Vietnam needs a new strategy for the more effective management and use of official development assistance (ODA), said a senior Vietnamese official.

ODA commitment to Vietnam from 1993 to 2012 amounted to nearly 78.2 billion USD, according to the Ministry of Planning and Investment. International donors highly valued the country’s effective use of the source, and pledged to continue to cooperate with and support the country in its future development.

At the same time, the donors said as Vietnam has entered the rank of middle-income countries, it will see shrinking assistance sources in terms of quantity and preferential level. Therefore, they urged Vietnam to consider using part of ODA capital and low-rate credit for developing countries for production and development investment.

To ensure the effective use of ODA sources, Minister of Planning and Investment Bui Quang Vinh suggested implementing solution packages of policy improvement, simplifying procedures and facilitating the implementation of invested projects.

The country should also revise and supplement related legal documents such as the Law of Construction, Law of Investment, Law of Bidding and regulations on ODA and preferential loans in the Law of Public Investment, the minister added.

Sharing the view on reduction in ODA flow and increase in less-preferential loans, WB Country Director Victoria Kwakwa proposed the Government focus on its green growth and climate change strategies, saying that they “position it well to benefit from planned new climate and green financing platforms at the international level once they come into place”.

Representatives from the Japan International Cooperation Agency (JICA) said that development cooperation will be more effective and sustainable thanks to the Government promptly refreshing the decree on ODA management and use and other preferential loans from donors in April this year and changing the donors’ meeting into the Vietnam Development Partnership Forum this year.

Meanwhile, Pratibha Mehta, UN Resident Coordinator in Vietnam, expressed her belief that with the future progress, Vietnam will likely become a donor first of all in terms of knowledge sharing in poverty reduction and social development experience with other countries.

Among the nearly 80 billion USD in ODA commitment to Vietnam , agreements have been signed for the use of 63 billion USD with 42.09 billion USD already disbursed. Japan is the largest among Vietnam ’s 50 ODA providers with 24 billion USD, accounting for 30 percent of the total commitment, while Finland is the most long-time donor, starting 40 years ago.

In 1993, Vietnam was one of the poorest countries in the world with income per capita of about 100 USD and low indicators of social progress, said Kwakwa at the celebration of 20 years of development cooperation in Vietnam last week.

“Today, Vietnam is an emerging middle-income country with a 154 billion USD economy and income per capita of around 1,700 USD. Poverty has declined from 58 percent in 1993 to about 10 percent in 2012 with over 30 million people lifted out of poverty. Indicators of social welfare are now better than for most other countries at similar levels of per capita income and comparable even to some countries with higher incomes,” she said.

In addition, support for socio-economic development policies from foreign donors has created trust and encouraged foreign private businesses to invest in Vietnam . Foreign direct investment (FDI) contributed two percent to the country’s gross domestic product ( GDP ) in 1992. The figure grew rapidly to 18.97 percent last year.-VNA