World Bank Provides $3.7B ODA for Vietnam in 4 Years: Lead Economist

The World Bank (WB), Vietnam’s biggest multilateral donor, had provided $3.7 billion in official development assistance (ODA) over past four years, said Sandeep Mahajan, Chief Economist of the WB office in Vietnam. Vietnam will be soon no longer to access WB’s soft loans as the country has leapfrogged to middle-income status, Mr. Mahajan noted, adding that the soft loans cut will be a big challenge for Vietnam. WB has announced it would stop offering preferential ODA to Vietnam from July 2017 while the Asian Development Bank (ADB) plans to stop providing soft loans from the bank’s Asian Development Fund (ADF) from Jan 1, 2019 or later. Earlier, many donors, including the U.K., Belgium, Denmark and Switzerland planned to stop providing or cut ODA for Vietnam. This may cause a shock for Vietnam’s economy but may help it improve its financial discipline to focus on long-term stable development, experts said. The development aid is one of the key sources of dollars for Vietnam after exports, foreign direct investment (FDI) and remittances. Experts, however, advise Vietnam to reduce the use of ODA to avoid a debt burden in the future. (tienphong.vn Apr 12)