Vietnam Can't Absorb All Of $4.4 Billion Development Assistance

November 24, 2007 8:54 a.m. EST

Hanoi, Vietnam (AHN) - Vietnam needs help to take advantage of development assistance offer, officials say.

A record high $4.4 billion in development assistance has been pledged to Vietnam since December last year. But its capacity to absorb aid remains a serious concern, the Asian Development Bank (ADB) said as it announced this week a $700,000 grant to help the country improve its ability to implement official development assistance (ODA) projects.

ODA commitments over the past five years totaled about $11.1 billion, the ADB said, however, only $7.8 billion was disbursed. That was well below the target of $9 billion.

The ADB 2007 Country Portfolio Review Mission was concerned with the deterioration of disbursement in Viet Nam. Disbursements in 2006 fell to $184.1 million from $223.7 million in 2005. The first ten months of 2007 saw $153.4 million disbursed.

"Slow project implementation has significant consequences on the achievement of Vietnam's development objectives, as well as on the cost of the investments," said Eri Honda, senior project management specialist of ADB's Vietnam Resident Mission.

"The grant will help Viet Nam strengthen its ability to absorb development assistance," she said.