New model Needed to Maximise Aid Effectiveness

Focused efforts to strengthen the way aid is used were necessary as Viet Nam becomes a middle-income country.

These efforts should be clearly reflected through the revision of the Official Development Assistance (ODA) Strategy Framework and the replacement of Decree 131/2006/ND-CP on ODA management and utilisation, participants at the third Aid Effective Forum held in Ha Noi yesterday were told.

Max von Bonsdorff, head of development co-operation at the Embassy of Finland, said that to maximise the effectiveness of aid during a time of transition, one important issue that should be addressed was how donors would complement each other and divide labour between themselves.

Victoria KwaKwa, director of World Bank Viet Nam, said: “It is extremely difficult to make progress if two [Government and development partners] don’t come together. We need some fundamental changes to achieve it.”

Cao Manh Cuong, deputy director of the Foreign Economic Relations Department under the Ministry of Planning and Investment, said one of the main constraints was the lack of a strong national aid architecture that could link aid effectiveness and development effectiveness.

He said another challenge that still remained was institutional challenges including complex legal processes, deficits in planning and budgeting and complexities of decentralisation were currently complicating development partners’ harmonisation in the implementation of aid.

Thomas Beloe, a Governance and Aid Effectiveness Advisor from the United Nations Development Programme Asia Pacific said that as Viet Nam became a middle-income country, it would have to deal with distinctive challenges such as more selective needs for aid and relatively strong bargaining power and less appetite for division of labour exercises.

He said Viet Nam should take the opportunity at the fourth High Level Forum on Aid Effectiveness which will take place in Busan, South Korean, in November to share lessons during the process of adapting the aid effective agenda to its own conditions.

One of the key objectives of the forum would be to consider the quality of aid in the broader context of development effectiveness and Viet Nam, in particular in the context of a new middle-income country, was well positioned to have a strong influence in the global debate.

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