Could you please make some comment on how Vietnam has been using Japan's ODA?
In the 20 years since we re-started ODA provision to Vietnam, Japan has been supporting Vietnam’s economic development as the leading donor. The economic growth of Vietnam is important not only to the improvement of its social welfare, but also to the stabilization and development of East Asian region. Therefore, Vietnam has been one of the prioritized countries in our ODA policy. Actually, the volume of Japan’s ODA to Vietnam has continuously been increasing.
In the last fiscal year, we have provided ODA loans about $2.7 billion (excluding the amount carried-over from FY 2010 due to the Great East Japan Earthquake) that is the biggest amount ever.
In our development cooperation with Vietnam, the two governments has worked together to strategically allocate ODA from Japan into important economic infrastructures, such as Haiphong Port, National Highway No5 and Tan Son Nhat International Airport. As the main gateways and arteries, they have contributed much to Vietnam’s development and integration nationally, regionally, and globally. Besides, Japan’ ODA has been effectively utilized in numerous roads and bridges in countryside, as well as in health care centers and so forth. I am proud that Japan’s ODA has contributed to the Vietnam’s growth and welfare so far, which is remarkable as all of us know.
How much has Japan disbursed for these projects?
As of the end of 2010, Japan’s ODA disbursement to Vietnam totaled nearly $10 billion, which means Japan is the biggest bilateral development partners of Vietnam. In the last fiscal year, from April 2011 to March 2012, the total amount of about $1.35 billion was disbursed.
These disbursement figures indicate that most of projects have been implemented nearly as scheduled. Still, there are some cases where construction works are delayed due to land acquisition problems, as well as cases where the bidding process is taking unexpected time.
I would like to ask the government of Vietnam for its further efforts to smooth implementation of projects.
Will Japan continue fueling Vietnam with more ODA in the country's infrastructure projects?
We will continue to assist Vietnam’s economic development, especially its realizing the goal of becoming modern industrialized country by 2020. In other words, we would like to support Vietnam can better adapt to the market economy system and enhance its competitiveness in a sustainable manner. For this, we will utilize our ODA effectively in improvements of institutions and governance, human resource development, infrastructure projects, as well as in several areas for reducing social and environmental vulnerabilities.
Among them, infrastructure development with technical assistance will still continue to be the main focus of Japan’s ODA to Vietnam. At present, we are assisting the development of transport infrastructures crucial to expanding trade and investment, such as Nhat Tan bridge, Cai Mep port and Lach Huyen port, as well as energy infrastructures for realizing stable power supply, such as O Mon power plant and Nghi Son power plant.
Besides, to advance infrastructure development further and more strategically, we have been discussing with Vietnamese counterpart on the overall planning of important infrastructures of Vietnam. The discussions have made clear the importance of attracting private investors through PPP and other schemes in order to meet great demand for infrastructure development. PPP has also been one of the focal topics in the Vietnam-Japan Joint Initiative (phase 4) as well, and we have just finished it with concrete suggestions from the viewpoint of private investors. I expect these policy dialogues are useful for the government of Vietnam to further improve institutional conditions.
What challenges can face Japan's government when it decides to give more ODA to Vietnam?
The most important thing here is to complete ongoing projects as planned, that is, as scheduled and with good results. In the context of tight budgetary condition of Japan, we have to meet the requirement of using ODA more efficiently and effectively. And the outcome of existing projects shall be the base of accountability for the future ODA policies.
As noted above, there are some projects behind schedule. Delays of important infrastructure projects not only incur additional costs but also hinder economic development of Vietnam accordingly.
Apart from this, with regard to good results, ODA projects need to be appropriately connected to comprehensive policy framework. Taking an example from urban mass rapid transit project, what is needed is not just building the railway itself but also creating effective operation systems, mobilizing measures to attract passengers and so forth. It is important for the government of Vietnam to set strategic priorities in its economic development so as to arrange effective policy measures including ODA utilization appropriately. We are ready to make our best efforts to support the Government of Vietnam in this area as well.
At this CG meeting, how much ODA will Japan commit to Vietnam? Why?
In this fiscal year, we continue our development cooperation to Vietnam effectively and broadly which includes expansion of program loans like Support Programme to Respond to Climate Change that have budgetary-supports effects. As a result, in the first half of this fiscal year, Japan has already pledged to provide about $1.4 billion of new ODA loans.
Although this would depend on the progress of project preparation by the government of Vietnam, I hope that, overall this fiscal year, Japan will be able to provide the amount nearly $2.6 billion, equal to what we have pledged last year.