Strategy To Use Official Development Assistance ( Oda) In Near Future In Vietnam.pdf

ScanGate document UPPSALA UNIVERSITÉT & VỈNU UN1VERSITY OF ECONOMICS & BDSỈNRSS *** UPPSALA UN1VERSITET MASTER THESIS OF MPPM Strategy to use Official Development Assistance (ODA) in near íuture in Vi[.]

UPPSALA UNIVERSITÉT & VỈNU UN1VERSITY OF ECONOMICS & BDSỈNRSS *** UPPSALA UN1VERSITET M ASTER THESIS OF MPPM Strategy to use Official Development Assistance (ODA) in near íuture in Vietnam Author: Supcrvisor: Local supervisor: Class: Ho Anh Tai l)r Sven-Erik Svárd Dr Nguyen Manh Hung MPPM INTAKE Hanoi, lanuary - 2015 This th esis is d ed ica ted to niy lìittle fam ily Acknowledgem ents First I would like to thank my supervisors, Dr Sven-I rik íSvărd and Dr Nguyen Manh Hung, tor guiding and supporting me in my redactiion would like to thank all lectures and UEB staff who allowed me to acquire such knovvledge in order to finalize this thesis Then, wou!d like to thank my classmates in this niaster program, although we are not in numbers, w ho continually created a tầmiliar atmosphere and helped together to succeed together in this master program I also thank my colleges and friends in Ministry of Planning and Investment, State Bank o f Vietnam and other govemmental agencies who provided precious documents and iníbrmation during my redaction Pỉnally, I specially thank my family who alvvays supported me in this hard master program Abstract Title: Strategy to use Official Development Assistance ( ODA) in near future in Vietnam Level: Final assignment for Master Program in Public Management Author: Ho Anh Tai Supervisors: Dr Sven-Erik Svărd and Dr Nguyen Manh Hung Date when the thesis is presented: 2014 - 12 Aim: The aim o f this thesis is to study the strategy to use Offĩcial Development Assistance (O DA ) in near tuture in Vietnam, especially in attraction, management and utilization o f O D A and concessional loans ot' donors in Vietnam The thesis starts by an overview on ODA and concessional loans’ attraction, managem ent and utilization in Vietnam Then thesis continues by describing a State o f art o f O DA m anagem ent in different countries in the vvorld, in order to draw a large scale o f experiences not only successful but also un-successful (yet), in order to fínd out some lessons for Vietnam In the next section, after analyzing O DA attraction, management and utili/ation model and its actual situation in Vietnam, the thesis tries to make a comparison o f aid effectiveness between Vietnam and other countries The last section o f the thesis draws the recent strategy and orientation in ODA attraction, managcment and utilization o f the Vietnamese governm ent and then, based on the theory acquired đuring the Master program, the author tries to propose some recommendations for change in Vietnani in terms o f ODA attraction, management and utilization in the tuture Method: As the problem is in macro level, the method chosen by the author is generalist, descriptive and analysis First, the author describes the situation o f O DA management and use in Vietnam and compares ODA management effectiveness between Vietnam and other countries The comparison method is simple and based on Gross Domestic Product (GDP) growth comparison, following some speciílc hypothesis The data is collecteil trom proposals are already available but some are found out by the author, following personal experiences and observations Recommendations proposed in the thesis are based on theoretical knovvleđge from the Master program and the mind-map method, according to the tìve steps o f ODA management model in Vietnam Result & Conclusions: The relevant results o f the thesis are: systemization o f ODA management model and actual situation in Vietnam; description and comparison o f ODA management effectiveness betvveen Vietnam and other countries; proposition of speciíìc recommendations in parallels with govem m ent's orientation in terms o f ODA attraction, managem ent and utilization in the future The thesis concludes that in the past tvventy years, ODA attraction, management and utilization have been practiced in good way and helped Vietnam achieve many successes in its development way However, with new challenges when Vietnam has become a lovv middle income country, its strategy has to adapt to new requirements and management standards Based on that, some recom mendations in terms of: orientation; creating prọịect documents; administrative procedures; managing and implementing prọịects; m onitoring and e valuating prọịect will need to be applied in order to improve ODA management effectiveness in Vietnam Suggestions for future research: In the restricted context o f this thesis, beyond achieved results, other purposes have not been protbundly studied First, international experiences and model have not been closely analyzed, some conclusions are still generalist Then, effectiveness comparison effectiveness between different was basic and didn’t allow comparing management models In other sides, recommendations vvere proposed to improve each step in actual management model, not to change the model itself in Vietnam So, the thesis can be subject for lìiture researches toy analyzing international ODA management models and compare to Vietnannese model in order to tìnd out or draw an effective ODA management model Tlnen, based on this optimal model, the research wi 11 propose recommendations to change ODA management model in Vietnam Contribution of the thesis: Contributions o f the thesis: Systematizing ODA attraction, management and utilization model in Vietnam; reviexving widely intemational experiences in ODA attraction, management and utilization; proposing a comparison o f ODA management eíTectiveness using GDP grovvth pertormance; proposing recommendations for change in order to improve ODA attraction, management and utilization, in parallel with the governm ent's orientation Key words: Vietnam, ODA, management, effectiveness, recommendations for change concessional loans, Table o f contents Acknowledgements A bstract Table o f contents Abhreviations Tables and íìgures Chapter I: Theoretical basics on the subject 1.1 Overvievv on the th e s is 1.1.1 Necessity to study the s u b je c t 1.1.2 Research question 10 1.1.3 Research m e th o d 11 1.2 Overvievv o f ODA and concessional lo a n s 12 1.2.1 Dìnition o f ODA and concessional ioans 12 1.2.2 Forms o f O D A 13 1.2.3 Characteristics o f O D A 13 1.3 Attraction, management and utilization o f O D A 14 1.3.1 Obịectives and requirem cnts 14 1.3.2 Management o t'( ) í) A 15 Chapter II: International experiences in ODA management 18 2.1 Philippines 18 2.2 Malaysia 20 2.3 C hina 11 2.4 Experiences from other countries 23 2.5 Lessons for V ietnam 25 Chapter III: Current status o f ODA management in Vietnam 26 3.1 Overvievv o f ODA management in V ietnam 26 3.1.1 Process o f ODA management in V ietnam 26 3.1.2 R e su lto fO D A m anagem ent 27 3.2 State o f ODA management at p resen t 28 3.2.1 Procedures o fO D A m anagem ent 28 3.2.2 Achievements on ODA m anagem ent .30 3.2.3 Shortcomings and existing limitations 30 3.2.4 Changes in co-operation and development relationship .34 Chapter IV: Comparison o f aid effectiveness 36 4.1 Comparison method 36 4.2 GDP growth stages to industrialization 37 4.3 Comparison o f GDP grovvth at the tìrst development period 38 4.4 Comparison o f GDP groxvth at the next deveỉopment period 39 Chapter V: Recommendations for change in V ietnam 42 5.1 Vietnam’s orientation in ODA managem ent 42 5.1.1 Orientations for íund-based u s e .42 5.1.2 Orientations for donor-based u s e 42 5.1.3 Orientations for ODA use in priority areas 43 5.1.4 Solutions to improve etììciency o f ODA management 43 5.2 Recommendations for changes 45 5.2.1 Changes in ODA management orientation 45 5.2.2 Changes in creating project documents 45 5.2.3 Changes in administrative procedures 46 5.2.4 Changes in implementing projects 46 5.2.5 Changes in monitoring and evaluating p ro ject 47 Conclussions 48 Reterences 49 Abbreviations ADB Asia Development Bank CG Consultative Group on donors for Vietnam Conterence FDI Foreign Direct Investment GDP Gross Domestic Product M&E Monitoring and Evaluation ODA Offícial Development Assistance VDPF Vietnam Development Partnership Forum WB The World Bank WTO World Trade Organization Tables and íigures Tables Table 1: O DA loans and grants to the Philippines on yearly hasis 19 Table 2: Poreign debt o f Malaysia as a share o f G D P 20 Figures Figure 1: O DA com m itm ent, conclusion and disbursement, 1993 — 2 27 Pigure 2: Process o f m anagem ent and use o f O DA in Vietnam 29 Figure 3: Stages to Industrialization 38 Figure 4: G D P per capita in 25 lìrst years o f development period 39 Pigure 5: C3DP per capita in next 25 years o f development period 40 11 - Analyzing actual strategy to use ODA in Vietnam and developing recommendations to improve ODA management in Vietnam in the Corning years 1.1.3 Research method In this paper, there are numerous research methodologies that wi 11 be delivered: - Descriptive/Ọuantitative: the presentation o f data is through numbers and statistics from trustvvorthy sources, including: reports, studies, surveys and books which otììcially published by public agencies and organizations o f Vietnam such as line ministries o f the Vietnamese government as well as independent and toreign organizations - Correlation/Regression Analysis: this method will analyze and evaluate the content o f published studies, researches and the delivery o f ODA prọịects so as to implement the theoretical framework o f this research Purthermore, correlation analysis wi 11 incorporate the social and economic achievements o f Vietnam through the utilization o f ODA resources, and identify problems in the O DA management at the macro- and micro-levels in Vietnam From this, the research tenđs to deploy mechanisms, guiding prineiples and recommendations aiming to improve utilization elììciency and prevent negative in ODA prọịects and preíerential loans from donors - Comparison method: Based on above data analysis, the report tends to place the Vietnamese govemment's mobilization and use o f ODA Capital and foreign preíerential loans in line with other international realities and practices Successtul international practices will be explored to reílect the fact tliat contribution o f ODA to GDP growth tends to increase gradually over the years and generally Hence, this method also links the ịoint impact betvveen effectiveness o f ODA utilization to GDP grovvth By a good compare and contrast, these practice guidelines can enhance the government in their ongoing efforts to strengthen the capacity o f local systems and improve aid management in the short and medium term This is the core method used in this thesis - Mind-map method: is used to classiíy information in the thesis This method is one o f the most important methods used in the thesis which allows clariíying ideas and \villing recommendations in the thesis to clearly structuralize iníbrmation and 12 1.2 Overview of ODA and concessional loans 1.2.1 Defmition o f ODA and concessional loans OíTicial Development Assistance (ODA) is a \vide range o f development Corporation activities betvveen Vietnam and íbreign governments, and international organizations (belovv collectively reíerred to as donors) ODA is provided under the forms o f non-refunđable ODA (or grants) and ODA loans under concessionary conditions on interest rates, grace periods and repayment durations According to World Bank Policy Research Working Paper [WB1999] a part o f offìcial development / ìnance, o f which, eỉement o f granted aids and concessional loans must account for 25 percent o f the total a id ” published in June 1999, ODA is dìned Hovvever, the current aid development status in Vietnam indicates that many o f them have in fact not yet satisíìed all mentioned-above conditions Hence, in addition to the adoption o f formal ODA definition, Vietnam Government also uses another concept specitìed as “concessional loans”, which are given under more concessional conditions on interest rates, grace periods, and repayment durations, and these have basically not yet reached the standards o f ODA loan but are more generous than market loans Such conditions set out hy different donors shall differ from each other For example at present Wor!d Bank offers Vietnam with loans on such concessional terms as 25 year repayment duration, including a tìve year grace period, and a total o f interest rate, and commitment and managemcnt cost, at most, o f 2.5% per year As defined in Article o fD ecree No 38/2013/ND-CP o f the Government issued on 23 April, 2013 on Management and Use o f Offícial Development Assistance and concessional loans froin Donors [CP2013Ị, ODA and concessional loans are grants and non-reíundable aids provided by Foreign governinents, intemational organizations, inter-state or inter-govemmental organizations to State or Government o f the Socialist Republic o f Vietnam In short, ODA and concessional loans (hereby reterred to as ODA) can be perceived, in the most general sense, as more concessional loans in comparison with commercial loans or non-refundable aids (grants) provided by donors to Vietnam 13 1.2.2 Forms ()f ODA - Categories by donors: Bilateral assistance’ (given directly from toreign govem m ents) and multilateral assistance (provided by intemational financial institutions, Funds, international and inter-governmental organizations) - Categories by ODA provision íbrms: Non-refundable (not refundable to the donor), ODA loans (concessional conditions on interest rates, grace periods and repayment durations vvith the non-refundable element) and Concessional loans (more concessional conditions in comparison vvith commercial loan - Categories by provision modes: Direct budget (directly transíerred to the State budget), Program support, Project support, Non-project aid 1.2.3 Charactcristics of ODA - Concessionality: Long maturities (from 10 to 40 years) and long grace periods (from to 10 years); More preferential interest rates than commercial credits or no interest rate; Comprising o f non-refundable element; Provided to only developing and least developed countries with promotion o f đevelopment as the main objective - Binding feature: ODA should be followed by certain requirements for expenditures and receipt conditions or politico - economic conditions - Approach to foreign investment: ODA is oỉten used for improving the inírastructure and socio-economic grovvth such as traffic infrastructure construction, energy developm ent and so on, in a vvay that helps create a tầvorable environment for toreign direct investment (FDI) - ODA possibly results in accumulating debt: un-effective use o f ODA should accumulate íòreign debt Bilateral assistance íorm 30 íoreign countries: Ireland, The UK, Austria, Poland, Belgium, Canada, Kuwait, Denmark, Germany, Spain, Netherlands, South Korea, Hungary, Italy, Luxembourg, Malaysia, USA, Norway, Japan, New-Zealand/ Austraỉia# Finland, France, Czech Republic, Thailand, Sweden, Switzerland, China, Singapore, India Multilateral assistance for 31 international organizations: The World Bank Group (WB), International Monetary Fund (IMF), Asian Development Bank (ADB), The Kuwait Fund, OPEC Fund for International Deveỉopment (OFID), The Arab Investment Fund, The Nordic Development Fund (NDF), The Nordic Investment Bank (NIB), European Union (EU), International Labor Organization (ILO), World Health Organization (W H O ), The International Organization for Migration (IOM), The International Fund of Agricultural Development (IFAD), The Global Environment Fund (GEF), The Global Fund to Fight AIDS, Tuberculosis and Malaria, International Trade Centre (ITC), The 15 Organizations of The United Nations (UN) 14 1.3 Attraction, managcment and utilization of ODA 1.3.1 Objcctives and requirements Under the context where Vietnam has become a low middle income country, strong retbrms o f public administration practices should be considered an urgent necessity in order to avoid falling into the so called “middle incoine trap” where many nations had caught in the past In response to the signiíĩcant growth rate and deeper international integration, public administration no\v requires íundamental changes towards more tlexible and competitive practices in orientation o f íầst and continuous changing circumstances, driven by market and integration demands, and more mutual dependent environment With this in mind, it requires to shift the traditional public administration structures accompanying with complex and cumbersome procedures into a highly ílexible system [NL2012] Accordingly, following driving factors are detìned as íundamentals to vvhich a new public administration system should be built on [AD1999]: - Define responsibilities and accountability in the State sector clearly - Set out standards and dimensions to measure result-based períịrmance and outputs - Stress more on results-based management - DiíTerentiate functions and tasks between m ulti-sector o f the State sector - Promote competitiveness in the State sector - Highlight management practices in the private sector - Focus on disciplinary and dctail oriented management o f human resources Moreover, the adoption ot' such fundamentals in attraction, management and utilization o f ODA (hereby reíerred to as “management o f ODA” ) for optimal result needs achieving tvvo following objectives: (i) Ensure effective management o f national toreign debt as vvell as public expenditures; (ii) Ensure the effectiveness and etììciency o f management and implementation o f project in line with applicable socio-economic plans and strategies 15 Besides, monitoring and evaluation (M &F) o f ODA prọịects have to follow high standards methodology o f international practice M&E tools, methods and approaches usually practiced include [WB0402]: - A comprehensible pertbrmance indicators: measurable inputs, processes, outputs, outcomes, and impacts for development projects, programs, or strategies - A logical tramevvork approach: clcar objectives o f any project, program, or policy - A Theory-based evaluation: good understanding o f the workings o f a program or activity - Formal surveys: standardized iníbrmation from a carefully selected sample o f people or households - Rapid appraisal methods: quick, low-cost ways to gather the views and íeedback o f benetlciaries and other stakeholders, in order to respond to decision-makers’ needs for information - Participatory methods: active involvement in decision-making for those with a stake in a project, program, or strategy and sense o f ownership in the M&tì results and recommendations - Public expenditure tracking surveys - Cost-benefit and cost-effectiveness analysis: clarify if the costs o f an activity can be justifìed by the outcomes and impacts - Impact evaluation These tools, methods and approaches must be systematically applied for each ODA program and proịect ĩ 3.2 Management o f ODA Management o f ODA refers to the implementation in four tbllovving aspects: f Build up strategies to mobilize, manage and use ODA + Develop a regulatory framework + Guarantee the quality o f preparation, formation and implementation o f proịects + Ensure the efficiencies o f prọịect monitoring and evaluation 16 1.3.2.1 Build up strategies to mobilize, manage and use ODA This is the most important part to the management and use o f ODA and concessional loans In the process vvhere the current íìnancial sources to Vietnam in the form o f ODA has remained strong over recent years (ODA accounts for - 5% o f the country’s GDP each year), designing proper strategies to mobilize, manage and use ODA and concessional loans is seen as a critical issue The strategy for mobilizing, managiníỉ and using ODA and concessional loans should ensure the tvvo important goals: eíTective support to national socio-economic development; and repayment ability o f the Government to avoid increasingly debt burden for Vietnam 1.3.2.2 Develop a regulatory framework Studies o f World Bank pointed out that a good regulatory environment and well-reformed policies play the key roles in promoting the effectiveness o f ODA and concessional loans To maximize the effectiveness and effíciency o f management and use o f ODA and concessional loans, a part from designing a proper mobilization strategy in line with the targets íor a certain socioeconomic development period, it is necessary to develop a comprehensive, clear, transparent and consistent regulatory framework and policies in conformity \vith the international practices In addition to that, under the remarkable progress o f public administration reforms, it is crucial to simplify and harmonize the administrative procedures so as to minimize the time consumption for preparation, project approval, and negotiation, commitment o f loans and tunds vvith donors 1.3.2.3 Guarantee the quality o f preparation, tormation and implementation o f projects In response to the strategies for mobilization, management and use of ODA and concessional loans, relevant agencies shall prepare, design and implement projects under the conditions and terms required by the donors as well as in line with the development orientation o f relevant sectors and íìelds To this smoothly, the Government has to set up a comprehensive cooperation mechanism betvveen relevant agencies at all level from fund raising, íịrmation, and approval o f new projects to implementation 17 Disbursement o f O DA and concessional loans is also an important step o f the prọịect implementation process As reported hy ADB, it is estimated that the extra cost items occurring in the case vvhere a project is delayed for one year, including direct and indirect costs, and opportunity cost present ro u g h ly l8 % o f the total project budget that is needed to carry out the project activities [AD2014Ị As a matter o f íầct, the most common problem to be addressed concerning the m anagem ent and use o f ODA and concessional loans is delays o f implementation and fund disbursement Often, projects funđed by O DA and concessional loans are delayed for one to two years on the planned implementation or some may be for five to six years leading to sharp decrease in investment effectiveness For these, speeding up the implementation and disbursement o f ODA funds and concessional loans should be seriously taken into account, among many hurdles, special attention should be paid to decisive factors such as making domestic contribution Capital properly, ensuring clearance on schedule, reforming administrative procedures harmonized with donors’ practices and the G o v ern m en t^ regulations and so on i 3.2.4 Ensure the eíTiciency o f project monitoring and evaluation Under the trend o f comprehensive public administration retorm tovvard a modernized and results-based public administration system in every aspect and at all level o f the economy, the process o f ODA and concessional loan management and use is undoubtedly not out o f this trend The core principles for eiTective results-based public administration are identified: results-based monitoring and evaluation o f every step including preparation, íbrmation and implementation o f a project At conception and design step, it requires to clearly stating the background and rationale upon which the prọịect is based, fígure out problems to be addressed and prioritize areas in which funds should be invest More importantly, the vvhole project cycle should be tracked by relevant agencies based on a monitoring and evaluation plan vvhere measurable indicators are íbrmulated and selected ĐAI HỌC QUỐC GIA HÀ NỘi TRUNG TẦM THỎNS TIN THƯV! 18 Chapter II: International experienccs in OI)A managcmcnt 2.1 Philippines The OíTicial Development Assistance to Phi 1ippines commenced in the 1950s, mostly from Japan and USA, together, they accounted for more than 80 percent o f the total national development assistance flows from bilateral sources during the period 1950 - 1990 In the 2000s, hovvever, U.S ODA to the Philippines has been changing vvith the focus more on the form o f technical support whilst Japan has remained the largest donor, presenting for 45 percent share o f the countrv’s total development assistance flows, followed by the World Bank and Asian Development Bank, each institution accounts for some 13 - 14% [HK2010] i3espite massive inílovvs o f aid to Philippines, this country has experienced the typical íầilure in the use and management o f loans, including toreign aids Dramatic increase in new loans and other inflows o f Capital such as ODA and concessional loans has resulted in arising in-datedness burden for the Philippines Beirm knovvn as a country bearing a few o f debts duringl950s, the Phi 1ippines began the 1970s with huge arrears in external debt and consequently suffered from the severe debt crisis in 1985 [HD2006] Increasing loans and inetTiciencies in investment and tìnancial system operation are major contributors to the debt crisis in the Philippines Not until 1996, ditl the Philippines Conuress pass the Official Development Assistance Act after a long time lack o f a clear and transparent mechanism in management and use ot' ODA and concessional loans contributing to the debt crisis in 1985, with the attempt to create an enabling environment and regulatory framework tor management and use o f ODA and concessional loans in accordance with dcvelopment objectives o f the Phi 1ippines As inandated in the ODA Act, the National Economic and Development Authority (NEDA) takes the lead role as govemm ent agency in ODA-funded project coordination and management; the Department o f Finance is chieíly responsible íor the conduct o f loan negotiations and management, and the Department o f Budget and Management shall secure the budget balance and repayment ability [JF2001] ODA is used for a vvide range o f purposes such as reform o f sectors (heath, education, regulatory framework, and court), development programs 19 (poverty reduction, HIV/AIDS prevention and public administration) and specitìc-purpose projects Also ODA is seen as a Capital source to fi 11 the gap o f State budget and coinpensate the budget deficits regarding social services Aid tlows to the Philippines had been generally declining over a long period, but recent years donors have continucd their provision o f ODA and concessional loans to the Philippines, the on-going ODA to this country remains substantial and is equivalent to 1.5 to 2% o f GDP, the value ot' loans per year in the period 2003 - 2008 is shovvn in belovv table [HK2010]: rable 1: ODA loans and grants to the Philippines on yearly basis Year 2003 2004 2005 2006 2007 2008 ODA 1772 1435 1353 2467 2399 1648 ưnit: million u s doìlar; Source: MEDA, Phiỉippines Despite o f significant amounts o f ODA coming back to the Philippines over the recent years, management and use o f such íoreign aids remain many challenges for the Government o f this country to cope with, especially in terms o f four following pillars [HK2010]: - Macro-economic management issues resulted from huge íoreign loans are seen as major barriers to the PhiIippines, in particular, this country has to spend a share up to - 10% o f its GDP in services dcrived from íoreign loans - Policy issues such as a bunch o f relevant agencies involved in mobilization, management and use o f ODA leading cumbersome administrative procedures and management cost In addition to that, liigh corruption also remains a serious obstacle that the Philippines has been coping with - Syndrome “ Divided hy N” : when the government runs a budget deílcit at high level, one o f its consequences is higher investment costs due to many reasons, o f which political íầctor is the most notable Politicians tend to invest in sectors and localities where political benelìts are often produced instead o f where the investment should be made - Management and technical shortcomings olten refer to poor performance and lack o f technical knowledge from investors Based on the practices and experience from the Philippines, some lessons can he learnt from as below: - There is a strong need to tìgure out a proper strategy for íbreign debt management 20 - Management and use o f ODA loans and grants should be carried out under a simple, consistent and transparent mechanism - Ít is important to promote the alignment o f long-term investment plan with the socio-economic development plan as a vvhole; to minimize political intervention, and persistently to tìght against corruption - Ít is necessary to build capacity and develop Science and technology 2.2 Malaysia Malaysia is a country that has experienced very íầst economic grovvth over the past 30 years Its income per capita grevv up from USD 5,000 in 2005 to USD 6,700 in 2009 and it is expected to reach at USD 15,000 in 2020 In terms o f íbreign loans, in particular in ODA inflows, an explicit and stringent foreign debt government strategy is a prerequisite for success and eíTectiveness o f ODA use in this country As an outcome o f Prudential regulations, íbreign borro\ving o f Malaysia is alvvays at a relatively healthy share The belovv table shows share the results Table 2: Foreign debt o f Malaysia as a share o f GDP Year Percent per GDP 1995 2000 2005 2010 2012 2014 46,9 36,9 45,7 52,8 54,2 54,8 Sonrce: Malaysian Ministry ofFỉnance The Malaysian government issued a La\v to provide regulations on foreign and dom esti c b o r ro w i n g and Capital Controls Under this Lavv, the Mala ysian government is entitled to get domestic and íịreign borrowings The Malaysian Congress imposes clear legal restrictions on foreign borrowings that limit the exposure ot' Malaysian government to massive íbreign debt To this, its íoreign debt strategy is set out in respect to the two ultimate purposes: balancing the demand íor and amount o f grants and loans; and guaranteeing the repayment ability Foreign debt control is the mandate o f foreign inílovvs management Committee which also plays the role o f leading the coordination o f Govemmental agencies [HD2006] Also Malaysia adopts ílexible loans policies and measures to ease the indebtless burden as well as to cope vvith risk o f debt crisis As a result, the Malaysian economy remains healthy and tends to be less vulnerable to shocks and crises Being a country undergoing the ílnancial crisis in Asia during 21 1990s, Malaysia did not turn to the IMP for loans and responded to the crisis on its own, and its economy could recover remarkably three years later In terms o f ODA management, the Malaysian government manages the aid under centralized and selective method in vvhich the Economic Planning Office is the only unit responsible for planning, approving and making decision on budget distribution for development goals ODA Capital is largely limited to the areas o f hunger elimỉnation and poverty reduction, and capacity building [ V 12006] In its đevelopment process, the Malaysian government had mobilized aid actively throughout the years o f 1970 - 2000, and the total ODA inf!ows presented for 17% o f the country’s budget for investment and development With an eíTective ODA utilization and proper foreign debt control mechanism, Malaysia experienced strong contribution o f ODA aid to its most drastic development period, and thus Malaysia has moved from an ODA receipt country to a development partner, in particular, transferring experience, technology advance and knowledge ỊMA2008] The Malaysian government creates the most íầvorable enabling environment whcre prọịect management unit can implement their prọịect on schedule and adopt a clear and tầst approval process in order to promote the progress and reduce transaction costs Additionally, the government also applies modern technologies in tìnancial monitoring and management to enhance the transparency and minimize corruption More importantly, strong decentralization also enables local-level agencies to be more ílexible in addressing project bottlenecks [NT2013] Keeping in mind the importance o f effective monitoring instruments, the Malaysian government pays great attention to monitoring and evaluating evcry step in the \vhole cycle o f ODA tìnanced projects The evaluation is primarily based on the joint coordination between donors and the Government, o f which the key teature is to harmonize the evaluation procedures o f the two parties with the stress on making the govem m ent’s evaluation system exactly fít with the intemational standards o f evaluation set out by the donors Evaluation indicators mainly focus on the effectiveness and effíciency o f the prọịect with respect to the overall national strategies and policies, as vvell as expected speciílc objectives 22 In sum, \ve can learn some following lessons from thc good practices o f Malaysia in ODA mobilization and use: - The architecture and mechanism for foreign aid and debt management should be prudent, consistent and centralized - The selection, approval and nionitoring should be thoroughly carried out and in consistence vvith the common development goals It is crucial to make use o f experience o f donors in design, íòrmation, implementation, monitoring and evaluation o f projects - The government has to ensure proper, sulTicient and timely provision o f required resources and Capital contribution 2.3 China Different from Malaysia, intemational debts o f China are strictly managed To keep control is an essential component o f Chinese policy, its government does not encourage increasing íoreign loans, including ODA to invest in its development, and it takes more íocus on domestic resource mobilization from FD1 and bond issuance instead As a result the ODA inflows to China seem to be very modest, for instance in 2003, the total amount o f ODA grants and loans just reached at USD 1.3 billion, vvhich was translated to only 0.1 percent o f this country’s GDP [HM2005] One hand, the Chinese government still speaks out their acknovvledgement o f the positive impacts o f ODA on its retbrms and development, in reality China agrees to receive ODA grants and loans in order to pursue its ultimate underlying purpose o f strengthening the bilateral relation \vith international donors rather than to support the socio-economic development China therefore gives prominence to the importance o f management and use o f O DA aids From 2000 it has been made clear that the basic structure for receiving and managing aid is consistent, and Ministry o f Finance and State Development and Reform Commission act as leading bodies The Ministry o f Finance is responsible for raising all loan aid and also supervising the use of aids and the Commission has a function o f controlling the total amount of annual investment including tbreign funds, and identiiication o f areas where should be given the priority for investment These bodies will be entitled to approve all the domestic investment projects prior to the implementation Other Ministries, Central and local agencies will be responsible for implementing such 23 projects in coordination with the Ministry o f Finance to kecp monitoring every stage o f the project cycle IV12006] Receiving and repaying O D A loans in China are undertaken in contbrmity with the consistent rule vvhere the aid beneíiciary or end-user will have the obligation o f m aking repayment For this rule, it requires the benìciary to design proíitable projects and to demonstrate their repayment ability From the experience in O DA management in China, we can conclude Tải FULL (53 trang): https://bit.ly/3l94g3E Dự phòng: fb.com/TaiHo123doc.net Set a clear and good partnership strategy with donors, and vvell- some lessons learnt as below: - prepared and demand-driven action plans - Have a consistent cooperation mechanism, and coherent monitoring and evaluation plan - Build a clear and consistent repayment rule that underlines the repayment obligation o f the project owner 2.4 Experiences from other countries In Africa , World Bank has been the largest ODA donor o f many countries such as Zambia, Congo , and Tamania since 1960s In the period ot' 1960 1990, World Bank had provided several billions u s dollar to support their socio-econoinic developm ent and it was thought that these aids seemcd to contribute to the economic growth and improvement o f living standards In íầct however concrete im provements and measurable eíTectiveness o f such aids have not been ílgured out There has been existence o f poor-invested proịects that have resulted in poor social vvorks \vithout sustainable maintenance [XD2006] In Indonesia, this country had consistently mobilized and used ODA grants and loans for several years but had not achieved any remarkable effectiveness To improve this, the Indonesian government made changes in the process o f mobilization, managem ent and use o f ODA grants and loans [NT2013]: + Tighten the regulations on developing proposals and investment items which the ODA and concessional loans should be used for + Have extem al consultants involved in the process o f preparing project documents, negotiation and aid use together with the Government 24 + Adopt the rule in vvhich next loans will be undertaken once the on-going projects end; the schedule is ensured and safe and elTectiveness are taken into Tải FULL (53 trang): https://bit.ly/3l94g3E consideration Dự phòng: fb.com/TaiHo123doc.net -I- Kocus on the role o f Ministry o f Justice in legal consultation to avoid any overlapping cooperation actions In Thailand, the governm ent also commenced to receive ODA in I960s but the amount was relatively low, some dollars per head yearly From the mid1970s through the 2000s, Thailand increased the ODA amount (to USD per head yearly) and now it is em erging as a donor for other countries In short, Thailand used O D A for 40 years and the highest reached USD 15 per head each year Still, in Thailand, aid was an important source o f iinancing development expenditures; the fígures in 1960 indicated this importance GDP o f Thailand was a half o f Philippines but in the ]980s, the GDP o f two countries were relatively equal, and in 2000 GDP o f Thailand \vas double that o f Philippines In Poland, O D A and concessional loans have been mainly used in human resources investment and institutional capacity building Management and use o f ODA in Poland is rather strict and complicated The role o f donor is predominantly given the priority and thus they can require the government to make changes in laws and institutional structures for more effectiveness o f ODA In addition to that, Poland also pays great coneern to auditing and accounting, especially the great focus is given to external auditing o f managerial systems for anti-corruption The Polish government suggests that continuous auditing and inonitoring will Help track the proịect properly and promote the implementation progress Finally in Korea , the governm ent received ODA since the 1960s In the tìrst ten years the O DA to this country was at USD 10 per head each year but this grew down in fo!lowing years and stopped ODA aids in the 1980s Since 1993, the Korean governm ent has become the ODA donor In sum, the ODA to Korea tor the duration o f 20 years vvas used for development goals [TT2014] As a matter o f fact so íầr, Korea has seen one o f the countries with the miraculous economic grovvth and social development, including extremely eíTective use o f ODA grants and loans 25 2.5 Lessons for Vietnam Based on practices and experience in management and use o f ODA and concessional loans from some countries in the world, we can conclude some lessons tor Vietnam to learn as belo\v: Firstỉy, it is crucial to emphasize the policy o f protection o f sovereignty and autonomy in management and use o f ODA and concessional loans except for emergency aids With the benetlts that aids bring there are also accompanying political and economic conditions and terms required by donors, these are considered “outcomes” o f their external affairs poỉicies or íoreign intluence ỉt thereíore requires prudent and selective ODA mobilization to strengthen multinational relations vvhilst p r o m o ti n g the effectiveness o f ODA in the national development goals Secondly, there is a need to appropriately ackncnvledge the importance and role o f ODA íunds for the best effectiveness To this, a master plan for raising ODA and identilỳing where ODA should be given priority under different economic development periods Thirdly, \vell-prepared strategies for use o f ODA and concessional loans consistent with effective foreign debt plan are needed In particular, foreign debt should bc maintained at a proper level to ensure the repayment ability even in a case o f crisis Fourthly, it requires taking initiative in raising Capital O f course ODA plays in important role but domestic resources are decisive For dcveloping countries, ODA remains an essential development resource but more importantly a catalytic element to leverage the internal potential o f these countries Brieíly ODA should be complementary to - but not substitutes for domestic resources Fifthly, to emphasize the effectiveness o f ODA and concessional is necessary Ít means that the quality o f prọịects tunded by ODA is more important than the quantity o f prọịects From this point o f view, the country can avoid risk o f accum ulating íịreign debt burden Sixthỉy, it is necessary to create a comprehensive legal system and policies o f ODA mobilization and usage for stabilizing, harmonizing and linking tầvorable and explicit administrative procedures 6752568 ... follows: ? ?Strategy to use Official Development Assistance (ODA) in ncar future in Vietnam” In order to respond to above research question, this paper vvill concentrate 1''urther on following issues:... mendations in terms of: orientation; creating prọịect documents; administrative procedures; managing and implementing prọịects; m onitoring and e valuating prọịect will need to be applied in order to. .. 2014 - 12 Aim: The aim o f this thesis is to study the strategy to use Offĩcial Development Assistance (O DA ) in near tuture in Vietnam, especially in attraction, management and utilization