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Nation urged to rethink dependence on ODA funds
Viet Nam's reliance on official development assistance to sustain its investment-based growth is increasingly challenged by the decline of ODA at a global level, a problem amplified by the global slow-down, said United Nations Independent Expert on Foreign Debt and Human Rights Cephas Lumina on Mar. 29.
Lumina said while the country had recorded impressive success in socio-economic development and become a lower middle-income nation, social problems, especially among the most vulnerable groups were still an issue.
Lower middle-income status, however, would result in less ODA as donor countries would turn to more needy countries, said Lumina at the conclusion of his 9-day research trip to Viet Nam yesterday.
In the last decade, Viet Nam's income per capita has risen from US$390 in 2000 to $1,200 in 2010. More than seven million jobs have been created. ODA has played an important role in advancing human development in Viet Nam. Last year, it supplemented nearly 11 per cent of total social investment and 17 per cent of the State budget.
Lumina praised the Government for placing Vietnamese citizens at the centre of national development, and suggested that to fully ensure that principle, it was important that "national economic and social policies and programmes were firmly anchored in a human rights-based framework that underscored participation, transparency and accountability".
He said the Vietnamese Government had made great efforts to have information on trade deficit and foreign debt available for citizens but the more important questions were ease of accessibility and quality of it. "To enhance transparency and accountability in the management and use of public resources, the Government should ensure the broad availability of accurate and timely information on debt and ODA," he said. "The Government can do a better job to make the information more accessible to people. It could make the information more simple and easy to understand as some technical figures can be difficult to understand."
According to the independent expert, Viet Nam's foreign debt in 2010 was about 42 per cent of the GDP, an increase of 4 per cent compared to the previous year. This figure remained within the safety line but it exhibited a tendency to continue increasing and would increase in 2011, he said.
Lumina however also said that Viet Nam had done well in maintaining education, social welfare and medical treatment for its population, but an increase in foreign debt would result in an increasing burden for the Government to pay the debt and interest and lead to a cut in social spending.
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