ODA more effective in tandem with private capital

CA - Public-private partnership remains a challenge for Vietnam, says the chief of Japan International Cooperation Agency (JICA) in Vietnam, Tsuno Motonori.

Can you give us an overview of JICA’s assistance to Vietnam last year?

The beginning of the year was very difficult. Last year was also a difficult year for Vietnam in terms of maintaining its economic stability and handling the impact of the economic crisis.

Our ODA loan program was temporarily suspended from August 2008 to March 2009 because of the PCI scandal in Ho Chi Minh City. Through cooperation with Vietnamese government, we agreed on anticorruption measures and we were able to resume the program.

Following the resumption, we concluded loan agreements in March and November for more than 200 billion yen for the calendar year 2009. It was the year that Japanese ODA to Vietnam reached a record high.

In November 2009, we also provided Vietnam with an urgent budget support of US$500 million. This was part of the $3 billion package provided by the Japanese government for Asian governments to carry out emergency measures to deal with the global economic downturn.

This shows a very clear policy of our government and its commitment to cooperate with Vietnam and the region. We have focused on accelerating the implementation of ongoing projects, many of which are large-scale infrastructure projects.

We have had more than 50 Japanese experts working in various sectors including agriculture, health, environmental and legal services.

Among developing countries which received ODA from JICA, Vietnam received the biggest amount. How do you assess the level of efficiency of ODA use in 2009?

Generally, it has been acknowledged that Vietnam uses its ODA effectively. However, there’s still room for improvement.

As ODA is mainly used for public investment projects, the efficiency of ODA projects in general largely depend on the legal framework for public investment.

The problem for us as well as other aid donors has to do with the efficiency of implementation. There are cases that lead to delays in project implementation because of complicated approval procedures at executing government agencies, problems related to land acquisition and the management capacity of project personnel.

Some projects, especially in urban and highly-populated areas, have been facing delays though we believe that cities such as Hanoi and HCMC are making efforts to deal with the situation.

Overall, we’re closely working with other donors and government of Vietnam to improve the governance system to further enhance the efficiency of ODA used in Vietnam.

What would be JICA’s focus in Vietnam this year?

JICA’s assistance will continue to focus on the four cooperative pillars in line with the Japanese government’s policy: support economic growth and competitiveness, improve livelihoods and reduce development disparities, ensure environmental protection and good governance.

It’s expected that stronger cooperation will take place in some areas to meet the needs of different development stages.

This year we’re preparing to sign new loans for constructing a new terminal at the Noi Bai International Airport in Hanoi and the Noi Bai-Nhat Tan Bridge expressway, scheduled in March.

Air traffic at Noi Bai has exceeded the capacity of the existing Terminal 1 since 2007. The passenger volume is growing fast and such fast growth is expected to continue for as long as the Vietnamese economy keeps up this trend.

Since Noi Bai is the only international gateway for the Hanoi capital, the construction of Terminal 2 is one of the most urgent projects for Vietnam. It’s expected to accommodate about 10 million international passengers. With the Noi Bai-Nhat Tan Bridge expressway, the connection between the airport and the city center will be shortened to 20km.

For the fiscal year 2010, we will also provide loans that support Vietnam’s seaport development. In the coming months, we could also conclude loan agreements to help Vietnam deal with the effects of climate change.

We will continue to support Vietnam with urban transportation projects, especially in railway and subway construction.

Compared with the 1990s, the projects are of a different scale now, given that the new infrastructure needs for Vietnam to take the economy further forward to level up its economy is now at a higher level.

However, these new infrastructure projects cannot be realized with aid and public funds only. The government must work to promote more participation from the private sector.

Encouraging public-private partnership is in fact the current challenge for Vietnam.

What is your hope for the year?

We expect closer cooperation between JICA and Vietnam to materialize the strategic partnership between the two countries, not necessarily in terms of financial commitments but also in terms of improving the quality of the cooperation as Vietnam gradually achieves middle income status.

This year is particularly important for Vietnam and JICA as Hanoi is going to mark its 1,000th anniversary and Vietnam assumes its role as chairman of ASEAN.

For Vietnam, this is the last year of the five-year development plan. The country is preparing new development plans and we certainly want to contribute to these efforts, not merely through financial aid but just through new plans, not just in providing financial assistance but also in sharing our expertise and technology.