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Int'l Donors Pledge $3.4Bln for Vietnam in 2005

International donors on Thursday pledged to provide Vietnam with $3.4 billion in official development assistance (ODA) in 2005 (up $600 million against 2004) at the World Bank-chaired Consultative Group meeting in Hanoi, while pushing the Vietnamese government to continue reforms for a higher capital disbursement ratio.

Last year, donors had vowed to grant Vietnam $2.8 billion, however, the disbursed sum for the whole year is expected at only around $1.5 billion, compared with $1.6 billion in 2003 (pledge $2.5 billion).

With an annual economic growth of around 7%, Vietnam needs around $1.8 billion of ODA to maintain sustainable development, however, the yearly average ODA inflow stood at only $1.1 billion over the past 10 years, experts said.

The Vietnamese government has recently announced that the country targeted total development investment in 2006-2010 to equal 37-38% of the country's GDP with 35-40% funds from overseas sources (mainly ODA and FDI inflows).

It expected to obtain total ODA in the period of $14-15 billion including $6-7 billion worth of pledged ODA transferred from the 2001-2005 period.

Nonetheless, with the current slow disbursement speed, Vietnam could not reach the targets, some experts said.

During the meeting, foreign donors urged Vietnam to accelerate the process of reforms (especially legal reform and state-owned enterprise reform including state-run banks), raise transparency, fight against corruption and red tape, boost poverty reduction at a rapid pace and make full use of its potential.

According to recent survey conducted by the Transparency International, Vietnam ranked 102nd of 146 nations in term of corruption, which is hampering foreign investors from doing their business in the developing country.

Vietnam must improve transparency in public financial management, audit and inspection, representatives said at the two-day CG meeting.

Financial and banking reforms are of great importance when fast credit growth sparks concerns that quality of growth is uncertain, said Mr. Ishii, an official from the International Monetary Fund, or IMF.

Meanwhile, according to the WB country director Klaus Rohland, it is necessary to consolidate the market economy, and the government needs to get involved in areas out of the market's reach such as poverty reduction and social activities. In the next five years Vietnam will complete its transition to a market economy, and the first thing to do is WTO entry, he said.

Regarding Vietnam's foreign debt, which is now around $15 billion ($3.5 billion of WB), Shogo Ishii said the figure was not high for a developing country. He affirmed that the IMF is not worried about Vietnam's capacity to pay debts.

On this matter, Klaus Rohland said that a yearly amount of foreign debt less than 10% of exports (Vietnam's 2004 export expected at $25.5 billion) is acceptable, as these foreign loans are low interest and long duration (90% are preferable loans), and Vietnam is fully able to pay them back.

Speaking at the meeting, Deputy Prime Minister Vu Khoan expressed his thanks to international donors and their countries for actively contributing to the development of Vietnam during the past years. He said this was not only demonstrated through the size of grants, but also through the consensus and support from countries and international organisations for Vietnam's policies.

He also hoped to receive more support from international donors at the next mid-CG Meeting to be held in March next year.

Investment and Planning Minister Vo Hong Phuc affirmed Vietnam's determination to continue enhancing the quality of development, competitiveness and effectiveness of the economy, particularly in the financial and baking sectors.

The minister also emphasized that the Government will continue to improve institutions, policies, public administration reform, and the quality of State apparatus.

In details of donors' commitments for Vietnam, about $2.14 billion was pledged by individual nations, with $100 million coming from international non-governmental organizations and another $1.2 billion from multilateral institutions like the World Bank.

Japan remains the top single donor at $902 million, followed by France with a pledge of $444 million.

According to the MPI, since 1993, international donors have committed $25.39 billion for Vietnam, of which 15-20% was non-refundable aid and the remainder, preferential credits. By late 2003, Vietnam had signed agreements worth $21.5 billion in ODA capital but only around US$12.5 billion had been put into use. (The People Dec 3 p8, Labor Dec 3 p1, Vietnam Economic Times Dec 3 p4, Pioneer Dec 3 p3, International Affairs Reviews Dec 3 p1, Capital's Security Dec 3 p13, VNA Dec 3, VoV Dec 3)

Four More Firms Get Licenses to Provide Telecoms Services

The Ministry of Post & Telecoms has recently licensed four more local companies to provide telecommunication services.

Accordingly, Vietnam Airlines will be allowed to provide Imasat satellite mobile services for the aviation industry.

The Vietnam Military Telecoms Company (Viettel) will be allowed to provide satellite fixed telephone services. Thus, Viettel will be able to expand its landline telephone network to remote and mountainous areas, where it will be too expensive to lay cables.

VP Telecoms Co. under the Electricity of Vietnam will provide earth mobile service.

Saigon Post & Telecoms Service Joint Stock Co. (SPT) will expand its landline telephone service nationwide. Currently, SPT provide the service in Ho Chi Minh City only. (Vietnam Economic Times Dec 3 p3)

PM Pledges Greater Efforts to Fight Corruption

Prime Minister Phan Van Khai yesterday vowed to step up the crackdown on corruption, which he considered the greatest threat to Vietnam's stability and development.

As the first-ever Vietnamese Prime Minister to stand the parliamentary interpellation session, Mr. Khai said that corruption and theft of State property were the root causes of the collapse of the Soviet Union, and warned the same could happen to Vietnam if appropriate action was not taken.

He admitted that corruption is at a high level in Vietnam and it is badly affecting the country's investment environment. [Vietnam detected 9,454 corruption cases causing total losses of more than VND10 trillion or $640 million in the past ten years, according to the country's Police Ministry.]

The PM also accepted his responsibility for several graft scandals recently exposed in various sectors and localities nationwide.

"As the leader of the government, I am fully aware of my responsibility [for these cases] and I attach great importance to studying the causes and to learning more," the PM told National Assembly deputies during the third day of the NA hearing.

In order to toughen the fight against rampant corruption, the PM said the government would issue regulations detailing punishment of the leaders of agencies where corruption is uncovered.

Mr. Khai also stressed the importance of forming an anti-corruption steering body that is participated by some high-ranking leaders of the Party and the State to instruct all agencies that fight corruption, he said.

The PM also emphasized the importance of intensifying inspections at each agency and encouraging the public to develop their supervisory role.

He also pledged to continue prosecuting officials for corruption.

"The Prime Minister never tolerates corruption," he said. "Violators, whatever positions they hold, will be judged in accordance with the law."

Apart from anti-corruption measures, Mr Khai also talked of the task to build transparent institutions to ensure that there would be no chance for corruption to take root.

When asked about measures to realize socio-economic development goals for next year, the PM said the government will encourage more investment, especially from the private sector, and will strengthen its administration of State-funded infrastructure projects.

At the NA hearing yesterday, Mr. Khai also said the government would concentrate its efforts on creating breakthrough improvements in the education sector in 2005. Top priorities will include measures to relieve study overload burdening students and stopping examination cheats, he said.

On the same day, Mr. Khai submitted a proposal to the NA to appoint Acting Minister Cao Duc Phat as the official minister of Agriculture and Rural Development to replace Le Huy Ngo, who was dismissed for "dereliction of duty" during the last NA session in June.

Mr. Phat, 48, was born in northern Nam Dinh Province, has a PhD in economics and advanced degrees in politics. He graduated from Harvard University in the US. He was formerly deputy secretary of the An Giang Province Party Committee and deputy minister of agriculture and rural development.

The NA plans to adopt a resolution on the appointment today, December 3, before it closes its ongoing session.

The NA's sixth session opened on October 25 and is scheduled to conclude by the end of this week. It questioned six cabinet members, including PM Khai, however, most of them failed to satisfy NA deputies as well as the wide public. (Young People Dec 3 p1, Labor Dec 3 p1, VNS Dec 3 p1)

ADB to Lend Vietnam $55Mln for Education Improvement

The Asian Development Bank (ADB) will lend $55 million for Vietnam to help the country achieve universal quality secondary education by 2010, according to the bank's announcement December 1.

The project is a follow-up to the Lower Secondary Education Development Project, which started in September 1997, and which is due for completion by this year-end through a $50-million soft loan by the regional lender.

"The new project will help the Ministry of Education and Training complete the introduction of the new curriculum and textbooks, as well as related in-service teacher's training," the bank's statement says.

It says the project will directly benefit about 366,000 students, of which 266,000 are disadvantaged and 100,000 are school dropouts who return to class, as well as about 72,500 teachers and education administrators.

It will improve facilities and equipment of lower secondary schools, enhance the teaching of foreign languages and the use of info-tech, support vocational and continuing education, and improve teaching contents and methods.

The project will also promote access to lower secondary education in disadvantaged areas by constructing and upgrading school facilities and focusing on the poorest areas, the regional bank says.

This loan, which covers two-thirds of the total project cost of $80 million, comes from the bank's Asian Development Fund, and carries a 32-year term, including a grace period of eight years. Interest is charged at 1.0% per annum during the grace period and 1.5% per annum after.

The Vietnamese Government will contribute $25 million toward the project. The Government is targeting a nationwide net enrollment rate of 80% by 2005 and 90% by 2010 for lower secondary education. (Saigon Times Daily Dec 2 p3)