Donors pledge $5 bln soft loans, grants to Vietnam

Vo Hong Phuc, Minister of Planning and Investment in Vietnam and Consultative Group co-chairman, left, listens as James W. Adams, vice president of the World Bank and Consultative Group co-chairman, right, speaks during closing session in Consultative Group Meeting in Hanoi, Vietnam, Friday, Dec. 5, 2008. (AP Photo/Chitose Suzuki)

Vo Hong Phuc, Minister of Planning and Investment in Vietnam and Consultative Group co-chairman, left, listens as James W. Adams, vice president of the World Bank and Consultative Group co-chairman, right, speaks during closing session in Consultative Group Meeting in Hanoi, Vietnam, Friday, Dec. 5, 2008. (AP Photo/Chitose Suzuki)

HANOI, Vietnam (AP) — International aid donors pledged $5 billion in low-interest loans and grants to Vietnam on Friday, with the total falling slightly from last year because Japan has frozen aid until the communist country takes effective measures to tackle corruption.

Last year, donors pledged $5.4 billion in official development assistance to booming Vietnam, which has recorded economic growth of at least 7 percent annually over the past decade.

On Thursday, Japan, which has provided more development aid than any other country to Vietnam, said it would make no new loans to Vietnam next year.

The announcement came after four Japanese executives pleaded guilty last month to paying $820,000 in bribes to a Vietnamese official overseeing a highway project in Ho Chi Minh City, the country’s southern commercial and financial hub.

Tokyo has said it would only resume providing aid to Vietnam when effective anti-corruption measures are in place.

Other donors also raised concern about corruption, as well as the recent arrests of two Vietnamese journalists.

“The events of the last six months have raised concerns with respect to whether the media is being encouraged to actively report on corruption within the government,” said James Adams, vice president of the World Bank.

Minister of Planning and Investment Vo Hong Phuc replied that the journalists “were arrested for breaching laws, not because they were fighting corruption.”

Phuc praised international donors for their support in the face of a deepening global economic downturn.

“In spite of difficult times and the financial crisis, most countries have increased their aid commitment to Vietnam,” Phuc said. “This reflects the donors’ support for the policies of the Vietnamese government.”

The World Bank became the largest aid donor, with a pledge of $1.66 billion, and the Asian Development Bank pledged $1.57 billion. The European Union will give $893 million.

Over the past three years, donors have pledged a total of $13.6 billion in development aid to Vietnam, of which over $6 billion has been spent, mostly on infrastructure projects, according to the government.

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Vietnam aid loans suspended

HANOI – JAPAN’S ambassador to Vietnam on Thursday said his country had suspended new aid loans to Hanoi, citing a major corruption scandal that came to light last month.

The move came after former executives of Pacific Consultants International (PCI) last month admitted in a Japanese court to paying kickbacks to a Vietnamese official overseeing a Tokyo-funded road project.

Ambassador Mitsuo Sakaba told an international donors’ meeting in Hanoi that ‘we are unable to pledge new yen loans’ until both countries work out ‘effective and meaningful measures against corruption.’ Japan is Vietnam’s biggest bilateral donor.

‘Following the grave incident, the two governments set up a joint committee to discuss concrete measures to be taken to prevent corruption relating to Japan’s ODA (official development assistance) to Vietnam,’ he said.

‘Until effective and meaningful measures against corruption be worked out through this joint committee, it would be difficult to regain the support from the Japanese public for further assistance to Vietnam, and we are unable to pledge new yen loans.’

Japan last year gave more than a billion dollars in ODA to Vietnam and has been studying several major infrastructure projects, including a new north-south transnational railway and highway and a high-tech industrial park. — AFP

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UK pledges to donate 50 million pounds to Vietnam

VietNamNet Bridge – The British government has pledged to give non-refundable aid of 50 million British pounds (roughly 74.5 million USD) to Vietnam next year in spite of global financial crisis.

Head of the UK’s Department for International Development in Vietnam Fiona Louise Lappin said on December 2 that the sum is part of a ten-year development partnership between Vietnam and the UK.

The UK is one of countries soon announce their aid pledge to Vietnam ahead of the Annual Consultative Group Meeting 2008 scheduled for December 4 and 5.

The poor will still be one of top priorities in the UK-funded projects, Lappin said, adding that “It is key at this point in time that Vietnam takes steps to protect the poor”.

Over the past three decades, over 35 million people have escaped from poverty, however, there still have 18 million very poor people and low income families who need to be protected.

While praising Vietnam’s poverty reduction, Lappin warned that Vietnam is not likely to reach its two Millennium Development Goals of sanitary and HIV/AIDS in 2015, especially when foreign aid to the areas will be reduced as Vietnam becomes a medium-income country.

She called on the Vietnamese government to prepare its budget for the areas. The Head of DFID Vietnam also urged the Vietnamese government to increase its anti-corruption efforts, saying “Different ways of being corruption require different strategies to tackle.”

She also expressed her support to Vietnam’s anti-corruption policy and called for supervision mechanism on how effectively the policy works.

(Source: VNA)


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