Vietnam sitting on $22 billion from overseas loans

By    October 31, 2016 | 11:24 am GMT+7
Vietnam sitting on $22 billion from overseas loans
Labourers arrange steel structures at a construction site of an office building in Hanoi, November 24, 2014. Photo by Reuters/Kham

Ministries are failing to spend the money that's been handed to them.

Vietnam is sitting on a huge $22 billion cash pile that could have helped boost economic growth and develop infrastructure.

But due to low disbursement of official development assistance loans the funding is lying idle, the Saigon Times has reported, citing a report by the Ministry of Planning and Investment.

In a recent review on the use of official development assistance (ODA) and other forms of preferential loans, the ministry said Vietnam managed to secure $27.9 billion between 2011 and 2015, of which ODA and low-interest loans accounted for for 95 percent ($26.5 billion). The remaining 5 percent ($1.6 billion) was offered as grants rather than loans.

According to the report submitted to the National Assembly, Vietnam's legislature, ODA disbursement from 2011-2015 quickened noticeably with a 60 percent jump from the average rate from 2006-2010.

Data showed the Vietnamese government disbursed a total of $22.3 billion over the past five years.

ODA is a loan or grant offered by international donors to promote sustainable social and economic development.

However, the report shed light on the fact that Vietnam is still sitting on an idle cash pile of nearly $22 billion due to the failure of ministries and local governments to meet their disbursement goals.

The investment ministry said that the main culprits were the Ministry of Natural Resources and Environment, Ministry of Health, Ministry of Education and Training and Ministry of Labor, Invalids and Social Affairs.

The percentage of actual disbursement of ODA against the target set by the environment ministry in the first nine months of the year was only 18.6 percent, data showed.

Low disbursement from January-September has resulted in a $2.42 billion disbursement shortfall, said the investment ministry.

Total ODA for 2016 has amounted to $5.1 billion, but Vietnam has so far disbursed only $2.68 billion, equivalent to 52.54 percent of the annual target.

In terms of ODA distribution, transport infrastructure development accounted for the largest chunk of the loans portfolio with 35.68 percent or $9.9 billion from 2011-2015.

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