NA to exercise oversight of ODA funding

(VOV) – Over the past two decades, official development assistance (ODA) has been a key source of funding for infrastructure projects, which has helped Vietnam make great socio-economic strides.

Foreign countries have pumped around US$78 million of (ODA) funds into Vietnam, which has largely been used quite effectively.

However, there are legitimate questions as to whether or to what extent the nation should continue to rely on the preferential capital source for continued development during the renewal process.

There are also lingering questions as to the extent of fraud, waste and abuse in the ODA funding process, however limited that may be, and the full ramifications and costs of such abuse.

Though the country effectively uses ODA funds, there are a number of smaller abuses and a few more serious crimes related to its use, says National Assembly (NA) deputy Le Thi Nga, Vice Chairwoman of the NA Judicial Committee.

Losses, wastefulness, and corruption in a number of ODA-funded projects have badly affected the quality of a few projects and damaged Vietnam’s reputation for donors, as typified by the PMU18, Huynh Ngoc Sy and JTC scandals.

Le Thi Nga, Vice Chairwoman of the NA Judicial Committee

It’s noteworthy that despite a number of inspection and supervision mechanisms, the big violations have only been detected by foreign partners, she says.

Nga appreciates the timely settlement of the recent JTC scandal by the Ministers of Public Security and Transport and people’s supreme procuracy, saying it demonstrates the State’s clear stance on strictly dealing with violations related to ODA.

Nga analyses that ODA is mainly managed by the Government’s decree 38 and donors’ regulations, however, these regulations are complicated, resulting in low law enforcement efficiency.

The decree and regulations on ensuring publicity, transparency and responsibility are just in principle, but they won’t effectively prevent abuses or corruption related to ODA funds, Nga adds.

The legal framework on ODA reveals two major loopholes. The NA, who has responsibility for the public debt is not proactively overseeing the ODA funding process and decision making process.

Secondly, citizens who ultimately will have to repay the ODA funds along with finance costs through their taxes are just sitting on the sidelines as well, and are not exercising a strong voice in the ODA funding process.

NA deputies have proposed the NA issue laws on management of ODA using, focussing on regulating criteria to get ODA capital, publicising ODA capital, allocation and ODA-funded projects as well as rights of citizens and relevant agencies in ODA enforcement.

Certainly, ODA is part of the public investment and debt. It also heavily influences the country’s national prestige and reputation, but the NA has historically not adequately exercised proper oversight, Nga says.

In fact, over the past two decades, although several violations have produced a stir in public the NA has not conducted any outright direct supervision of the ODA funding process.

Its Economic Committee and Committee on Finance and Budget have not supervised the issue yet, she adds.

It is very important to clearly understand that misuses of ODA funds are slowly, pushing up the public debt, Nga says, asking the NA to implement stricter ODA supervision.

The NA should also implement a national strategy to reduce and eventually stop the use of ODA funding as the country is becoming overly dependent on it, a failure of development strategy .

Accurate awareness on ODA

NA Deputy Nga underscores the need to have a clear understanding that ODA funding; including its misuse comes with a high cost. In the future as Vietnam becomes more affluent ODA and the finance cost must be repaid.

Nga quotes Minister of Planning and Investment Bui Quang Vinh as saying it’s concerned that a number of officials and citizens, even local leaders simply think ODA is free.

They are borrowing as much ODA capital as possible, not exercising good financial management practices which could lead to devastating future consequences.

Vietnam should learn from the experiences in ODA use from Singapore, the Republic of Korea and Thailand. They only use ODA in developing essential infrastructure to serve socio-economic development and poverty reduction.

They do not borrow ODA for small or super projects and plan to end borrowing ODA in a near future.

Raising full awareness of the true costs of ODA funding to society in order to effectively use it and the exercise of proper oversight by the NA and citizens of the nation are very important, Nga concludes.