Vietnam will only use ODA and preferential loans for development investment, not regular expenditures. (Photo: Quang Phuc)
This is stated by the Minister of Finance Mr. Dinh Tien Dung at a recent meeting with the Japanese delegation.
Accordingly, Japan is currently a bilateral development partner providing the largest ODA, concessional loan for Vietnam, and also a partner granting important capital, mainly for infrastructure development projects such as transportation or energy.
Along with that, Japanese enterprises have always been ranked second in foreign investment in Vietnam.
“The preferential levels and conditions of Japanese ODA loans are basically in line with Vietnam’s priorities for socio-economic development, in the spirit of ensuring harmonization of interests and compliance of laws and principles between the two countries”, Minister Dinh Tien Dung stressed.
According to the Ministry of Finance, Vietnam will continue to select and prepare effective public investment projects for sustainable socio-economic development while ensuring public debt safety ratios and not exceeding the budget deficit approved by the National Assembly.
Besides, Vietnam also takes advantage of the remaining ODA from multilateral donors to mobilize and use for infrastructure development.
More specifically, head of the financial sector said that Vietnam will only use ODA and preferential loans for development investment, not regular expenditures.
ODA loans are prioritized for programs and projects in the fields of health, education, skills training, climate change response, environmental preservation, and selective essential transport infrastructure.
In addition, priority will be given to large-scale infrastructure projects that are capable of generating revenue to repay debts and loan projects for re-lending.
“For a number of important programs and projects that need priority and are unable to generate revenue or are subject to other allocations, the Prime Minister shall consider and make decision on the use of preferential loans for each specific case”, Minister Dinh Tien Dung emphasized.
Regarding the orientation of using ODA in the period of 2021-2025, leaders of the Ministry of Finance said that Vietnam will prioritize the use of ODA and concessional loans as leverage to push and attract private invesment, not for projects that are of private interest, are able to implement with efficient technology and lower costs.
This source of financing is used as a ‘decoy capital’, a catalyst for domestic investment, especially private capital. foreign loans will gradually be reduced in projects’ total investment amount, while borrowing and re-lending will be prioritized for projects with recoverable capital.
