This view was shared at a financial sector conference in Hanoi on December 3, where the Finance Ministry reported that the country’s foreign debt rate had dropped to 33 percent of the GDP by the end of 2007, down from 90 percent in 1993.
 
The cautious management of foreign debts has also helped remove the country from a global list of large-scale debtors, and allowed the 80-million strong country to better mobilise ODA capital and gain access to foreign loans, financial experts said.
 
According to the Finance Ministry, ODA commitment to Vietnam reached 29 billion USD during the 2000-2007 period, including 5.43 billion USD pledged in 2007 alone.
 
In addition to commitments by big financial institutions, such as the World Bank and the Asia Development Bank, and traditional donors including Japan , France and Germany , further commitments are expected from the RoK, China , and several East European countries.
 
A number of European banks have also provided the Vietnamese Government with soft loans for its investment projects and production expansion.
 
These foreign loans have given an impetus to Vietnam in further improving its socio-economic infrastructure, particularly in the areas of transportation, energy, agriculture and rural development, forestry and irrigation, in order to attract higher levels of foreign and domestic capital and to achieve economic growth.
 
Currently, ODA loans account for 11 percent of the country’s total investment capital and 29 percent of the State budget’s development investment.
 
Since 2004, Vietnam has adopted a long-term foreign debt strategy to manage foreign debts carefully in order to ensure sustainable economic growth.
 
However, the Finance Ministry is urgently formulating a mid-term foreign debt management programme in the wake of the current global financial crisis.
 
In its November session this year, the National Assembly debated a law on the management of public debts, which is scheduled to be passed in May 2009 to provide a standardised legal tool for the effective management of foreign debts.
 
The Finance Ministry has identified eight crucial tasks that must be achieved to successfully reform its foreign debt management procedures, including improving its market forecast capacity, analysing capital sources, and diversifying capital attraction channels.