No more easy money as PM set to talk directly with donors

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The Thanh Tri Bridge in Hanoi, which opened to traffic in 2007, was mainly funded by official development assistance from Japan. Photo: Dau Tu newspaper

For the first time, Prime Minister Nguyen Tan Dung will join direct talks with foreign donors  over Vietnam's development issues in Hanoi on Thursday, a minister said.

"The PM has agreed to converse directly with the donors, to speak many times, which is unprecedented," Minister of Investment and Planning Bui Quang Vinh said at a press briefing organized by the Vietnam Development Partnership Forum.

The forum will be the first open discussion between the Vietnamese government and the country's partners and related social organizations, replacing the annual Consultative Group meeting that was in place for the past 20 years, according to Thoi bao Kinh te Saigon Online.

Maintaining macro-economic stability, environment management, poverty alleviation and increasing the participation of private firms are expected to top the forum's agenda.

Vinh said the forum also aims to come up with better uses of ODA (official development assistance) in Vietnam, and thus will not focus on fund commitments from other countries, but on discussing the development policies Vietnam is adopting.

Appreciating ODA

The minister also said Vietnam has plans to change its ODA disbursement methods to make  better use of it, now that country's economic status has been upgraded to "middle income" status, which means it will receive more commercial loans rather than preferential loans or donations.

He said thus far, the funds have been taken "quite easily" and this has resulted in some wasteful use.

"There's a considerable number of government officials and people who regard ODA as free money. That's a very dangerous attitude," the Tuoi Tre quoted him as saying.

Vinh said that after 20 years of using ODA, many local leaders still have the habit of treating the loans as charity money, which has resulted in many "luxury projects."

He said that kind of conduct won't be allowed in the future, partly because Vietnam's public debt is approaching the cap of 65 percent of GDP set by the legislators.

ODA projects in the future will demand more contribution from the recepients, or target benificaries won't want to escape poverty when they can remain poor and keep receiving privileges.

He said many ODA projects in northern mountainous provinces have worked out well when locals were asked to contribute their labor.

Figures from the ministry showed that international donors have pledged $78 billion in ODA to Vietnam from 1993, when Vietnam was one of the poorest countries in the world with a per capita income of US$100 and low social indicators, to 2012 when the country had grown into a $154-billion economy with a per capita income of around $1,500.

Agreements worth $63 billion were signed and $42 billion was disbursed.

Victoria Kwakwa, Vietnam director of the World Bank, said at the press briefing that the change in format of the conference will not affect donors' commitment to supporting Vietnam.

She also suggested apart from ODA, Vietnam taps new funding sources like the Middle East.

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