The efficient management of national foreign debt takes Vietnam from a poor country with high amount of debt to one lauded by international organizations with external debt sustainability.
| Deputy Director General of the Department of Public Debt Management and External Finance Vo Huu Hien. Source: MoF |
Deputy Director General of the Department of Public Debt Management and External Finance under the Ministry of Finance (MoF) Vo Huu Hien gave the remarks at a workshop discussing national foreign debt management on January 26.
The MoF representative said over the past three decades, Vietnam has attained significant result in debt management, especially of national foreign debt.
The ratio of foreign debt in the public sector to total national foreign debt has been on the declining trend from 73.6% in 2010 to 63.4% in 2015 and 43.7% in 2020, lower than the rate set by the National Assembly of 50% and ensure national financial security.
Total outstanding loans of the public sector has also been tightened with an average growth rate of 13% in 2011-15 to nearly 3% in 2016-20.
“This help Vietnam to move out of the group of highly indebted countries,” stated Mr. Hien.
At present, official development assistance (ODA) and preferential loans make up 98% of the government’s foreign debts, he noted, adding Vietnam has signed financing agreements with international partners worth US$85 billion for an average maturity period of 13.8 years and an average interest rate of 1.35%.
Mr. Hien said while the country’s financial capabilities remain limited, foreign debts from different economic sectors are essential for Vietnam to fund infrastructure development and support socio-economic development goals.
As Vietnam has reached the low-middle income country status, government agencies need to finalize legislation and laws to better manage debt in mid- and long-term in a new circumstance, stated Mr. Hien.
On this issue, Mr. Nguyen Minh Cuong, the principal country economist of the Asian Development Bank (ADB) in Vietnam, said the bank gives priority to supporting the country in finalizing legal framework in foreign debt management.
“The ADB is willing to assist government agencies in reforming the process of foreign debt management,” he added.
