The MPI has proposed attracting ODA to key areas and highly important projects. It is necessary to factor in public investment sources, the borrowing limit and debt servicing coverage when attracting and using ODA. It should be guaranteed that ODA is only used for development and not for recurrent spending. In order to improve efficiency in attracting ODA and foreign investment capital, Vietnam needs to solve well the following issues:
1.1. ODA management
Completing legal documents and innovations in ODA project management procedures and procedures on the basis of combining reference with donors' standards, especially for procurement procedures; compensation, migration and resettlement; financial management of programs and projects... ODA should be exploited in terms of providing policy consulting for the government by donors such as how to write polices, decentralize power, reform the economy and
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allocate budgets prudently. It is a useful tool for Vietnam’s development in the long term.
Vietnam should narrow the gap between donors and Vietnam in order to attract more capital. Though the main target of international assistance is hunger elimination and poverty alleviation, most donors and the Vietnamese government emphasize on the sustainability of such capital as well as the quality of economic growth. Foreign donors are often very interested in Vietnam’s effort in reforming the economy, particularly in state-owned companies and the banking system.
Plans and strategies to gradually reduce ODA capital should be studied, especially conditional ODA, and at the same time, to attract other foreign investment sources such as FDI. With this approach, Vietnam not only maintains the increase in total investment but also improves the efficiency of all capital sources, including ODA.
It is necessary to carefully assess the impacts of ODA loans on the economy before accepting them. As the borrower, Vietnam still can negotiate on the loan conditions. In the credit market, borrowers previously went to banks to apply for loans but now banks need to look for well-performing enterprises and feasible projects and offer to lend to them.
ODA should be made available to private businesses, NGOs and community organizations. This is because these groups are in real need of capital. This also contributes to the anti-corruption process and the removal of red tape from the administrative system.
1.2. Attracting and speeding up ODA disbursement rate Promptly prepare reciprocal capital sources for ODA programs and projects so that these projects can reach the highest and fastest disbursement rates.
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Investment priorities should be determined when using ODA capital and improving project supervision, monitoring and evaluation.
At the same time, improve the capacity and awareness for the staff involved in managing and using ODA. The nature of ODA is still a loan and is obliged to repay, so it is necessary to eliminate the idea of
"asking for ODA" in a part of officials at all levels, leading to inadequate attention to effective use. This source of capital.
1.3. Enhance capacity of implementing projects by ODA Enhance capacity includes interpersonal skills, the ability to work with agencies, social organizations, awareness and building skills. To improve these kind of capacity, there should be a comprehensive environment in which everybody has a chance to show their skills and their ability to apply them under pressure. This environment should also create favorable conditions for the process of capacity transfer between individuals in the community/organizations. It will motivate everyone to improve themselves constantly based on essential skills they have been trained in directly or indirectly.
In order to level up the effectiveness of improvements in capacity of ODA projects, organizations that take over the projects need to decide on the key element to focus on (with respect to the subject of improvement). Focusing on improving key units and staff does not mean ignoring other elements, but concentrating on maximizing the usage of resources. Therefore, when carrying out projects, organizations need to analyze the capabilities of the whole system to highlight the strongest and weakest aspects.
Strengthen capacity and drastically improve the implementation of ODA projects, use more focused to invest in building large-scale socio-economic infrastructure and create spillover effects on the overall development of country.
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It is necessary to have appropriate policies and institutions to create an environment for new aid models. In particular, encouraging the participation of private and non-governmental organizations. In addition, close cooperation with donors to access new aid models is needed, to improve efficiency, reduce procedures and contribute to improving management systems according to international standards.
2. Specific policies and plans to improve the effectiveness of