National Assembly Delegate: Do not borrow ODA for regular spending

This morning, October 30, the National Assembly discussed the socio-economic situation in 2014 and tasks for 2015. On the sidelines of the National Assembly, the majority of National Assembly deputies expressed their agreement with the contents of the Government's report, and at the same time reminded the Government about issues of public debt, bad debt, restructuring and use of ODA loans.

Delegate Le Thi Nga - Thai Nguyen delegation. Source: VNA

Ms. Le Thi Nga, Vice Chairwoman of the National Assembly's Judicial Committee (delegate of Thai Nguyen): It is necessary to promulgate a law on the management and use of ODA capital.

To limit public debt, the first principle is not to borrow ODA for regular spending. Over the past 20 years, we have attracted 78 billion USD, an average of more than 3 billion USD/year. The Government has made great efforts to put this capital into socio-economic development, many public projects have been built with this capital. However, in reality, many shortcomings have arisen, causing loss, waste, and corruption in many ODA projects, which have significantly affected the quality of the works, damaging Vietnam's reputation with donors.

There have been some major cases that were discovered by foreign parties. Major violations were mainly discovered by foreign parties. We also welcome the prompt handling of the recent JTC railway case by the Minister of Transport, the Ministry of Public Security, and the Supreme People's Procuracy. This is also a testament to the serious viewpoint and attitude of the Vietnamese State in handling ODA violations.

The policy on using ODA capital has been adjusted, however, the regulations are still in principle, not preventing asking and giving. It is worth noting that the legal framework on ODA has revealed two shortcomings: the National Assembly - the one who bears the highest responsibility for public debt and the people who have to pay taxes - is almost outside of ODA. I propose that the National Assembly promulgate a law on managing and using ODA capital, making all capital, projects, etc. public and transparent.

Any country that depends on ODA for a long time will fail. Currently, our ODA allocation is spread out, lacking in focus and not stimulating internal strength, which will create a mentality of waiting and relying on it.

The world's experience shows that they always use ODA selectively. Governments only borrow for infrastructure investment, poverty reduction, not for small projects, much less for mega projects, and they also plan to stop borrowing ODA in the near future.

It is recommended that the National Assembly conduct supreme supervision and promulgate laws on ODA, control its use, combat waste, and selective use, while at the same time limiting and moving towards ending ODA in the near future.

Mr. Tran Du Lich (Deputy Head of the National Assembly Delegation of Ho Chi Minh City): Need to be transparent about investment spending and regular spending

Regarding ODA loans, I agree with other delegates that ODA cannot be borrowed for regular spending, but currently Vietnam's concept of investment spending and regular spending needs to be reviewed. We build agency headquarters, spend on investment, and consume while investing in education but call it regular spending, so the principle of efficiency is not high. Investment spending, including infrastructure and education, needs to be considered as investment. There needs to be transparency about what is investment spending and what is regular spending.

Delegate Tran Du Lich - Ho Chi Minh City delegation. Photo: VNA

As for domestic debt, in my opinion, there is nothing bad about it, including businesses and the state. If debt is used effectively and profitably, especially calculating cash flow to try to solve it, then borrowing is not bad. In the conditions of our country's economy, if we only accumulate for investment without borrowing, it will not be effective.

Our problem is that we are using debt ineffectively, investing widely outside the industry, and are currently facing the problem of annual debt repayment reaching an alarming threshold. Compared to the debt repayment threshold, we are currently stuck with having to borrow to pay off debt. This is a problem that needs to be calculated.

It should be noted that how debt is used and economic strength and efficiency are issues that need attention.

Delegate Dang Thuan Phong (Ben Tre): Restructuring is still slow.

I agree with the Government's report, but I am not really assured when economic recovery and restructuring are still slow compared to development requirements; the implementation of the 3 strategic breakthroughs has not been as expected; the economy's ability to absorb capital is still weak; employment is a big pressure, natural disasters and crime are real challenges...

In my opinion, the Government needs to focus on resolving the following problems for 2015: public debt, regular expenditures, development investment expenditures, debt repayment...

Regarding bad debt and bad debt management: After more than a year of operation, the Vietnam Asset Management Company (VAMC) has purchased VND95,000 billion; banks have also set aside VND78,000 billion to handle bad debt. This is a great effort of the banking system to handle it from its own internal resources, which is commendable.

However, the bottleneck of the problem is lack of resources, lack of support from the budget, lack of necessary legal basis for buying and selling bad debt. The government should pay attention to 2 bottlenecks to handle bad debt.

In addition, the Government needs to clearly define which areas need to maintain control to increase investment, which areas do not need to maintain non-control, do not need investment, can be sold to create national resources, avoid reporting losses to gradually lose State capital, the State capital management agency is responsible for this issue, and advises the Government more appropriately.

According to Vietnam+