Progresses seen in Vietnam management of national foreign debts: workshop
Vietnam has recorded significant achievements in managing national foreign debts over the past three decades, heard a workshop on the issue held in Hanoi on January 26.
Vo Huu Hien, Vice General Director of the Ministry of Finance’s Department of Debt Management and External Finance, made the statement, adding that the effective management has transformed Vietnam from a poor and heavily indebted country into a one receiving international organisations’ recognition as having a controlled external debt level and being excluded from the group of countries with a debt burden.
According to data from the ministry, the public sector’s proportion in the structure of the national external debt decreased from 73.6% in 2010 to 63.4% in 2015 and 43.7% in 2020.
The Government’s foreign loans are mainly official development assistance and concessional loans. To date, Vietnam has signed more than US$85 billion worth of these loans.
As Vietnam became a low middle-income nation, all economic sectors, both public and private, are able to access foreign loans under market conditions.
The ministry said, in the context of limited domestic resources, foreign borrowing from all economic sectors through flexible use of capital mobilisation forms has contributed to meeting investment needs of public construction projects, encouraging domestic saving, speeding up capital turnover, and tapping potential resources of the economy to achieve socio-economic development goals and macroeconomic stability.
International organisations recommended Vietnam consider and adjust the country's foreign debt management policies and tools to better match each debt component’s risk characteristics and the country's development conditions.
A representative of the International Monetary Fund (IMF) pointed to a number of shortcomings in Vietnam's current management mechanism, including a lack of focus on risk sources and of self-insurance requirement.
Co-organised by the ministry, the IMF, and the Asian Development Bank, the workshop aimed to collect opinions for competent agencies to improve the foreign debt management policy framework serving middle and long-term demand.