Wednesday, January 3, 2007

Vietnam needs $20bil ODA from now to 2010

Prime Minister Nguyen Tan Dung has signed decision 290 approving the plan on attracting and using ODA (official development assistance) capital in the 2006-2010 period, under which Vietnam will need $19-21bil worth of capital from donors.

In order to implement the socio-economic goals in 2006-2010 and reach the annual growth rate of 7.5-8% per annum in the period, Vietnam will need to mobilise VND2,200bil ($140bil, 2005’s exchange rate and $160bil, current exchange rate). Of this capital amount, 65% will be raised from domestic sources and 35% from outside sources.

Regarding the demand for ODA in the next five years, Vietnam will need $11bil in capital for key development projects, and in order to have this amount, the committed capital must be $19-21bil.

According to the Ministry of Planning and Investment (MPI), Vietnam has favourable conditions to attract ODA capital. However, the ministry said that Vietnam would have to compete with other countries in attracting ODA as the demand for ODA in developing countries was increasingly high.

MPI has forecast that the total ODA capital to be committed in 2006-2010 will be $20.4-23.7bil. Donors have also given similar figures in their forecasts.

ODA capital is expected to be injected mostly in transport projects, post and telecommunications, water drainage and supply, health care, education, environment and science and technology. Meanwhile, ODA capital to be pumped into industries and energy will see the decrease of 15%.

Vietnam is striving to attract ODA to several fields, including the north-south highway, transport routes in the northern mountainous areas, the Central Highlands and Cuu Long River Delta.

The projects on building T2 International Airport in Hanoi, Long Thanh airport in Bien Hoa City, terminals in Da Nang Airport and Cam Ranh (Khanh Hoa) will also use ODA capital.

For 2001-2005, the donors have pledged to give Vietnam $14.9bil in ODA, 80% of which will be in preferential loans. The disbursement rate in the period was $7.9bil.

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