
of Planning and Investment
AEF
Executive Committee, related Vietnamese agencies and donors
2012-2015
Aid
quality and effectiveness improved, associating aid effectiveness with
development effectiveness (plan on implementation of the Busan Declaration in
Vietnam elaborated and approved; a new aid architecture with participation of
ministries, sectors and localities and groups of partnerships in sectors and
fields set up)
IV.
BUILDING CAPACITY FOR MANAGEMENT AND USE OF ODA AND PREFERENTIAL LOANS
1.
Elaboration and implementation of medium-term plans on building capacity for
management and use of ODA and preferential loans toward professionalism and
sustainability
Ministry
of Planning and Investment
Related
agencies and donors
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Plans
promulgated
2.
Provision of basic training in policies, institutions, processes. procedures
and operations of management and use of ODA and preferential loans for
project managers at all levels and donors' officers
Ministry
of Planning and Investment
Related
agencies and donors
2012-2015
Officers
directly managing the implementation of ODA and preferential loans and
donors' officers provided with professional knowledge and skills
V.
IMPROVING TIE IMPLEMENTATION OF PROGRAMS AND PROJECTS, SPEEDING UP
DISBURSEMENT
1.
Periodical review of program and project preparation and implementation,
proposal of solutions to speed up the signing and increasing disbursement
rate
Ministry
of Planning and Investment, other Ministries, sectors and localities
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2012-2015
ODA
and preferential loans signed and disbursement rate increasing year on year
2.
Harmonization of processes and procedure between the Vietnamese Government
and donors
Agencies
in charge of state management of ODA and preferential loans and managing agencies
Related
agencies and donor
2012-2015
Differences
in processes and procedures between the Vietnamese Government and donor
narrowed a number of action to be taken in advance institutionalized;
procedures for supplementing and amending international agreement on ODA and
preferential loans in the course of implementation of program and project
simplified
VI.
ENHANCING THE MONITORING, SUPERVISION AND ASSESSMENT
1.
Enhancement of monitoring, supervision and evaluation
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Ministries,
sectors, localities and donors
2012-2015
System
of management information and data on ODA and preferential loans improved:
national statistics on signed and disbursed ODA loans formed
2.
Building of personnel capacity for monitoring, supervision and evaluation of
management and use of ODA and preferential loans
Ministries
of Planning and Investment, and Finance, and ministries, sectors and
localities
Related
agencies and donors
2012-2015
Training
courses in institutions and skills of monitoring, supervision and evaluation
organized
3.
Elaboration and application of penalties to assure compliance with
regulations on monitoring, supervision and evaluation of management and use
of ODA and preferential loans
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Related
agencies and donors
Second
quarter of 2012
Penalties
to assure Compliance with regulations on monitoring, supervision and
evaluation elaborated and applied
4.
Enhancement of community-based monitoring and supervision
Ministry
of Planning and Investment
Related
agencies and donors
Regularly
Institutions
and environment favorable for community participation in monitoring and
supervision of effectiveness of ODA and preferential loans enhanced
VII.
INFORMATION PUBLICITY AND TRANSPARENCY
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Ministry
of Planning and Investment
Related
agencies and donors
2012-2015
Policies,
prioritized sectors and areas. conditions for provision of ODA and
preferential loans of donors publicized
2.
Updating of information on attraction, management and use of ODA and
preferential loans in the mass media
Ministries
of Planning and Investment, and Finance, ministries, sectors and localities
Related
agencies and donors
2012-2015
Information
on Attraction, management and use of ODA and preferential loans updated and
provided in the mass media
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1.
Dissemination, thorough grasp and implementation of the scheme
Ministry
of Planning and Investment
Related
agencies and donors
Second
quarter of 2012
Ministries,
sectors, localities and donors guided in and thoroughly grasping the spirit,
guiding principles and contents of the scheme; the action plan for the scheme
implementation implemented
2.
Monitoring and evaluation of the scheme implementation
Ministry
of Planning and Investment, ministries, sectors and localities
Related
agencies and donors
2011-2015
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