Preparation, Review and Approval of Oda Project Program Content

The program and project management agency is approved by the sponsor to consider funding in each period to carry out the next preparation steps.

2. Prepare, appraise and approve ODA project program content

 The preparation work is carried out as follows: First, the aid agency will request the preparation of ODA program and project documents, followed by the determination of the domestic financial mechanism for the use of ODA. After completing the above steps, the ODA receiving agency or department will plan to prepare capital for that ODA program or project.

Main contents of the ODA program and project preparation plan:

Maybe you are interested!

 Objectives and results to be achieved in the preparation process, along with detailed outlines and content requirements for program and project documents. Sequence of preparation steps, main results of each step, main activities serving each result.

 Assign implementation, organize and clearly state the subjects that need to be attracted to participate in the preparation process.

 Differences between Donor and Recipient country procedures`

 Schedule for completion of activities, results of preparation process and schedule for mobilizing corresponding inputs.

 Appraisal and approval of ODA project program content will be approved by the competent Prime Minister.

3. Negotiating, signing, ratifying or approving specific international treaties on ODA

 Negotiation: The Prime Minister appoints an agency to represent the Government in negotiating international treaties on ODA with foreign parties.

 Signing: In case the international treaty on ODA must be signed in the name of the Socialist Republic of Vietnam, the Prime Minister shall submit to the President for consideration and decision after the competent authority presiding over the negotiations submits to the Prime Minister the results of the negotiations, the content of the agreements to be signed with the foreign party, and at the same time proposes a representative of the Government to sign the international treaty on ODA with the foreign party. The document submitted to the Prime Minister must be accompanied by written opinions from the Ministry of Planning and Investment, the Ministry of Finance and the Ministry of Justice .

 Ratification or approval: The Government approves international treaties on ODA

4. Implement ODA programs and projects

The management and use of ODA capital for basic construction projects must comply with this regulation and the current management regimes of the State on investment and construction management. In case international treaties have different provisions, the signed international treaties on ODA must comply .

5. Monitoring, evaluating, accepting, settling and handing over results of ODA programs and projects

 Monitoring and evaluation of ODA programs and projects must be conducted regularly, periodically updating the implementation status of programs and projects and must:

 Clearly define the resources used, implementation progress, completion deadline, quality objectives and acceptance criteria for each project.

 Establish an internal information system, collect and store complete information, data, documents, books, vouchers of programs, projects, contractor reports, etc.

 Prepare implementation reports according to regulations, provide and share information through the monitoring and evaluation system between management levels.

 Acceptance, settlement and handover of program and project results:

 The appraisal and approval of technical designs and total estimates, construction licensing, construction quality management, acceptance, handover, warranty, and insurance of construction works under ODA investment programs and projects are carried out in accordance with State regulations on investment and construction management.

 For ODA technical assistance programs and projects, after completion of implementation, the Project Owner organizes acceptance and takes necessary measures to continue exploiting and promoting the achieved results .

 The settlement of ODA programs and projects must be carried out in accordance with the provisions of international treaties on ODA and State regulations.

II. CURRENT STATE OF VIETNAM'S FORESTRY INDUSTRY

1. Forest resources and potential

Due to unsustainable management and use and the huge demand for reclaiming forest land and forest products for socio-economic development, the area and quality of forests have been continuously declining in recent years. According to available documents, in 1943, Vietnam had 14.3 million hectares of forest, with a coverage of 43%, by 1990 it was only 9.18 million hectares, with a forest coverage of 27.2%; in the period 1980 - 1990, an average of more than 100 thousand hectares of forest were lost each year. However, since 1990, the forest area has increased continuously thanks to afforestation and natural forest restoration (except for the Central Highlands and Southeast regions, where the forest area is still on a downward trend). According to the announcement in Decision No. 1970/QD/BNN-KL-LN dated July 6, 2006, as of December 31, 2005, the national forest area was 12.61 million hectares (forest cover 37%), of which 10.28 million hectares were natural forests and 2.33 million hectares were planted forests; divided into 3 types of forests as follows:

 Special-use forests: 1.93 million hectares, accounting for 15.2%;

 Protective forests: 6.20 million hectares, accounting for 49.0%;

 Production forests: 4.48 million hectares, accounting for 35.8%.

The total timber reserve is 813.3 million m3 (natural forests account for 94%, planted forests account for 6%) and about 8.5 billion bamboo trees. The average timber reserve of natural forests is 76.5 m3/ha and planted forests is 40.6 m3/ha. Timber is mainly concentrated in 3 regions: the Central Highlands accounts for 33.8%, the North Central region 23% and the South Central region 17.4% of the total reserve. The total area of non-timber forest products planted is 379,000 ha, mainly concentrated in 3 regions: the North Central region, the Central Highlands and the Northeast.

With the above forest capital, the current average target in our country is 0.15 ha of forest/person and 9.16 m3 of wood/person, which is low compared to the corresponding world targets of 0.97 ha/person and 75 m3/person.

The total unused land area of the country is 6.76 million hectares, of which 6.16 million hectares of bare hills and mountains account for 18.59% of the country's area; the distribution decreases gradually by region as follows: the Northeast accounts for 28% of the total area of bare hills and mountains, the Northwest 21%, the North Central Coast 19%, the South Central Coast 13%, the Central Highlands 12%, the Southeast 5%.... In the total area of bare hills and mountains, up to 71% of the area is distributed at an altitude of < 700 m and 38% of the area is distributed at a slope of 16 - 350. This area of bare hills and mountains will be potential, but also a challenge for forestry production development in the coming period, because most of it is sloping, infertile land and scattered.

2. Existence and weaknesses in the Forestry sector

Although the forest area has increased, the quality and biodiversity of natural forests in many places continue to decline (in 2005, compared to the results of the 1999 forest inventory, the area of rich natural forests decreased by 10.2%, and medium forests decreased by 13.4%; while restored forests increased by 20.7% and planted forests increased by 50.8%). The progress of afforestation of the 5 million hectare new forest planting project has not yet reached the target, especially (in the period 1998 - 2005, the total area of newly planted forests reached 70% of the plan, and the planting of industrial raw material forests only reached 49% of the plan). In some localities, forests continue to be destroyed due to land use conversion, illegal exploitation, slash-and-burn cultivation, etc. (from

From 2000 to 2005, there were an average of 9,345 cases of deforestation per year and the area cleared

2,160 ha/year) and unusual flash floods, droughts, and landslides are partly caused by forest loss or degradation;

The growth of the forestry sector is low and unsustainable (according to the General Statistics Office, the growth rate of the forestry sector in 2000: 4.9%, in 2001: 1.9%, in 2002: 1.6%, in 2003: 1.1%, in 2004: 1.1%, in 2005: 1.2%), low profits, weak competitiveness, the potential of forest resources has not been comprehensively and reasonably exploited, especially non-timber forest products and environmental services. Planted forests as well as natural forests have low productivity and quality, not meeting the needs for socio-economic development, especially large wood materials for processing and export industries;

Although the forest products processing industry has developed rapidly in recent years, it has been mainly spontaneous, unstable, lacking in planning and strategic vision, low competitiveness, poor linkage and division of production, failing to build a brand in the world market, lacking investment capital for development and modernization of technology; the source of raw wood is unstable, dependent on imports (in the past 4 years, the export turnover of forest products processing has increased dramatically by 400%, but imported raw materials account for 80% of total demand);

The impact of the forestry sector on hunger eradication and poverty reduction is still limited, not creating many jobs; the income of forest workers is low and unstable (in Thanh Hoa, the average income from forestry of the well-off households is about 461 thousand VND/person/year, the group of households escaping poverty is 786 thousand VND/person/year, the group of poor households is 241 thousand VND/person/year), the majority of people in mountainous areas cannot make a living from forestry, the lives of forestry staff and workers are still very difficult.

III. CURRENT STATUS OF ODA CAPITAL ATTRACTION AND USE

1. Situation of ODA capital mobilization and use in Vietnam

Mobilizing official development assistance (ODA) capital in Vietnam in recent times has been actively implemented, following the policy of the Party and State of Vietnam "ready to be a friend and reliable partner of countries in the international community, striving for peace, independence and development". ODA mobilization has been carried out in many different forms and at all levels from the central to the grassroots as well as at Vietnam's diplomatic representative agencies abroad.

Through the annual CG Conferences, donors have committed ODA to Vietnam with the following year's level being higher than the previous year and the total expected amount is 14.7 billion USD in the period 2001 - 2005. The above committed ODA capital includes non-refundable aid accounting for about 15 - 20%, the rest is preferential loans. This committed ODA capital is used for many years, depending on the duration of specific programs and projects.

Chart 1 : Proportion of ODA investment in industries

5.8%

7.9%

13.1%

8.8%

16.3%

25.7%

22.4%

Transport

Electricity of Agriculture and Rural Development

Water supply and drainage GDĐT-KHCN

Medical-social

Other

(Source: UNDP-2004)

Chart 2: 10 industries receiving the most ODA in 2003

112

115

123

172

285

298

Natural Resource Development Management

Health Human Resource Development

Agriculture Territorial Development

Social Development

Energy Economic Management

Transportation

Source: UNDP

0 50 100 150 200 250 300 350

Million USD

To use the committed ODA capital, Vietnam has signed international treaties on ODA (projects, protocols, agreements, programs) with donors. From 2001 to the end of 2004, the total value of international treaties on ODA signed reached 8,781 million USD, of which 7,385 million USD was loans and 1,396 million USD was non-refundable aid, accounting for about 78% of the total committed ODA capital in the same period.

ODA capital has been prioritized for use in areas such as transportation; development of power sources and transmission and distribution networks; agricultural and rural development including irrigation, aquaculture, forestry combined with hunger eradication and poverty reduction; water supply and drainage and environmental protection; healthcare, education and training in science and technology, and economic growth.

Capacity and institutional strengthening... The ODA usage structure is close to the requirements set forth by the 9th Congress.

The ODA capital disbursed to the state budget (excluding disbursements for expenses in the donor country, expenses for experts...) in the period from 2001 to the end of 2004 is estimated at about 6,172 million USD, equal to 71.9% of the total value of signed international treaties on ODA and equal to 55% of the total ODA committed during this period. It is expected that disbursement in 2005 will reach about 1,700 million USD.

ODA disbursement levels vary between donors and between project types. Technical assistance projects often have high disbursement levels (mainly for experts, equipment and machinery purchases and training). Construction investment projects often have slow disbursement due to the time it takes to prepare for investment such as compensation, resettlement, bidding and bid evaluation. In general, ODA disbursement in the past has only reached about 70 - 80% of the plan.

Chart 3 : ODA commitments and disbursements in the period 1993-2003

Billion USD

2.5

1.5

0.5

Commit

Disbursement

1993 1995 1997 1999 2001 2003 Year

( Source: Ministry of Planning and Investment )

State management of ODA has been strengthened. In 2001, the Government issued a new Decree on ODA management and use, creating a tight and fairly consistent legal framework for state management of ODA. During the period 2001 -

Comment