Directive No. 17/2004/CT-TTg on accelerating disbursement of Official Development Assistance (ODA) funds

DIRECTIVE

On accelerating disbursement of Official Development Assistance (ODA) funds

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Thanks to the success of the reform policy and the broad, diversified, and multilateral foreign policy of the Party and State, our country has mobilized and attracted a considerable amount of ODA funds to serve economic and social development. From 1993 to now, the annual ODA commitment has increased each year, reaching a total of 25.34 billion USD. These ODA funds have been utilized for building economic and social infrastructure; addressing social issues such as poverty reduction; developing healthcare, education, science, and technology; environmental protection; administrative and legal reforms; and supporting certain production sectors. Many ODA-funded projects have been put into operation, contributing to economic growth and improving people's living standards. The state management of ODA has been strengthened and gradually systematized. A system of ODA management agencies at all levels has been established. The capacity of central and local ODA management officials has been improved.

However, the disbursement of ODA funds in recent years has only reached 70-80% of the planned targets, lower than the average disbursement rate of ODA recipient countries in the region. The slow disbursement is due to many reasons, but the subjective reasons from us are mainly responsible; these include the lack of comprehensive planning and policies in attracting and utilizing ODA; complex and opaque procedures for assessing and approving programs and projects; prolonged and problematic land acquisition, resettlement, and site clearance processes; cumbersome administrative procedures requiring multiple steps and approvals; insufficient strict guidance and supervision by some ministries, agencies, and localities during implementation; weak capacity of ODA management officials at various levels...

Based on the above situation, to accelerate ODA disbursement in 2004 and subsequent years, striving to reach the regional average disbursement rate annually and improve the efficiency of ODA management and utilization to serve economic growth, the Prime Minister instructs relevant ministries, central agencies, and provincial and municipal people's committees to implement the following tasks:

1. Relevant agencies must immediately review all legal documents related to state management of ODA and propose necessary measures to the Prime Minister for adjustment and supplementation to enhance their legal validity and consistency with other legal documents related to investment and construction management.

2. Ministries, agencies, and provincial and municipal authorities must promptly review the 2004 capital allocation plan to ensure sufficient counterpart funding for ODA programs and projects.

3. Provincial and municipal people's committees are responsible for actively resolving land allocation issues and creating favorable conditions for the implementation of ODA programs and projects within their jurisdictions; they should develop independent resettlement areas to proactively manage land clearance, ensuring that programs and projects commence and complete according to agreed schedules between us and donors.

4. Program and project management agencies must strengthen and enhance the capacity of officials and management teams of ODA project management boards, ensuring adequate staffing; they should study and adjust technical norms and standards in line with actual conditions and international practices.

5. State management agencies of ODA need to enhance coordination among themselves and with provincial and municipal people's committees in managing and coordinating ODA, including establishing appropriate mechanisms to encourage units to effectively implement ODA projects and warn underperforming units. The disbursement capacity of programs and projects by implementing agencies should be considered a criterion for assessing and approving programs and projects.

6. In accordance with the division of labor by the Government, relevant agencies need to organize inspection and supervision of ODA projects in conjunction with inspections and supervision in the investment sector; conduct post-construction evaluations of ODA-funded investment projects; select some projects to jointly evaluate with donors; strengthen cooperation with donors to accelerate ODA disbursement.

To implement the aforementioned tasks, the Prime Minister assigns specific tasks to ministries and sectors as follows:

1. The Ministry of Planning and Investment, in collaboration with the Ministry of Finance and related agencies, must thoroughly review all legal documents related to state management of ODA. In the first quarter of 2004, they should submit proposals for supplementing and amending Decree No. 17/2001/ND-CP on the Management and Utilization of ODA to the Prime Minister in line with this Directive's spirit.

2. The Ministry of Finance and the Ministry of Natural Resources and Environment need to closely cooperate in revising Decree No. 22/1998/ND-CP and the draft Decree on the Implementation of the Land Law to submit to the Government for issuance immediately after the amended Land Law takes effect.

3. The Ministry of Construction should study and supplement contents related to the approval of technical designs and total budgets of ODA-funded investment projects into guiding decrees for the implementation of the Construction Law, aiming for strictness while avoiding cumbersome procedures.

4. The Ministry of Planning and Investment should review and ensure sufficient counterpart funding for ODA programs and projects in the 2004 plan; modify the method of allocating counterpart funding targets for application in the 2005 plan to allow ministries, agencies, and provinces to flexibly allocate counterpart funding for ODA programs and projects according to agreed schedules with donors.

5. The Ministry of Finance should issue necessary documents in the third quarter of 2004 to simplify procedures for cost control, payment of completed work volumes, and ODA and counterpart fund disbursement; review and improve budget expenditure norms for project management boards.

6. The Ministry of Planning and Investment shall cooperate with ministries, agencies, localities, and donors to implement the Capacity Building Training Program for ODA Project Management Units in the third quarter of 2004.

7. The Ministry of Planning and Investment shall serve as the head of the Inter-Ministerial Working Group, with members being department-level officials representing the Ministries of Finance, Construction, Natural Resources and Environment, the State Bank of Vietnam, and the Government Office, to hold regular coordination meetings starting from the second quarter of 2004 to identify and promptly resolve any issues arising during the implementation of ODA programs and projects, compile the results of these meetings to report to the Prime Minister and inform relevant ministries, agencies, provinces, and cities to grasp information and take measures to improve at their respective units and localities.

8. In June 2004, the Ministry of Planning and Investment shall coordinate with state management agencies responsible for ODA and donors to develop an action plan to harmonize ODA procedures and processes, focusing on program and project appraisal and approval, bidding, disbursement plans, monitoring and evaluation of programs and projects, and reporting systems on the implementation status of ODA programs and projects.

The Ministry of Planning and Investment shall be responsible for urging, monitoring, and regularly reporting to the Prime Minister on the implementation of this Directive./.