Directive 03/CT-TTg implementation of Resolution 582/NQ-UBTVQH14 on foreign loans

DIRECTIVE

On implementation of Resolution No. 582/NQ-UBTVQH14 of October 5, 2018, on a number of tasks and solutions to continue stepping up the implementation of policies and laws on management and use of foreign loans^[1]

On October 5, 2018, the National Assembly Standing Committee promulgated Resolution No. 582/NQ-UBTVQH14 on a number of tasks and solutions to continue stepping up the implementation of policies and laws on management and use of foreign loans. Based on the assessment of results of implementation of policies and laws on management and use of foreign loans, and the tasks and solutions set forth in such Resolution, the Prime Minister instructs:

1. The Ministry of Planning and Investment

a/ Based on conclusion opinions of the National Assembly and the National Assembly Standing Committee and instructions of the Government, to continue completing the draft Law on Public Investment and report it to the Prime Minister and the Government for submission to the XIV^thNational Assembly for passage at its 7^thsession;

b/ To formulate 5-year and annual public investment plans for official development assistance (ODA) and concessional loans of foreign donors, report these plans to competent authorities for approval, and organize the implementation thereof in line with the progress prescribed in the Law on Public Investment;

c/ To evaluate the disbursement and efficiency of foreign loan-funded projects in accordance with law, specifically as follows: (i) for projects which are not yet put into execution as their efficiency cannot be determined, to suspend them for review and re-evaluation; (ii) for projects already put into execution, to carry out mid-term evaluation and find out problems and shortcomings for timely remediation; and (iii) for completed projects, to carry out comprehensive evaluation of their efficiency in accordance with the Law on Public Investment;

d/ To assume the prime responsibility for, and coordinate with the Ministry of Finance and related agencies in:

- Guiding the implementation of orientations for attraction, management and use of ODA and concessional loans of foreign donors in the 2018-2020 period, with a vision for the 2021-2025 period, as approved under the Prime Minister’s Decision No. 1489/QD-TTg of November 6, 2018.

- Further improving the orientations for attraction, management and use of ODA and concessional loans during the 2021-2025 period in line with the 2021-2030 ten-year socio-economic development strategy and the 2021-2025 five-year socio-economic development plan; proposing the Framework Strategy on new development partners with a vision toward 2030 as a basis for formulating programs and projects expected to use ODA and concessional loans, and development cooperation activities in the coming time, and submitting such to the Prime Minister for consideration and decision. Time limit for completion: third quarter of 2020.

- Proposing and implementing solutions to increase the effect and efficiency of the operation of the National Steering Committee on ODA and concessional loans; formulating mechanisms for regular and effective coordination between Vietnamese agencies and donors regarding the management and use of ODA and concessional loans.

- Modernizing the management of ODA and concessional loans by establishing, implementing and operating the national information system, attaching the management of public investment to the management of public finance and public debts, and fully and timely updating information at all stages, from the formulation, proposal and approval of projects to the negotiation and signing of agreements, monitoring and evaluation of projects and implementation of medium-term and annual public investment plans for foreign loans. Time limit for completion: fourth quarter of 2019.

2. The Ministry of Finance

a/ To organize the dissemination of, and direct, and promulgate the plan for, implementation of the Law on Management of Public Debts and guiding decrees; to closely control public debt safety indicators so as to ensure safety and sustainability of the national financial system and macro-economic stability. The proposal, appraisal and approval of policies on borrowing of loans, negotiation and signing of agreements on borrowing of loans, and allocation and use of loans must ensure proper purposes and efficiency; to refrain from converting debts on-lent from ODA and foreign concessional loans into state budget allocations;

b/ To formulate and submit to the Prime Minister for promulgation a Directive on increasing the use of ODA and foreign concessional loans for development investment expenditures and refraining from borrowing loans for regular expenditures. Time limit for completion: first quarter of 2019;

c/ To fully and timely provide information on framework conditions for borrowing ODA and concessional loans of donors, capacity and conditions for on-lending ODA and concessional loans, and borrowing capacity of local administrations, etc., for use as a basis for ministries, sectors, localities, project owners and enterprises to propose projects;

d/ To formulate 5-year plans on borrowing and payment of public debts, 3-year medium-term programs on public debt management and annual plans on borrowing and payment of public debts, and report them to competent authorities for approval, and organize the implementation thereof according to the progress specified in the Law on Management of Public Debts. To formulate and submit to competent authorities for approval the on-lending limits and annual government guarantee limits, and organize the implementation thereof;

dd/ To balance foreign and domestic loans in a rational and effective manner that ensures short- and long-term national interests; to gradually restructure the proportion of foreign loans to public debts, and propose solutions to restructure domestic and foreign debts with a view to harmonizing the debt payment obligation of the Government. To use foreign loans for guaranteeing the achievement of the objectives and performance of tasks decided by the National Assembly; to ensure the public debt safety indicators decided by the National Assembly;

e/ To review and compile statistics of current framework agreements on borrowing of ODA and foreign concessional loans. To study and propose principal provisions of framework agreements on borrowing of ODA and concessional loans, and propose orientations and plans and consult donors in order to reach agreement on major principles and contents in framework agreements on borrowing of ODA and concessional loans. Time limit for completion: third quarter of 2019;

g/ To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment in, modernizing the management of foreign loans by upgrading the information technology system to facilitate the sufficient and timely provision of information on treaties and international agreements on borrowing of ODA and concessional loans already signed with donors, and loan confirmation information in the system.

3. The State Bank of Vietnam

a/ As Vietnam’s official representative in international monetary organizations, to continue playing the role of information connection and exchange to help these organizations clearly understand and comply with Vietnam’s policies and laws on management of ODA and concessional loans; and expand cooperative relations and raise the position of Vietnam in these organizations;

b/ To coordinate with the Ministry of Planning and Investment, Ministry of Finance, related agencies and donors in the course of mobilization of loans, drafting of documents, preparation for negotiation, negotiation, and signing of programs and projects using ODA and concessional loans of international monetary organizations; to harmonize processes and procedures up to international standards; to study the application of financial instruments of these organizations.

4. The Ministry of Justice

To coordinate with the Ministry of Planning and Investment, Ministry of Finance and related agencies in further studying and proposing the completion of legal regulations, ensuring consistency in the legal system regarding the mobilization, management and use of ODA and concessional loans of foreign donors.

5. Ministries, sectors and localities

a/ To consider, balance and select among all sources of domestic and foreign development investment capital on the basis of taking into account the advantages of this capital source, with close association of public investment plans and public finance plans with medium-term and annual socio-economic development plans, ensuring that such plans have uniformity, spillover effects and region connectivity so as to make full use of the effectiveness and sustainability of programs and projects;

b/ To carefully select foreign loan-funded projects; to ensure the use efficiency and debt payment capacity on the basis of improving the quality of project documents; to ensure satisfaction of conditions by the Vietnamese counterpart (regarding personnel, mechanisms and policies, counterpart fund, ground clearance, etc.); to consolidate the organization of the apparatus for management and implementation of programs and projects, and establish and put into operation specialized project management units with capable and professional project management staff;

c/ To detect and timely deal with difficulties and problems arising in the course of implementation of projects to accelerate their implementation and disbursement progress; to organize the monitoring and evaluation of projects in accordance with law;

d/ To increase inspection, audit and finalization of works and handover and commissioning of projects, ensuring the effective use of loans;

dd/ To direct agencies, units and project owners to strictly implement the reporting regime and update online information in the information system developed by the Ministry of Planning and Investment.

6. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and related agencies and organizations shall implement this Directive. The Ministry of Planning and Investment shall urge, monitor and periodically report on the implementation of this Directive to the Prime Minister and propose to the Prime Minister solutions for handling arising problems.-

Prime Minister
NGUYEN XUAN PHUC