The World Bank (WB) welcomes improvement in the disbursement of public investment in Viet Nam and hopes to see similar improvements in the disbursements of official development assistance (ODA) funds.

World Bank Country Director for Viet Nam Carolyn Turk

WB Country Director for Viet Nam Carolyn Turk made that statement in an interview with the Viet Nam Government Portal ahead of the national conference designed to seek ways to foster disbursement of public investment and ODA. 

As of October 2020, the World Bank in Viet Nam has a portfolio of 39 active projects, amounting to a total commitment of US$7.4 billion, according to Turk. 

These projects support a wide range of areas of strategic importance to Viet Nam, from higher education, grassroots health care, environmental protection, climate change to infrastructure development and most recently COVID-19 response.

The disbursement of World Bank funding improved in financial year 2020 (FY20). The disbursement ratio reached 14% which is 4.4 percentage points higher than in FY19 (9.6%). Despite the improvement, the disbursement ratio is still below the FY20 average for the EAP region and the Bank of 18.6% and 18.7% respectively. It is also lower than the three-year FY14-16 average of 19.2% in Viet Nam.

Unfortunately, the upward trend does not continue in FY21. In the first quarter we saw a 20 year low in our disbursement ratio.

The WB welcomes the greater attention and efforts to improve disbursement of public investments, including ODA projects. 

Regarding major bottlenecks causing delays in many ODA projects, Turk said there are several reasons leading to slow implementation of World Bank funded projects, including institutional and implementation challenges in different phases of the project.

Reasons for slow implementation and disbursement include (i) approval processes which, for example, lead on average taking projects 10 months from approval to effectiveness and nearly 19 months from approval to first disbursement, (ii) delays in signing on-lending agreements between provinces and MOF, (iii) limited project readiness for implementation, for example, because of the reluctance to commence procurement processes before funds are secured”.

Indeed, the slow disbursement of public investment in recent years, including ODA investments, has become a major concern of the Government of Viet Nam. 

As such, the Government has acted swiftly, and Prime Minister’s Directive No. 11, dated March 4, 2020, is clear evidence that the Government intends to take decisive action to strengthen public investment, including ODA resources, to support the economic recovery and mitigate negative impacts of COVID-19.

We hope that the Government will continue these meaningful reform efforts, to accelerate the efficiency and effectiveness of ODA funding.

The WB Country Director said she welcomed the Government upcoming  conference as it clearly indicates the Government's strong commitment to accelerate disbursement of ODA funded projects.

As stated before, there are several sets of issues and thus there are corresponding sets of solutions. From the Bank’s view, strengthening ODA management by streamlining the approval process, and delegation of authority for certain procedures/requirements are of utmost important so that implementation issues can be addressed in a timely manner. 

And finally, though resource allocation has seen significant improvement, Turk expressed hope that adequate allocation of budget to relevant project entities should be provided in a timely manner.

She expected that participants to the event will bring concrete ideas and solutions to solve the different bottlenecks from project initiation to implementation, so that ODA project in particular and public investments in general bring quicker benefits to the people of Viet Nam.