No. 2 Summary ODA Study-En

8/22/2019 No. 2 Summary ODA Study-En

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current situation, orientation, capital raising solution

FOR ODA fund management for Agriculture and rural developmentin Vietnam

REPORT summary

Objective of the Study: (i) Synthesizing a current situation of capitalmobilization, analyzing, evaluating a role and an effect of ODA fund onagriculture and rural development of Viet Nam in the period of 1993-2008; (ii)recommending solutions, mechanisms, and policies in order to implement theongoing projects smoothly; and (iii) recommending the attractive orientation andaction plan in order to attract, manage, and use effectively the ODA fund foragriculture and rural Sector in the renovation time.

Methodologies: The report has conducted by analyzing and synthesizing all

data and information that were collected from reports of the organizations relatedto the agriculture and rural sectors in the Central, locals, and donors. Based onspecialists comments and conclusion from the workshops in order to modify andmake better.

Scale of report: Analyzing the situation of capital attraction andmanagement of programs and projects that belong to the agriculture and ruralsector managed by the Ministry of Agriculture and Rural Development in the

period of 1993-2008. The report only mentions in the ODA financial sourcefunded by the multilateral and bilateral donors. The ODA financial sources that

funded by the foreign Non-Government donors, finalized in the other report.

Structure of report: Except for report summary and synthesis, attachedappendix. The report includes three parts: Part I: Introduction. Part II: The situationof capital attraction and implementation management of the ODA programs and

projects for agriculture and rural development in the period of 1993-2008. Part III:The orientation and recommendation of capital attraction, management, andimplementation of ODA fund for agriculture and rural sector.

Some main contents of report:

In the period of 1993-2008, the whole of country attracted 35.217 billionUSD from the ODA fund, of which agriculture and rural sector got 5.5billion USD.The Ministry of Agriculture and Rural Development is a governor of all programsand projects with approximately 4.05 billion, other Government and provincialagencies managed about 1.45 billion. In 15 past years, the ODA financial sourcewent abreast and gave a consideration contribution to an economic development ingeneral, agriculture sector in popular, and hunger eradication, poverty alleviationof Vietnam.

According to a forecast, the ODA financial source of Vietnam after 2010

will still be maintained; maybe an amount can be increased compared to that in theperiod of 2006-2010. However, aid structure and policy will have certain changes,

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of which the amount of Loan may be increased. To meet the new situation, theMinistry of Agriculture and Rural Development conducted the report on currentsituation, orientation, capital raising solution, and the ODA financial sourcemanagement for Agriculture and rural development in Viet Nam.

The report objective is to analyze, and give an initial evaluation on the role

and effect of the ODA financial source on agriculture and rural development ofVietnam in the period of 1993-2008. To recommend solutions, mechanisms, and

policies in order to attract, manage, and use the ODA financial source effectivelyfor the agriculture and rural sector in the innovation time of country, especiallyafter 2010.

The report has conducted by analyzing and synthesizing all data andinformation that were collected from reports of the organizations related to theagriculture and rural sectors in the Central, locals, and donors. Except forintroduction, the report divided into three parts as follows: (i) Introduction. (ii) The

situation of capital attraction and implementation management of the ODA fundfor agriculture and the period of 1993-2008. (iii): The orientation, capital attractionsolutions, management, and implementation of the ODA financial source foragriculture and rural sector.

The report was analyzed and showed: the situation of the ODA financialsource attraction and disbursement for socio-economy of Vietnam in the period of1993 -2008; the situation of the ODA financial source attraction and using foragriculture, rural, and hunger eradication, poverty alleviation in the period of 1993-2008. In this part, the report was analyzed very carefully: (i) Mode of the ODA

financial source attraction for agriculture and rural including the multilateral andbilateral ODA financial source. The agriculture and rural sector has mobilizedaccording to forms of project (investment project, technique support project),

program (policy frame, access to program or sector, adjusted program).Till now,the agriculture sector borrow with priority interest rate, not borrow with commononce (IBRD of World Bank, OCR of Asian Development Bank, OOF of JBIC, andPS3 of AFD); (ii) the situation of the ODA financial attraction and using foragriculture and rural sector combining with hunger eradication, poverty alleviationof Vietnam in the period of 1993-2008, has been analyzed according to each period

(before 1993-1995, 1996-2000, 2001-2005, and 2005-2008); sectors (forestry,agriculture, irrigation, rural development, aquaculture), donors (ADB, WB, AFD,JBIC, KfW, KExim,..) eight ecological areas of the whole country (northeastern,

Northwestern, Red River Delta, Central Northern Coast, Central Southern Coast,Central Highland, Southeastern, Mekong river Delta); loan and grant, capital scaleof programs and projects (below 1 million, 1-5, 5-10, 10-30, 30-50, 50-70, 70-100million and above 100 million USD); (iii) the ODA financial implementation andmanagement for agriculture and rural sector include project preparation,implementation, and management. A common evaluation is as follows: (a) in the

period 1993-2008, 41 bilateral and multilateral donors has provided OfficialDevelopment Assistance (ODA) fund for agriculture and rural development. A

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variety of ODA funds of US$ 5.5 billion has been provided, in which US$ 4.05billion is managed by Ministry of Agriculture and Rural Development; (b)Programs and projects have been implemented in almost all regions in the countryand are in accordance with the agriculture development strategy for the wholecountry and for each region; (c) Attraction rate of ODA fund for agriculture sectoris lower (15.66%) in compared with some other sectors; (d) ODA funds are notequal in all regions in the country; (e) projects which have the investment fundabove US$ 70 million make up 3% of total projects; (f) Although no loans arecanceled but slow disbursement progress and reduction in disbursement percentagemade many projects request for extension of implementation period.

The report has pointed out (i) positive results and impacts of ODA funds on

agriculture and rural development, forestry, irrigation and aquaculture. Some major

impacts may include important investment resources makes up 40-50% of

investment resources managed by MARD (excluding important irrigation works by

government bond and grant). This contributes to increase agricultural yield and

implement strategy of hunger elimination and poverty reduction, develop and

adjust strategies and policies on agriculture development, build and strength

capacity for staff at all levels, develop rural infrastructure for developing rural

areas; prevent calamity damages and diseases; protect environment and ensure

food security; develop agricultural technology, minority groups and some other

matters such as HIV, anti-corruption. In each sector, pilot programs and projects

financed by bilateral and multilateral donors are analyzed and attached in the

appendix; (ii) Shortcomings and reasons include lack of overall orientation for

attracting and utilizing ODA funds, (ii) ODA funds are not equal for all sectors and

regions in the country; (iii) Legal investment frame is not comprehensive, there are

some limitations in procurement, especially in the process of consultant

recruitment and financial management which leads to low disbursement

percentages in the first and second year. Slow disbursement caused extension in

implementation period. Some lessons learned from past and ongoing projectsinclude (i) full awareness of ODA fund which is essential for socio-economic

development of our country; (ii) strong commitment and close guidance of

authority agencies and participation of all local people in attracting, utilizing and

monitoring ODA funds; (iii) develop close co-operation and partnership; (iv)

renovate the preparation of projects according to the principles: pro-activeness,

independence, good preparation of project paper and reduction of preparation

stage; (v) compensation and site clearance; (vi) mobilization of counterpart fund;

(vii) Capacity building for project staff; (viii) projects are managed by three project

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management units in each sector Forestry, Agriculture and Irrigation; (ix) Increase

the quality of procurement, contract management and improve disbursement

process.

Based on analyzing achievements and limitations in ODA management and

utilization in the past and recognizing challenges in agriculture and ruraldevelopment in the next time, some recommendations to attract ODA funds in the

near time are given as follows:

(i) Integrated agriculture and rural development to ensure increase of income

and living standarts for rural people especially rural poors;

(ii) Strengthen the sustainable and effective management and utilization of

forestry and other natural resources; maintaning rural environment for

sustainable development;

(iii) Construction of essential infrastructure works, adapted to climate change

and helped control natural disasters;

(iv) Development rural infrastructures for agriculture production and

improving livelihood for rural people, with priority given to those

construcions that are vital to production and ensuring life for the poors

(rural transportation, water supply, school, etc)

(v) Improve productivity, quality and competitiveness of agri-products and

economic integration;

(vi) Training and technology transfer for farmers and capacity building for

management staff at all levels, particularly at district, commune and

village levels.

The report mentions some recommendations to solve potential problems andsituations, in which approaches to attract and mobilize ODA funds are consideredto be prerequisited. Some following advance actions may include (1) Keep onmobilizing and well maganing project loans; (2) access to funds of ClimateChange Investment Fund; (3) Establish and strengthen the operation of ODAGroup under MARD; (4) Decentralize to CPO and provinces based on each stageand capacity of each province; (5) Develop a professional unit specialized in

procurement in CPOs and speed up disbursement process.

The report also mentioned schedule and proposals to the Government as well as

concerned ministries and agencies, participating provinces and donors so that

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mobilization, management and utilization of ODA funds in agricultural sector will

be implemented better in the future.

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No. 2 Summary ODA Study-En

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Transcript of No. 2 Summary ODA Study-En