World Bank Vietnam country director Ousmane Dione told reporters Monday that the country disbursed only 11 percent of over $9.5 billion in ODA loans it got last year, the lowest rate in a decade.
He said the reasons for the delay were the lack of counterpart funds, the government’s concern over breaching the public debt limit. Vietnam has set the public debt cap of 65 percent of GDP.
He called on government agencies to have constructive discussions with the World Bank to find a solution.
The World Bank is not the only one to complain about Vietnam’s delays in disbursing ODA loans this year. The Japan International Cooperation Agency (JICA) said in October many ODA projects had been delayed, including one section of the Ho Chi Minh City metro, two sections of the Hanoi metro and the Maritime Safety Capability Improvement Project.
The delays were a result of the public debt cap and other policies issued in recent years to control public debt, JICA said in a statement.
Vietnam has so far signed deals to borrow $84 billion in ODA, and the outstanding foreign loans were worth $45.8 billion last year, or 20.25 percent of GDP.
Transport infrastructure, economic development policy studies and state management, human resources development, and environmental protection are fields given priority in the use of foreign capital.
In 2016-2017, Vietnam struck deals to borrow more than $9.19 billion, including $6.8 billion in ODA, $2.2 billion in other preferential loans, and $216.8 million in non-refundable aid.
More than 91 percent of ODA and preferential loans in the past two years have come from development agencies: 35 percent from the World Bank, 33 percent from JICA and 14.1 percent from the Asian Development Bank.
Vietnam has increased the the cap it has set for ODA loans from VND300 trillion ($12.87 billion) in 2016-2020 to VND360 trillion ($15.44 billion).
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