Prime Minister Nguyen Xuan Phuc ordered ministries and State agencies to cut above-the-line expenditures and only spend the new ODA funds on development investment during a meeting on March 8.
Prime Minister Nguyen Xuan Phuc speaks at the meeting
Chaired by the PM, the meeting was also attended by Deputy PM and Foreign Minister Pham Binh Minh and Deputy PM Vuong Dinh Hue. It gathered several relevant ministries and State agencies to discuss the management of Vietnam’s ODA and foreign soft loans.
Attendees to the event agreed that ODA and foreign soft loans should be only used for development investment and not spent on above-the-line costs like purchases of cars.
This principle needs to be applied throughout the development of a project, from the phase of proposal delivery, negotiations, to the signing and implementation of contract. However, there is a lack of legal definitions to clarify the differences between development investment costs and above-the-line expenditures in ODA projects.
In addition, spending on development investments often refers to “hard costs”, or those for infrastructure development while “soft” costs for capacity building, technical support projects, particularly in the fields of healthcare and education are not included.
Phuc asked the ministries and relevant agencies to tighten control on the management of ODA and use the loans more efficiently.
He assigned the Ministry of Finance to make clear of the two expenditures and soon proposed to him for approval.