ADB Support to Improve Portfolio Performance and ODA Effectiveness

The ADB has identified the main constraints that need to be solved for improvement of portfolio and aid effectiveness in Viet Nam, including:

• lack of harmonized procedures on ODA project management
• project start-up delays
• limited effectiveness of joint portfolio performance management mechanism
• project management capacity constraints, and
• delays in institutionalization of results of dialogue between Government and development partners on aid effectiveness

ADB carried out a first technical assistance (TA) project to enhance ODA absorptive capacity and efficiency from October 2007 to August 2011. A new TA project, from June 2012 to Nov 2014 will address the above-mentioned constraints and further institutionalize the outcomes of the policy dialogue between Government and the Six Development Banks Group (6BG) as agreed in the second Joint Action Plan (JAP-2). The 6BG brings together the ADB, the World Bank, JICA (Japan), Korea Eximbank (Korea), KfW (Germany) and AFD (France).

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ADB: Support to Improve Portfolio Performance and Aid Effectiveness in Vietnam, (Inception Report), June 2012

Official Development Assistance (ODA) has been an important catalyst for Viet Nam’s rapid economic development since resumed international development partners resumed ODA in 1993. However, portfolio performance as reflected in indicators such as disbursement, project start-up compliance and average loan extension has deteriorated in 2004 and improved in 2009, but slid back in 2010. Some portfolio performance indicators in Vietnam are worse than those of other Southeast Asia countries. This situation requires that ODA utilization and management in Vietnam need to be improved to contribute to better ODA effectiveness.

ADB’s portfolio performance review in 2010 and 2011 identified main constraints that need to be solved for improvement of portfolio and ODA effectiveness, which include, among others: (1) lack of harmonized procedures on ODA project management, (2) project start-up delays, (3) limited effectiveness of joint portfolio performance management mechanisms, (4) project management capacity constraints, (5) delays in institutionalization of results of dialogue between Government and development partners on aid effectiveness.

The purpose of this report is to set out a clear approach and methodology to implement the Technical Assistance, present the implementation plan, activities, timeframe and resources to implement the TA over the period Jun 1, 2012 – Nov 30, 2014.

New tool shows relationship between development, aid and governance
Dani Kaufmann and Homi Kharas have combined their expertise on governance and aid at the Brookings Institution to produce a new tool for “connecting the empirical dots” on development, aid and governance. The tool – an interactive platform and databank of information about aid quality and governance – aims to ensure that policy discussions are informed by the best available evidence.

Planning ODA Effectiveness
How do donors go about improving aid effectiveness in practice? The inception report “Socialist Republic of Viet Nam: Support to Improve Portfolio Performance and Aid Effectiveness” gives an insight into how the Asian Development Bank’s (ADB) thinks it should do it. At the end of the report there is a useful Design and Monitoring Framework (p. 17-19).