ADB Helps Viet Nam Implement Development Assistance Projects

MANILA, PHILIPPINES (23 November 2007) - The Asian Development Bank (ADB) is providing a $700,000 grant to help Viet Nam improve its ability to implement official development assistance (ODA) projects and programs.

The technical assistance is estimated to cost $800,000. Viet Nam will cover the balance.

“The grant will help Viet Nam strengthen its ability to absorb development assistance and improve its efficiency in preparing, implementing and evaluating ODA projects and programs. The grant will also support implementation of the Hanoi Core Statement on Aid Effectiveness, which the government of Viet Nam and the donor community endorsed in 2005,” said Eri Honda, senior project management specialist of ADB’s Viet Nam Resident Mission.

Combined efforts by the government and development partners have enhanced the country’s economic performance. The poverty rate has decreased to 18.1% in 2006 from 58.1% in 1993. Average per capita income rose to $712 from $288 during the same period. The government’s Socio-Economic Development Plan (SEDP) for 2006-2010 calls for cutting the poverty rate to 10%-11% by 2010.

The Government has issued a Strategic Framework for ODA Mobilization and Utilization 2006-2010 to support the implementation of SEDP 2006-2010. Development partners, including ADB, are ready to increase their assistance to Viet Nam as the country accelerates reforms and economic development. During a consultative group meeting in December 2006, a record high $4.4 billion in development assistance was pledged.

However, the country’s capacity to absorb the assistance remains a serious concern. While ODA projects usually achieve their objectives and the outcomes are sustainable, most projects experience substantial implementation delays. ODA commitments over the past five years totaled about $11.1 billion. Only $7.8 billion was disbursed, well below the target of $9 billion.

The ADB 2007 Country Portfolio Review Mission was concerned with the deterioration of disbursement in Viet Nam. Disbursements in 2006 fell to $184.1 million from $223.7 million in 2005. The first ten months of 2007 saw $153.4 million disbursed.

“Slow project implementation has significant consequences on the achievement of Viet Nam’s development objectives, as well as on the cost of the investments,” said Ms. Honda.