Japan pledges to help Vietnam develop high-quality infrastructure
According to Mr. Shimizu Akira, Chief Representative of the Japan International Cooperation Agency (JICA) Office in Vietnam, from April 2021 to the end of March 2022, Japan has committed to ODA loans in Vietnam reaching 10.8 billion yen (75 million USD) excluding investment financing for the private sector. In addition, there are technical cooperation projects worth 34 million USD; non-refundable aid of 5 million USD, with more than 100 large and small projects.
The Head of JICA emphasized that up to now, Vietnam has always maintained a stable economic growth rate, however, the driving force behind this growth rate is export expansion and direct investment. According to Mr. Shimizu Akira, a stable society, high-quality human resources and infrastructure development are indispensable factors in each country.
In the coming time, ODA will continue to play an important role in developing infrastructure - Vietnam's growth driver, I hope that Vietnam will continue to use ODA effectively and consider this a convenient way to mobilize capital, and at the same time a way to be able to apply advanced foreign technology in Vietnam - JICA Chief Representative emphasized.
Mr. Shimuzu Akira commented that in the past 4 years, Vietnam's loans from international organizations, including JICA, have decreased by 16-20% compared to before, and this is a positive sign that Vietnam's economy continues to grow and have an impact on the international arena.
However, to be able to develop sustainably, a country needs to invest in developing infrastructure. I believe that Vietnam can completely use ODA loans that allow long-term repayment, 30 to 40 years, with low and fixed interest rates, as a tool to mobilize capital in infrastructure development" - Mr. Shimizu Akira said.
In ODA loan projects for infrastructure development, Vietnam can take advantage of foreign technology, and during the long project implementation period, there is always the participation of Vietnamese companies, thanks to which, Vietnam can receive technology transfer and experience in construction or maintenance management after the project is completed, thereby enhancing the effectiveness of the project.
Informing about the Ho Chi Minh City urban railway project line 1, Mr. Shimizu said that the completion progress of the project has reached about 90%, all 51 metro cars produced in Japan have been transported to Vietnam. "We are continuing to closely coordinate with the Ho Chi Minh City People's Committee and relevant agencies with the desire to solve each problem in order to open traffic as soon as possible" - Mr. Shimizu said.
Suggestions for solutions to help Vietnam grow sustainably
Vietnam's economy is forecast to recover stably from 2022 along with the policy of "living with COVID-19" and adding budget expenditure estimates, however, according to Mr. Shimizu, Vietnam still needs to be cautious in the face of world economic fluctuations due to the conflict in Ukraine, escalating prices, and the US increasing interest rates.
Foreign direct investment (FDI) in Vietnam is boosted by the abundant labor force and the tradition of diligence of Vietnamese workers. Supply chain diversification will increase investment in Vietnam and strongly shift the supply chain. However, according to Mr. Shimizu, Vietnam will gradually lose its advantage in human resources due to population aging in the next 30 years, and the current economic model using cheap labor will face many limitations.
In addition, Vietnam's labor productivity is relatively low compared to many other countries, high-quality human resources and skilled workers are still limited to meet the high employment opportunities, so Vietnam needs to urgently develop human resources to meet the high labor demand in the coming time. JICA has been supporting Vietnam in sustainable development through cooperation in the field of human resource development to meet recruitment needs, specifically cooperation with Vietnam - Japan University (VJU), Vietnam - Japan Human Resources Development Institute (VJCC), and technical cooperation for trainees.
JICA plans to implement Technical Cooperation to enhance job connectivity for trainees. The project aims to create a better working environment for Vietnamese workers working in Japan through the elimination of illegal employment brokerage, which has been a problem in recent years.
The Head of JICA Representative expressed his impression that many Japanese enterprises are eager to expand investment and business to Vietnam. However, the localization rate of Vietnam has barely changed much compared to about 10 years ago. Recognizing that situation, JICA is making efforts to support local businesses to increase Vietnam's localization rate.
In the field of vocational labor training, JICA is planning to work with the Vietnamese Government to build an ODA loan project to support 13 vocational training schools. "One of the characteristics of JICA's cooperation is that Japanese experts will be present to support in the beginning, however, the goal that we always want to achieve in the cooperation is that in the end, Vietnamese people can impart knowledge to Vietnamese people" - Mr. Shimizu emphasized.
In 2023, Vietnam and Japan will celebrate the 50th anniversary of diplomatic relations. Towards this important milestone, JICA will continue to make efforts to contribute more to Vietnam's development through the ODA, while strengthening connectivity between the people of the two countries, contributing to consolidating and developing the 50-year friendship between the two countries, so that the Japan - Vietnam relationship can continue to develop and make a leap forward in the coming time - Chief Representative of JICA Vietnam Office Shimizu Akira.
