capabilities such as services with high intellectual content, high gray matter, high added value such as finance, banking, technical design consulting...), projects using high technology and highly skilled workers; real estate development projects, urban beautification... To do this, ministries, branches, and localities must coordinate with each other to build development strategies and plans for each industry and each locality, on that basis, build a strategy to attract FDI. In the immediate future, it is necessary to review and adjust industry and local planning in the direction of eliminating monopoly and protecting domestic production, creating conditions for the FDI sector to participate more in the development of industries and fields, especially high-tech fields.
Second , it is necessary to actively improve the domestic investment environment. In the immediate future, it is necessary to focus on solving the following issues:
- Continue to improve the legal system and policies on FDI attraction, forming a common legal basis for domestic and foreign investment, ensuring transparency, ease of understanding and conformity with the requirements of economic integration. First of all, it is necessary to review all legal documents on investment to ensure consistency and no overlap in investment incentives; loosen the proportion of foreign workers in foreign-invested enterprises operating in the fields of high technology, education and training, medical examination and treatment facilities.
- Implement well the current law on "Anti-corruption". In our country, corruption can be said to be a "national disaster", which is one of the reasons for delays in investment-related work. Corrupt habits and mentality will make workers not work actively, cheat on time... That causes instability for investors' investment capital.
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- It is necessary to coordinate between ministries, departments and branches in implementing the "Investment Law" and the new Enterprise Law effectively. In addition, the state needs to improve the Patent Law and the Intellectual Property Law because only then can Vietnam attract investment in areas that require a lot of intelligence such as software technology. This is considered a strategic response to the increasing challenges in the internationalization process and the increasingly important role of intellectual property in a knowledge-based development environment.
Third , build preferential policies and incentives on taxes, land, foreign exchange, loans... that are attractive to attract Japanese FDI capital into technology projects.
high technology, services, tourism and support policies for Japanese enterprises to transfer investment from countries in the region to Vietnam
Fourth , research on Japan's policies, strategies, and overseas investment trends as well as research on FDI attraction experiences of countries in the region to serve as a basis for formulating policies to attract Japanese FDI to Vietnam. It is necessary to quickly establish an investment promotion office in Japan.
Fifth , encourage the equitization of FDI enterprises to mobilize capital from all classes of people and on that basis help Vietnam penetrate into the management and regulation of foreign-invested enterprises in general and Japanese enterprises in particular. This also contributes to gradually improving the economic thinking as well as the management level of Vietnamese investors. Attach importance to joint ventures between FDI enterprises and domestic enterprises and need to have more specific regulations for cases where foreigners buy stocks and bonds of domestic enterprises. It is necessary to diversify the attraction of investment capital such as widely applying the model of companies organized according to the group model, implementing the purchase and sale, merger of enterprises. That will contribute to increasing the attractiveness to foreign investors.
3. Solutions to promote Japan's official development assistance to Vietnam
3.1. Perfecting the legal environment
To improve the ability to reasonably attract and effectively use ODA capital in general and Japanese ODA in particular, in addition to having a clear strategy for attracting and using capital according to economic development goals in each period, it is necessary to have a complete system of policies and laws to create a favorable investment environment for activities to attract and use these resources.
On August 21, the Ministry of Construction issued Decision No. 24/2006/QD-BXD on promulgating the Regulation on management and use of official development assistance (ODA) capital, applicable to all units under the Ministry of Construction in mobilizing, receiving and using this capital. Accordingly, all activities of mobilizing, receiving, managing and using ODA capital must go hand in hand with improving the efficiency of use and debt repayment capacity, in accordance with the receiving capacity of the implementing units. ODA projects must have clearly defined responsibilities, ensuring close coordination between units and promoting
the initiative of the program and project implementing unit. The Ministry of Construction unifies the management of programs and projects implemented by units under the Ministry. However, the application of this decision in practice is the issue that needs attention. After being criticized for the case of PMU18 cutting the core of the project, replacing iron piles with bamboo piles to make the Noi Bai - Bac Ninh route that was just built and showed signs of cracking, many Japanese people expressed doubts about the effectiveness of ODA projects in Vietnam. This decision was issued at the right time to rectify the unsystematic management and use of ODA in Vietnam. Accordingly, the decision clearly states the programs and projects that are prioritized to receive non-refundable ODA capital, which are: programs to build strategies, orientations for the construction industry, improve institutional capacity; urban planning and development; support for research and transfer of new technologies. ODA preferential loans are given priority to programs in the fields of wastewater treatment, solid waste treatment; environmental sanitation; water supply, drainage, urban upgrading and development, housing for low-income people, large-scale projects with slow capital recovery and advanced new technology transfer projects. The provisions in this decision contribute to specifying the order and procedures for implementing ODA programs and projects to help project owners grasp from the beginning the requirements for project preparation, funding methods and conditions, procedures and order of implementation of stages in investment programs and projects, disbursement process and financial mechanism.
In addition, the State needs to develop a mechanism to create a reserve fund in the State budget specifically for ODA projects in order to promptly meet counterpart funds for project preparation, reducing passivity in counterpart fund management. At the same time, there should be regulations on reasonable levels of counterpart capital expenditure for ODA projects to ensure consistency and conformity with project quality requirements. This is especially important for projects requiring high technical level.
In addition, the state also needs to study and promulgate regulations on direct capital recovery and partial repayment of foreign loans from toll revenue from a number of public works such as transportation, water supply and drainage, healthcare, etc. to enhance responsibility for capital management and use and reduce part of the foreign debt burden on the state budget.
3.2. Improving the quality of planning and using ODA capital
The innovation and improvement of planning for mobilization and use of ODA capital is aimed at overcoming the duplication and overlap of programs and projects that cause confusion.
waste resources and limit the efficiency of capital use. At the same time, planning helps donors have stable information on capital needs, priority policies as well as a list of specific programs and projects calling for funding from ODA capital annually and over periods. Main contents of planning work:
- Planning needs to direct mobilization according to each country and each sponsoring organization based on forecasting the mobilization level, structure and sponsorship conditions to determine the ability to mobilize ODA for implementation each year and period, thereby ensuring balance with other resources as well as with the absorption capacity of the economy. In the process of capital mobilization, it is necessary to start from national interests and investment efficiency for programs, projects as well as for fields. Develop basic criteria for capital use planning so that when implemented, it meets investment requirements and orientations. In cases where funding sources do not achieve high incentives, have many unfavorable constraints and do not meet the country's socio-economic development goals, they should not be accepted.
- Planning the use of ODA capital in the direction of promoting growth, poverty reduction and aiming at other social goals. Income growth, poverty reduction allow people to improve their lives, health and education. However, the growth process also comes with negative aspects such as increasing the gap between rich and poor, environmental pollution... Therefore, the challenge for a country at a relatively low level of development like ours is the choice between rapid growth accompanied by pressing social problems and a plan that focuses on solving social problems and ensuring fairness but with slower growth. Therefore, planning must be based on the development orientation of sectors and regions in each period.
- Organize and monitor the planning effectively, ensuring that the implementation process complies with the priority targets and the medium-term capital mobilization and use plan. The selection of capital-using programs and projects must not only be economically and financially effective but must also consider the impact on debt obligations to the state budget and the country's debt repayment portfolio.
3.3. Strengthening the effectiveness of management, operation and implementation of programs and projects
In order to meet the requirements of economic management in the new situation, promptly overcome the unreasonable organization and management of the agencies participating in the program of mobilizing and using ODA capital, especially in the stages of selecting, appraising, approving projects, organizing bidding and approving contracts for design, construction and equipment procurement... it is necessary to implement the following steps:
- Improve the quality and effectiveness of state management of ODA. Unify financial management of ODA capital sources of the Government into a single point of contact to monitor, manage and summarize the situation of capital use efficiency in accordance with the provisions of the State Budget Law. The State supervises and manages on a macro level the activities of investors. Enhance the autonomy and responsibility of investors, from which investors must carry out a complete and strict project appraisal process including appraisal of technical documents, finance, management capacity, and professional qualifications of contractors. The capital mobilization process for projects and programs must be based on the following bases:
+ All units registering to use capital must perform well the stages of the project process: selection, project profile preparation, appraisal, approval, implementation organization... at the same time must fully calculate the aspects related to the quality and efficiency of project capital use, especially debt repayment capacity, project sustainability during the development process and be responsible before the law for the results of their capital use.
+ Carry out appraisal work well to select projects that are truly economically and socially effective, while enhancing the responsibility of appraisal agencies and project implementation agencies, avoiding the situation where when the project is ineffective, they ask for an extension to repay the debt or transfer the debt repayment responsibility to the state budget. On that basis, simplify approval procedures and speed up project implementation progress.
+ The Feasibility Study Report is the basis for negotiating and signing the Preferential Loan Agreement for the project. Therefore, only sign the Project Agreement when the Feasibility Study Report has been approved, this will ensure that the project implementation complies with investment decisions and avoid the situation where the project has to pay false commitment fees.
+ The site clearance and resettlement plan must be included in the project implementation plan and considered a condition during the appraisal process. This is a particularly meaningful solution for projects related to infrastructure construction.
+ Implement well the state financial management of ODA capital, prevent the situation of scattered use, clearly identify from the beginning the projects that must borrow interest and repay the Government and the projects that are funded by the state budget to serve as the basis for project construction, remove obstacles to speed up the disbursement and timely payment of capital to project owners. The financial mechanism must be considered and specifically decided when approving the feasibility study report and clearly stated in the project investment decision.
- Continue to simplify administrative procedures, publicize processes, time, and responsibilities for handling procedures related to the implementation of programs and projects using ODA resources.
- Strengthen project monitoring and evaluation. In fact, this is the weakest link and there are no specific regulations in current legal documents. Therefore, in the coming time, it is necessary to strengthen the capacity for project monitoring and evaluation.
3.4. Strengthening the capacity of project management and implementation staff
Strengthening the capacity and qualifications of officials participating in macro-policy planning on state management of programs and projects using ODA capital. This contributes significantly to ensuring the stability and effectiveness of policies and decisions issued.
The management level of project owners and project directors in many places is still weak, many projects are implemented locally but local staff do not meet practical requirements. Therefore, in addition to training to improve the capacity and qualifications of staff, it is also necessary to institutionalize the requirements on capacity and qualifications of personnel in Project Management Boards to be able to select suitable staff for each position.
Project management boards need to pay more attention to on-site training, training staff to be proficient in professional skills, law, foreign language skills, and management skills. Staff exchange between project management boards in the same field is also a good model for learning and improving skills.
CONCLUDE
Vietnam-Japan relations in general and economic relations in particular are in a period with many favorable factors. The increasing globalization and regionalization process is considered an important driving force to promote economic relations between countries, including Vietnam-Japan relations. The above process increases trade and investment opportunities for each economy, thereby promoting economic restructuring. Notably, the reform process to shift to a knowledge-based economy in Japan as well as the process of promoting industrialization and modernization in Vietnam allows the two countries to complement each other in ensuring the needs of production and people's lives. This is also an objective basis for increasing bilateral economic and trade relations between Vietnam and Japan.
Vietnam-Japan economic-trade relations in recent years have had positive changes after the impacts of the global economic recession of the world in general and of Japan in particular. Since 2004, when the Japanese economy showed signs of recovery with a GDP growth rate of 2.7%, the economic picture between the two countries has shown new signs of optimism. In the field of trade, for the first time the trade turnover between the two countries reached 8.5 billion USD in 2005, in which Vietnam's main export items were seafood, textiles, crude oil and recently software processing products. In the field of investment, over the past 3 years, Vietnam has always maintained its position as a potential investment market for Japan, ranking 4th after China, India and Thailand. More and more Japanese investors are choosing Vietnam as the destination for their production facilities. According to economists, in the coming years, investment by Japanese companies in Vietnam will increase due to the instability of the rising yuan as well as anti-Japanese protests from the Chinese market. In the field of ODA, Japan's ODA to Vietnam continues to increase steadily. Currently, Japan ranks first in the list of countries and international organizations providing ODA to Vietnam. Since Japan resumed aid to Vietnam, from 1992 to 2005, the total ODA turnover has reached
up to 11 billion USD, most of which is in the form of loan cooperation with low interest rates and long repayment periods. Japan's ODA capital actively contributes to the development of infrastructure in accordance with Vietnam's development requirements.
In order for the Vietnam-Japan economic-trade relationship to develop more strongly in the coming years, it requires continuous efforts from the State and enterprises of both countries. On the one hand, the Vietnamese State needs to continue adjusting its economic structure and building a foreign economic strategy suitable to new conditions, especially in economic relations with Japan. On the other hand, it is necessary to continue to seek forms of cooperation suitable to the needs, capabilities and interests of both sides.
Within the limited scope and time of research, the thesis " Vietnam-Japan economic-trade relations in the new international context: current situation and solutions " certainly cannot avoid certain limitations. Therefore, I look forward to receiving valuable comments from teachers and students of Foreign Trade University to continue to complete the topic.
Thank you very much!