Efficiency of the use of Official Development Assistance (ODA) in the transport sector in Vietnam

de the positive impacts, ODA also has negative effects on aid recipient countries such as making the economy of ODA- receipt countries become dependent. - For donor countries: Through ODA, aid countries will increase their influence and establish their position in diplomatic, trade, and economic relations with ODA-receipt countries in the international area. By binding on contractors appointment or suppliers of products and services selection, technology transfer in loan agreements, some donor countries have turned ODA protection tool for donor countries’ businesses. ODA can also increase political uncertainty in the donor country if ODA management is ineffective. 1.2 Efficient use of official development assistance in road traffic infrastructure construction 1.2.1 Road traffic infrastructure 1.2.1.1 Road traffic infrastructure concept Road traffic infrastructure is an important material foundation of a country including all technical and physical conditions such as bridges, roads, works, auxiliary 8 equipment, rest stations road and management policy institutions and operational environment associated with road traffic to meet the requirements of socio-economic development among regions, regions or countries. 1.2.1.2 Classification of road traffic infrastructure - According to manifestation morphology: material morphology and non-material morphology. - According to the characteristics of using road traffic infrastructure: road works, bus stations, parking lots, roadside stations and other auxiliary works on roads in service of traffic and security corridors. - According to decentralized management: road traffic infrastructure is managed by the Central and road traffic infrastructure is managed by the locality. 1.2.1.3 Road traffic infrastructure characteristics - In the construction of road traffic infrastructure, the products made are single, designed from before production and as the request of buyers. - Bring unity, complementary parts - Road traffic infrastructure is affected by natural conditions, so in the annual allocation of investment capital, it is necessary to ensure a balance between the implementation of new projects with upgrading and expanding maintenance activities. - Road traffic infrastructure construction is essentially a type of development investment, long-term investment, slow payback time, so it is necessary to mobilize a large investment capital, construction supervision and extremely tight management of investment capital to avoid loss. - The investment efficiency of road traffic infrastructure construction for the economy is indirect and long-term. 1.2.2 The concept of efficient use of official development assistance in road transport infrastructure construction Effective use of ODA in road transport infrastructure construction is the ODA use can achieve the project's initial set goals in terms of work quality, cost and implementation progress. At macro level,the efficiency of using ODA in road transport infrastructure construction is shown through it actually contributes to economic growth of the receipt countries. At a micro level, it is assessed through the suitability of the policy and implementation process; effectiveness through achieved objectives of program / project; performance through the comparison and selection of inputs and expected output, appropriate project implementation process; impact through positive or negative transformations caused by project implementation and sustainability by considering how the benefits of project implementation will be sustained or expanded upon project implementation sentence ends. 9 1.2.3 Criteria to evaluate the effectiveness use of official development assistance in road transport infrastructure construction 1.2.3.1 Criteria for evaluating the effectiveness use of official development assistance in road transport infrastructure construction at macro-level In this study, the author focuses on selecting the variable representing economic growth (GDP), and quantifying the effect of ODA in road traffic infrastructure construction on Vietnam's GDP, when ODA in road traffic infrastructure construction has a positive impact on economic growth, it can be concluded that the use of ODA in road traffic infrastructure construction has achieved certain results and vice versa when ODA in road transport infrastructure construction has a negative impact on economic growth. 1.2.3.2 Criteria for evaluating the effectiveness use of official development assistance in road traffic infrastructure construction at micro-level Criteria to evaluate the efficiency of using ODA in road traffic infrastructure construction include: Relevance, Effectiveness, Effciency, Sustainability. 1.2.4 Factors affecting the efficient use of official development assistance in road traffic infrastructure construction Stability of political and socio-economic institutions, consistency level of governance policies related to ODA, Financial capacity of the project, Capacity of management and administration staff, Capacity construction contractor team 1.3 Experiences of some countries in improving the efficient use of official development assistance in road transport infrastructure construction and learned lessons for Vietnam 1.3.1 Experiences of some countries in improving the efficient use of official development assistance in road transport infrastructure construction 1.3.1.1 China 1.3.1.2 Indonesia 1.3.1.3 Some countries in Africa 1.3.2 Learned - lessons for Vietnam Priority targets is set by donors must match the national priority goals. Ensuring proactivity in receiving, managing and using ODA. Designing ODA road infrastructure projects matches reality more important than the amount of money that the project is provided. Road traffic projects using ODA funds should be public, transparent and strictly followed the process set by the State and the capital donor. Strengthen decentralization in ODA management. Strengthen the management ODA using in infrastructure development. Selection of contractors through competitive bidding. Beneficiary participation is crucial to the success of using ODA in road transport infrastructure construction. 10 CHAPTER 2 RESEARCH METHODS 2.1 Evaluate the efficiency of ODA use in road transport infrastructure construction in Vietnam 2.1.1 Evaluate the efficiency of official development assistance in road traffic infrastructure construction at macro-level 2.1.1.1 Evaluation model The author's research model is shown as follows: GDP = β0+ β1*ODA+ β2*FDI + β3*VDT+ β4* Labour Figure 2.1: Research model of the effects of ODA in road transport infrastructure construction on Vietnam's GDP Table 2.1: Description of variables used in the regression model to assess the impact of ODA in road transport infrastructure construction on Vietnam's GDP Variable Symbol Mean Independent ODA Official development assistance capital (disbursement) for constructing road transport infrastructure of Vietnam FDI Implemented Foreign Direct Investment of Vietnam VDT Vietnam’s domestic capital Labor Vietnam’s labor force Dependent GDP Vietnam’s Gross domestic product 2.1.1.2 Assessment Data Research data was collected quarterly from the first quarter of 2010 to the fourth quarter of 2018 from reliable sources, ensuring the objectivity and accuracy of the research results. Data collected by author is time series data with 36 observations. This ensures a suitable sample size for time series data analysis. ODA FDI VDT GDP Labour 11 2.1.1.3 Data processing method The research data was collected and put into R–project for regression analysis. 2.1.2 Evaluate the efficient use of official development assistance in road transport infrastructure construction in Vietnam at micro level 2.1.2.1 Developing scales, survey questionnaires to evaluate the efficient use of official development assistance in road transport infrastructure construction in Vietnam Procedures for the qualitative assessment of the efficiency of ODA use in road traffic infrastructure construction in Vietnam include: building a research scale, interviewing experts and adjusting the scale. 2.1.2.2 Methods of survey, collecting evaluation opinion In 645 questionnaires (314 beneficiary votes and 331 expert votes), the author eliminated 106 beneficiary votes and 98 expert votes that did not meet survey requirements, retain 208 beneficiary votes (accounting for 66.24%) and 233 expert votes (accounting for 70.39%) tha meet the requirements to perform statistical calculations. The results obtained will be processed by SPSS 20.0 software 2.1.2.3 Data Analysis Methods Collecting data will be encoded, checked, and processed using SPSS 20.0 software. After considering and removing non-conforming samples, the data is processed by computer according to the respective criteria. 2.2 Evaluating factors impact on the efficiency of official development assistance use in road transport infrastructure construction in Vietnam 2.2.1 Developing a scale of factors affecting the efficiency of using official development assistance in road transport infrastructure construction in Vietnam Figure 2.2: Research model of factors affecting efficiency of ODA use in road traffic infrastructure construction in Vietnam 2.2.2 Survey and data analysis methods Collected data will be encrypted and examined. Data processing was used using SPSS 20.0 software. After considering and removing non-conforming samples, the data The consistency of the management policy Financial capacity Managing and executive staffs capacity Efficient use of ODA in road transport infrastructure construction Constructor capacity 12 is processed by computer according to the respective criteria. After processing, the data will be analyzed based on the following tests: Descriptive statistical method, Analysis and assessment of reliability of the scale, Method of Exploratory Factor Analysis (EFA - Exploratory Factor Analysis), Test regression model. CHAPTER 3 CURRENT SITUATION OF THE EFFICIENT USE OF DEVELOPMENT ASSISTANCE CAPITAL OFFICIAL IN ROAD TRAFFIC INFRASTRUCTURE CONSTRUCTION IN VIETNAM 3.1. Current situation of ODA use in road transport infrastructure construction in Vietnam 3.1.1 Road Traffic Infrastructure in Vietnam Road traffic plays an important role in the national transportation system as well as in the socio-economic development. It contributes to ensuring national defense - security, and improving living standards. By far, the road transport is the largest compared to other modes of transport. Every year, 70% of freight and 90% of other passengers are transported by road. Therefore, road transport is of the most important, most popular, and accounts for the largest volume of domestic passenger and cargo traffic. 3.1.2 Outline of the receipt and management of official development assistance in road traffic infrastructure construction in Vietnam In fact, ODA has made a very important contribution to improving, upgrading and developing the transport infrastructure of Vietnam in general and road traffic in particular such as reducing travel time, increasing high safety and connecting of modes of transport,Completing ODA road transport projects all have traffic volume exceeding the initial forecast, contributing positively to growth, improving the competitiveness of the economy, contributing to poverty reduction for the country during the past 25 years. 3.1.3 Attraction and use situation of official development assistance funds in road transport infrastructure construction in Vietnam 3.1.3.1 Structure of ODA in road transport infrastructure construction in the total ODA disbursement in Vietnam In the period 2010 - 2018, the total ODA disbursement for the transport sector reached 10,739 billion USD, accounting for nearly 29.63% of the total ODA disbursement for sectors in the economy. This capital is mainly allocated to the road transport system (7.033 billion USD, equivalent to 65.49%), followed by railway traffic; waterway and airway (Details in Table 3.4). The annual disbursement of ODA for road traffic infrastructure construction accounts for approximately 16% to 23% of the total ODA disbursement for all sectors in the economy. 13 Table 3.1: Allocation of ODA funds in transportation by sectors in the period 2010 - 2018 (Unit: billion USD) Ord Field Disbursement ODA Proportion (%) 1 Road 7,033 65,49 2 Railway 1,566 14,58 3 Waterway 1,206 11,23 4 Airway 0,934 8,7 Total 10,739 100 Source: Department of Planning - Investment, Ministry of Transport Along with outstanding achievements in national renovation and construction, the signed ODA in road traffic infrastructure construction increased relatively rapidly, especially in the period 1998 to 2003 with the growth rate on average is approximately 44%. Proportion of annual disbursement ODA in road traffic infrastructure construction is approximately 60-70%. However, this disbursement rate has not yet met the goals set out in the socio-economic development plans and the disbursement rate is still lower than the world and regional averages for some specific donors. 3.1.3.2 Structure of official development assistance capital in Vietnam road transport infrastructure construction by major donors 3.2 Efficient use of official development assistance in road transport infrastructure construction in Vietnam 3.2.1 Evaluatingthe impact of official development assistance in road transport infrastructure construction on Vietnam's economic growth 3.2.1.1 Data description When putting data into R-project, the results of statistical data are as follows: Table 3.2: General descriptive statistics data Value GDP (thousand billion dong) FDI (billion dong) VDT (billion dong) ODA (billion dong) Labour (thousand people) Mean 688,6 60.372 196.861 2.998 51.558 Maximum 1135,0 98.251 344.954 4.143 54.530 Minimum 413,0 45.153 99.100 1.784 45.413 Median 658,6 54.713 184.727 3.121 52.765 Source: R project 3.2.1.2 Regression analysis to evaluate the impact of ODA in road traffic infrastructure construction on Vietnam's GDP (a) Stability test 14 Table 3.3: Stationary test of variables Variables P-value GDP* 0,01 FDI* 0,01 VDT* 0,06806 ODA** 0,01 Labur* 0,08245 * first difference, ** second difference Source: R-project In model regression, the dependent variable is GDP, the independent variables are ODA, FDI, VDT, and Labor. Each variable selected in each model is different, we choose different variables. The following results are: Table 3.4: The optimal model selection from regression results p!=0 EV SD model 1 model 2 model3 Intercept 100.0 1.008e-02 1.760e-02 1.393e-02 3.237e-03 6.365e-03 FDI_diff 67.1 4.508e-06 4.004e-06 6.812e-06 6.570e-06 . VDT_diff 100.0 3.118e-06 8.536e-07 2.749e-06 2.662e-06 3.730e-06 ODA_diff2 94.7 7.873e-05 3.325e-05 8.474e-05 9.006e-05 7.679e-05 Labour_diff 57.1 -2.455e-05 2.708e-05 -4.325e-05 . . nVar 4 3 2 r2 0.914 0.903 0.888 BIC -6.950e+01 -6.863e+01 -6.739e+01 post prob 0.408 0.263 0.141 model 4 model 5 Intercept 1.667e-02 1.323e-02 FDI_diff . . VDT_diff 3.849e-06 4.760e-06 ODA_diff2 7.126e-05 . Labour_diff -4.121e-05 -4.772e-05 nVar 3 2 r2 0.899 0.877 BIC -6.729e+01 -6.416e+01 post prob 0.135 0.028 (Source: R-project) 15 We found that R2 in model 1 and model 2 are high, but the explanation coefficient for the variable Labor is not as expected in model 1, so model 2 is the most optimal. According to the second model, the variable Labor is excluded from the model. The results of rerun the model are as follows: Table 3.5: Regression results of the selected model include 3 independent variables FDI, ODA, VDT Estimate Std. Error t value Pr(>|t|) (Intercept) 3.237e-03 1.629e-02 0.199 0.843833 FDI_diff 6.570e-06 3.091e-06 2.126 0.041886 * VDT_diff 2.662e-06 6.744e-07 3.948 0.000441 *** ODA_diff2 9.006e-05 2.798e-05 3.218 0.003088 ** --- Signif. codes: 0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1 Residual standard error: 0.09359 on 30 degrees of freedom (1 observation deleted due to missingness) Multiple R-squared: 0.9027, Adjusted R-squared: 0.8929 F-statistic: 92.74 on 3 and 30 DF, p-value: 2.847e-15 Source: R-project b) Model’s defect test • Multi-collinearity Through the multi-collinearity defect test results shown in Table 3.9, model has multi-collinearity, but the VIF coefficients of the independent variables are in the range (1,10), so the model is acceptable. Table 3.6: VIF coefficients of independent variables FDI_diff VDT_diff ODA_diff2 3.204356 5.465682 2.562057 Source: R-project (c) Autocorrelation test Using Breusch-Godfrey test Hypothesis Ho: There is no autocorrelation Table 3.7: Autocorrelation test result data: hoiquy LM test = 5.5108, df = 1, p-value = 0.0189 Source: R-project Because P-value Rejects Ho => There is autocorrelation To overcome the autocorrelation defect, we rerun the model with the following results: 16 Table 3.8: Regression model after fixing defects T test of coefficients: Estimate Std. Error t value Pr(>|t|) (Intercept) 3.2373e-03 1.2576e-02 0.2574 0.798621 FDI_diff 6.5704e-06 3.7850e-06 1.7359 0.092839 . VDT_diff 2.6624e-06 8.1146e-07 3.2810 0.002626 ** ODA_diff2 9.0056e-05 2.1863e-05 4.1190 0.000275 *** --- Signif. codes: 0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1 Source: R-project GDP = 0,0032373 + 0,000090056*ODA+0,0000065704*FDI + 0,0000026624*VDT The general regression results show ODA has a positive impact on GDP or ODA in road transport infrastructure that has a positive effect on Vietnam's economic growth. When the difference (the next 2 quarters compared to the previous quarter – because of taking the second difference) of ODA increases by 1 billion dong, the difference in GDP (next quarter compared to the previous quarter - because the first difference of GDP) increases 0.000090056%. Research results are completely consistent with the author's initial research expectations. 3.2.2 Evaluating the effecient use of official development assistance in road transport infrastructure construction in Vietnam at micro level 3.2.2.1 Descriptive statistics survey data to evaluate the effectiveness of the use of official development assistance in road transport infrastructure construction in Vietnam a. Analyze the characteristics of the surveyed object - The results of the survey on 233 staff involved in the administration and management of ODA projects in road traffic infrastructure construction in Vietnam show that most staffs are men with 84%, women only 16%. In terms of education, all managers have bachelor degrees and mainly postgraduate with 61%. - Results of the survey of 208 beneficiaries of projects using ODA in the road traffic infrastructure construction in Vietnam show that men account for 63%, and women account for 37%. In term of education, survey beneficiaries had bachelor degree with the highest proportion with 36% and postgraduate qualification ranked second with 26%, with the lowest being elementary and middle degree. provision only accounts for 16%. b. A qualitative assessment of the effecient use of official development assistance in road transport infrastructure construction The author uses the statistical method to describe the results of survey data of project managers and beneficiaries on the evaluation of the efficiency of using ODA in road traffic infrastructure construction in Vietnam shown in the table below: 17 - The statistical results of survey data on the appropriateness of projects using ODA in road traffic infrastructure construction showed Staff involved in the management and administration of projects have evaluated fair and high levels, while beneficiaries have evaluated at fair and average levels. - Survey results show that Staff involved in the management and administration of projects evaluate the effectiveness of projects using ODA in the road transport infrastructure construction in Vietnam is at a good level with the assessment of HQ1CG, HQ4CG and average with 2 comments HQ2CG, HQ3CG which showed that progress of project implementation is often not in line with the proposed plan, especially the progress of counterpart funding has the lowest score which asscessed partly shows the delay in the implementation progress of the current road traffic infrastructure projects. For beneficiaries, the assessment is at fair and average level. - About the efficiency of projects using ODA in road traffic infrastructure construction, statistical results of survey data on staff involved in the management and operation of projects with assessment in 3 levels are high, fair and average while beneficiaries are at fair and average levels. - The results of statistical survey data on the impact of ODA projects in road traffic infrastructure construction show that the staff involved in the management and operation of the projects have an assessment at fair level, while the beneficiaries are at fair and average levels. - Statistical results of survey data on the sustainability of ODA projects in road traffic infrastructure construction show that the staff involved in the management and operation of the projects and the beneficiaries are at 3 levels of high, fair and average. 3.2.2.2 Testing the reliability of the scale Based on the Cronbach's Alpha test, in order to increase the reliability of the scale, we need to remove some variables especifically: PH3CG, PH5CG, HQ3CG, HS3CG, BV3CG. The results of the data verification for the survey scale for the efficiency of using ODA in road transport infrastructure construction of the project managers show the Cronbach-alpha coefficient (if removing observed variables such as TD1CG, HS1CG) is higher than the present value, but it still ensures that the Cronbach-alpha coefficient reaches> 0.6 and these observed variables all carry the necessary information for the needed survey data so it should be retained in the author's opinion. The results of the data verification for the survey scale of the efficiency of using ODA in road traffic infrastructure construction for beneficiaries show that the total variable correlation coefficients are> 0,3, Cronbach-alpha coefficients are all> 0.6, Cronbach-alpha coefficients if removing observed variable HS1TH is higher than the current value, but the it still ensures the Cronbach-alpha coefficients are all> 0,6 and this observed variable carries necessary information for the data to be surveyed, so in the opinion of the author, this observed variable is still retained. 18 3.3 Evaluate the impact of these factors on the efficiency of official development assistance in road transport infrastructure construction in Vietnam 3.3.1 Descriptive statistics of survey data on factors affecting the efficiency of using ODA in road transport infrastructure construction in Vietnam 3.3.1.1 Evaluation of The consistency of Management Policy Results ranged from 2,58 to 3,84. Some contents have a relatively low rating such as "Site clearance" only reached 2,58. This also shows a long-standing fact, many projects located in urban areas lack capital for site clearance, so the clearance work faces many difficulties, affecting significantly on project progress and total investment. Most of the traffic construction projects are slow to hand over the ground, many bidding packages near the end of the construction time have not yet handed over the ground. 3.3.1.2 Evaluation of Financial Capacity Results ranged from 3,79 to 4,23. Lack of counterpart funds for ODA projects will certainly continue to be one of the vast barriers in infrastructure development. The severe shortage of reciprocal capital occurred on a large scale in a series of key projects using ODA loans, causing construction progress delayed. 3.3.1.3 Evaluation of managerial and executive staff capacity Statements ranged from 3,81 to 4,42 which got the highest rating is that the trained professional level is highly relevant to the requirements of the current job with 3,81. The majority of staff members have postgraduate qualifications in accordance with the trained technical specialties 3.3.1.4 Evaluation of Contractor's Competency Results ranged from 3,43 to 3,77 with the highest rating is NT5(3,77). NT1 has the