Doctor of Finance - Banking thesis summary: Efficiency of the use of Official Development Assistance (ODA) in the transport sector in Vietnam

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- Evaluate the impact of these factors on the efficiency of using ODA in road traffic PREFACE (INTRODUCTION) infrastructure construction in Vietnam. - Proposing a number of recommendations to improve the efficiency of using ODA in the construction of road traffic infrastructure in Vietnam.

4. Research question (i) What is the concept of efficient use of ODA in road infrastructure construction? What are the criteria for evaluating the efficient use of ODA in road transport infrastructure construction?

(ii) What are the main factors impact on efficient use of ODA in road infrastructure construction? What are levels of the impact of these factors on the efficient use of ODA in road infrastructure construction in Vietnam? (iii) How to improve the efficient use of ODA in road infrastructure construction in Vietnam?

1. The urgency of the topic In the global economic integration context, transport infrastructure is identified as one of three breakthrough stages that need to be prioritized for investment and development at a fast and sustainable pace in order to attract foreign investors according to the development strategy of Vietnam. However, the infrastructure in general and the transport sector infrastructure in particular still has many weaknesses, which are "bottlenecks of development” and need to be resolved for sustainable development foundation. In this situation, while the nation budget is limited, ODA is prioritized for use as compared to other sources of capital because of its advantages. In recent times, ODA accounts for about 70% of the total value of investment capital in the transport sector. ODA allocated to the transport sector accounts for more than 30%, while ODA for health - society is only 4.54% and for education and training is 3.84%. The attraction and use of ODA for infrastructure investment in the transport sector are of great interest to the Government. Although ODA has been attracted quite a large amount, the infrastructure of the transport system in Vietnam, especially road traffic, is still very weak and inadequate. This proves that the efficiency of using ODA has not really been achieved as expected while the structure of ODA has changed: gradually reducing non- refundable ODA, gradually increasing ODA concessional loans and some donors provide ODA loans with less loan incentive. So the author has chosen the topic "Efficiency of the use of Official Development Assistance (ODA) in the transport sector in Vietnam" to propose some recommendations to improve high efficiency use of ODA in the coming time, to contribute to the realization of the Vietnam's socio-economic development goals. 5. Overview of research related to the thesis (literature review) 5.1. Foreign studies 5.1.1 Studies on the origin of ODA Fuhrer, H. (1996) showed that OECD introduced the concept of ODA for the first time as follows: “ODA is a formal transaction established with the primary purpose of promoting socio-economic development of developing countries, the supporting element accounts for a certain amount in this grant, the financial condition of this transaction is soft and has a grant element”. In OECD reports added in later years, quantifying the percentage of the supporting factor is 20-30% depending on the donor as well as the recipient country.

2. Object and scope - Research object: Effectiveness of using ODA in the transport sector. - Research scope: Content: The thesis focuses on researching the efficiency of using ODA capital in road traffic infrastructure construction with physical form (focusing on the system of bridges and roads).

About time: the period 2010 - 2018 Research space: Research conducted in the field of road traffic infrastructure construction in Vietnam.

3. Research objectives - Systematize the criteria for evaluating the efficiency of using ODA in road traffic infrastructure construction and factors affecting the efficiency of using ODA in road traffic infrastructure construction in Vietnam. - Analyze and evaluate the current situation of the efficiency of using ODA capital 5.1.2 Studies on evaluating the impact of ODA on economic growth Some studies of critics on foreign aid programs have suggested that poverty reflects government failure. Boone (1996) studied aid effectiveness based on the analytical framework between aid effectiveness and political regimes and found that aid did not significantly increase investment, nor benefit the poor through improvements in the human development index, but it increases the size of the government. Lesink, R., Morrissey, O. (2000) pointed out that the limitations of ODA to developing countries in microeconomic perspective are uncertait from aid funding. The externalities have had a negative impact on the financial and investment policies of the recipient countries. Knack, S. (2000), researched on cross-sectional data on the relationship between aid and the quality of institutions including variables: corruption, legislation, and administrative procedures, have concluded that aid undermines quality of government which means aid creates corruption, bureaucracy. Bhandari et al. (2007) examined the effectiveness of foreign aid and foreign direct investment in the Czech Republic, Estonia, Hungary, Latvia, Lithuania and Poland. The results indicated that foreign aid did not have any significant effect on real in the construction of road traffic infrastructure in Vietnam.

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GDP. In Mallik's study, G. (2008) it could be seen that after more than thirty-five years of development assistance, the effect of foreign aid on growth is negative for most of these countries. Research by Driffield, N., Jones, C. (2013) assessed the relative contributions of foreign direct investment (FDI), official development assistance (ODA) and remittances to growth. economy in developing countries. the developing world, the current ODA policy debate still had many problems. Regarding the factors affecting the efficiency use of ODA in road transport infrastructure construction in Vietnam, the author based on foreign studies about various factors affecting the efficiency projects about road transport infrastructure in Vietnam such as: Era Flyvbjerg (2003), Esfahani and Ramirez (2003), Haque and Kneller (2008), Dabla-Noris et al (2011), Baral (2005); Kouser et al. (2011), Robert S.pindyck and Daniel L. Rebinfeld (1995).

Disagreeing with the above point of view, most researchers have pointed out that ODA has a positive impact on economic growth. Research by Chenery, H.B and Strout, A.M (1966) has emphasized the importance of ODA. The author has argued that the necessary of capital support from the early developed countries is very important in the economic development in developing countries. Burnside, C. and D. Dollar (2000) theoretically showed that the impact of foreign aid on growth easily proves to be ambiguous. The more transparent the institution, the more transparent ODA has to promote economic growth. Hansen & Tarp (2001) found that aid is a very important factor affecting average GDP growth. Karras, G. (2006) used data from 71 aid recipient developing economies over the period (1960 - 1997) to study the relationship between foreign aid and GDP per capita. Adams, S. and Atsu, F. (2014) examined the impact of aid on economic growth in Ghana between 1970 and 2011. Tang, K. and Bundhoo, D. (2017) investigated the impact of foreign aid on the economic growth of sub-Saharan Africa. The authors support this view that aid depends greatly on the quality of the policies of the recipient country. ODA has a positive effect on growth in countries with good political institutions.

5.2 Domestic studies 5.2.1 Studies on investment in transport infrastructure construction Bui Van Khanh (2010) gave a theoretical system about the mechanism of mobilizing financial resources in which the state budget is mainly invested in road traffic infrastructure, then analyze the current situation and propose solutions to mobilize investment capital for road traffic development in Hoa Binh province. Tran Minh Phuong (2012) has studied the impact of transport infrastructure on socio-economic development. Nguyen Quoc Huy (2014) systematized, analyzed and clarified the basic theoretical issues of road transport infrastructure, spending and managing local budget spending on . road traffic infrastructure construction. Cu Thanh Thuy (2018) used the multivariate regression method to analyze the factors impact on the results of investment in the development of road traffic infrastructure which are invested by State budget in Vietnam. 5.2.2 Studies on evaluating project effectiveness and efficiency use of ODA Research by Vu Thi Kim Oanh (2002) analyzed the role and impact of ODA in the economic development strategy of developing and underdeveloped countries, the situation of using ODA in Vietnam in two period of time (1975 - 1990) and after 1990, then proposed the main solutions for the effective use of ODA in Vietnam until 2010. Ton Thanh Tam (2005) systematized theoretical issues for the effectiveness of the direct management of ODA, which is concessional ODA in the period (1993 - 2003) and analysed deeply and assessed of the current state of management of ODA concessional loans in Vietnam in recent years. Le Ngoc My (2005) researched on state management of ODA in Vietnam, gave an overview of official development assistance (ODA) and state management on ODA, analysis of the current situation of attract and manage the state on ODA.

About the factors affecting the efficient use of ODA in road transport infrastructure construction in Vietnam, the author based on studies about various factors affecting the effectiveness of the project such as From Quang Phuong, Pham Van Hung (2013), in their research pointed out that the institution, the level of management of State management agencies ... had a direct effect on investment returns as well as effectiveness results of investment projects.

Ha Thi Thu (2014) in research on attracting and using ODA in Vietnam's agricultural and rural development clarified theoretical framework of ODA for agriculture and rural development, analyzed the current situation of ODA attraction and 5.1.3 Studies on evaluation of effectiveness of ODA programs and projects The study of Ika, L. A. (2009) showed the inconsistency in the views on the success of the project, but it was not possible to synchronize the implementation and effectiveness of the project. Aid assessment plays an essential role in the efforts to improve the quality of development cooperation. OECD presented a set of principles on the most important requirements of the assessment process. According to OECD (1991) assessment is as much a systematic and objective appraisal as possible that looks at the design, implementation and results of an ongoing or accomplished project, program, or policy. According to research by Chianca, TC (2008), the five assessment criteria from the Committee for Economic Development Cooperation and Development (OECD / DAC) are a solid foundation for the ODA assessment from 1991. These are the most prominent and widely applied criteria used to evaluate aid by most bilateral and multilateral donor agencies, as well as international non-governmental organizations. According to MOFA (2013), Japan's Ministry of Foreign Affairs implemented an annual assessment (third-party review) program to enhance transparency and public accountability, as well as to improve management of the Japan Official Development Assistance (ODA). In the study of Surya Raj Acharya (2003) facing the pressure to improve the efficiency of ODA capital and address the difficult challenges of poverty reduction in

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(2) Some studies analyzed the factors affecting the efficiency of ODA use in general, but the assessment only stops at the qualitative level not yet quantified the impact level of factors on the efficiency of using ODA in road traffic infrastructure construction in Vietnam. Therefore, there is a need for an in-depth study on the effective use of ODA in road transport infrastructure construction in Vietnam.

6. The novelty of the thesis 6.1 New academic and theoretical contributions (1) Based on the growth model of Harrod - Domar (Harrod, 1939; Domar, 1946), the thesis has established a regression equation to evaluate the efficiency of using ODA in road traffic infrastructure construction at macro-level, evaluation criteria at a micro level and measuring the impact of these factors on the efficiency of using ODA in this area.

(2) Based on the reference to researches of Baral (2005); Kouser et al (2011), S. Pindyck and L. Rubinfeld (1995), Tu Quang Phuong and Pham Van Hung (2013) ... and consulting with experts, the thesis built a scale of factors. The impact on the efficiency of using ODA in road transport infrastructure construction at a micro level includes four factors: consistency of management policies, Management staff Capacity, Contractor capacity and financial capacity.

infrastructure construction. Road in

6.2. New findings and proposals from survey results of the thesis (1) The results of a regression model assessing the impact of ODA in road transport infrastructure construction on Vietnam's economic growth have indicated transport official development assistance infrastructure has a positive effect on Vietnam's economic growth. The research results are the basis for the author to make recommendations to improve the efficiency of using ODA in the construction of road transport infrastructure in Vietnam.

use in agricultural and rural development in the Central Coast region. Nguyen Quyet (2014), studied the relationship between ODA and economic growth in Vietnam. The study mainly used analytical methods based on Granger test, Johansen cointegration test and VECM model. The empirical results have shown that in the long term as well as in the short term, the flow of ODA aid has a positive impact on economic growth. Nguyen Thi Lan Anh (2015) has contributed to systematizing the theoretical basis of the efficiency of ODA use, evaluating the current status of the efficiency of ODA use based on a group of qualitative, quantitative criteria and analyzing some basic factors affecting the efficiency of ODA use in the Northwest region. Nguyen Hoang Thuy Bich Tram et al (2016) used ARDL to estimate the long-term and short-term effects of ODA and FDI on Vietnam's economic growth with research data from 2007 to 2015. Hoang Vu Hiep et al. (2016) used a quantitative approach with ARDL to assess the overall long-term and short-term effects of ODA, FDI and domestic investment on Vietnam's economic growth in the period 1995-2015. 5.2.3 Studies on the efficient use of ODA in the transport sector Bui Nguyen Khanh (2002) highlighted the important role of ODA and FDI, the interaction of them in the transport nfrastructure construction sector in Vietnam. Research by Nguyen Thi Hoang Oanh (2006) examined the reality of the implementation of ODA projects in urban infrastructure, mainly focusing on some areas such as transportation, electricity supply, public lighting, water supply, drainage, and environmental sanitation… in period of (1985 - 2005). Nguyen Khanh Hang (2012) focused on assessing the attraction and use of ODA for projects in the transport sector in Vietnam in the period (1993 - 2010). Tran Dinh Nam et al (2017) in the study “Factors Affecting ODA Project Performance: The Case of Urban Railway Projects in Vietnam”, developed and changed the assessment model of the factors affecting effectiveness of ODA project. The study applied qualitative methods (one-on-one discussions, group discussions, 2-round expert network interviews) to develop models and use quantitative methods (Cronbach Alpha test, EFA test, CFA and SEM) to change the model. Tran Dinh Nam (2017) in his Ph.D. thesis has been based on a business approach to model the factors that affect the efficiency of ODA use and test its reliability through experimental data.

(2) By using the least squares method (OLS), the research results show that there are three factors that have a positive impact on the efficiency of using ODA in road transport in Vietnam in which Consitency of management staff has the strongest impact, followed by contractor capacity and financial capacity. Based on the test results of the impact factor assessment model, the author has proposed appropriate groups of recommendations to improve the efficiency of using ODA in the construction of road traffic infrastructure in Vietnam. For example, strengthening capacity for management and operating staff, Contractor capacity, financial capacity and other recommendations. 5.3 Research Gaps Based on the overview results of studies in Vietnam and around the world, it has shown that, theoretically, step by step, these studies has been strengthened and completed the theoretical framework for ODA attraction and use. Practically, these studies have made certain contributions to the development of policies on ODA management and use. However, the author found:

7. The structure of the thesis In addition to the introduction, table of contents, list of tables, tables, figures, list of abbreviations, references and appendices, the thesis is structured with 4 chapters. (1) Some studies have given individual criteria to evaluate the efficiency use of ODA but have not proposed a model to evaluate the efficiency use of ODA in road transport infrastructure construction at the macro and micro level.

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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. CHAPTER 1 BASIS THEORY OF THE EFFICIENCY USE OF OFFICIAL DEVELOPMENT ASSISTANCE IN OF ROAD TRAFFIC INFRASTRUCTURE CONSTRUCTION 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 1.1 Theoretical issues about official development assistance 1.1.1 Concept of official development assistance From that overview, the author can give the following definition of ODA: “ODA is a foreign donor's aid which is a non-refundable or refundable aid to receipt country with preference interest rate, grace period and debt repayment period, ensuring the non- refundable factor is at least 25%”. 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 1.1.2 Characteristics of official development assistance First, ODA has high preference. Second, ODA often comes with binding conditions. 1.1.3 Classification of Official Development Assistance - By repayment method: non-refundable ODA and refundable ODA - By purpose of use: Program Support, Project Support, Technical Support. - Under the terms: obligatory ODA and non-obligatory ODA - By sources: bilateral ODA and multilateral ODA. 1.1.4 The impact of official development assistance - For aid-receipt countries: ODA is a supplement for domestic capital sources to promote investment in economic development. ODA help to reduce poverty and economic growth. ODA encourages developing countries to improve institutional capacity, state management apparatus and economy. Beside the positive impacts, ODA also has negative effects on aid recipient countries such as making the economy of ODA- receipt countries become dependent. transport infrastructure construction

- 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

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. 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

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1.2.3 Criteria to evaluate the effectiveness use of official development assistance in road transport infrastructure construction CHAPTER 2 RESEARCH METHODS 1.2.3.1 Criteria for evaluating the effectiveness use of official development

2.1 Evaluate the efficiency of ODA use in road transport infrastructure

assistance in road transport infrastructure construction at macro-level 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: 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. GDP = β0+ β1*ODA+ β2*FDI + β3*VDT+ β4* Labour 1.2.3.2 Criteria for evaluating the effectiveness use of official development

ODA

assistance in road traffic infrastructure construction at micro-level Criteria to evaluate the efficiency of using ODA in road traffic infrastructure

FDI

construction include: Relevance, Effectiveness, Effciency, Sustainability.

GDP

1.2.4 Factors affecting the efficient use of official development assistance in

VDT

road traffic infrastructure construction

Labour

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

Figure 2.1: Research model of the effects of ODA in road transport infrastructure construction on Vietnam's GDP 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 Table 2.1: Description of variables used in the regression model to assess the 1.3.1 Experiences of some countries in improving the efficient use of official impact of ODA in road transport infrastructure construction on Vietnam's GDP development assistance in road transport infrastructure construction Symbol Mean Variable development ODA capital transport

Independent Official assistance (disbursement) for constructing road infrastructure of Vietnam Implemented Foreign Direct Investment of Vietnam FDI Vietnam’s domestic capital

Vietnam’s labor force Vietnam’s Gross domestic product VDT Labor GDP Dependent

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. 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.

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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 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. 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. 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

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

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. 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. 3.1.2 Outline of the receipt and management of official development assistance 2.2 Evaluating factors impact on the efficiency of official development in road traffic infrastructure construction in Vietnam 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

The consistency of the management policy

Financial capacity

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

Efficient use of ODA in road transport infrastructure construction

Managing and executive staffs capacity

ODA disbursement in Vietnam

Constructor capacity

Figure 2.2: Research model of factors affecting efficiency of ODA use in road traffic infrastructure construction 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. 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

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Table 3.1: Allocation of ODA funds in transportation by sectors in the period 2010 - 2018 (Unit: billion USD) Ord Field Disbursement ODA Proportion (%)

Table 3.3: Stationary test of variables Variables GDP* FDI* VDT* ODA** Labur* P-value 0,01 0,01 0,06806 0,01 0,08245 * first difference, ** second difference 1 Road 2 Railway 3 Waterway 4 Airway Source: R-project 7,033 1,566 1,206 0,934 10,739 65,49 14,58 11,23 8,7 100

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 Total 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 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 . . 3.2 Efficient use of official development assistance in road transport infrastructure construction in Vietnam nVar 4 3 2 3.2.1 Evaluatingthe impact of official development assistance in road transport infrastructure construction on Vietnam's economic growth 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 . . Value

VDT_diff 3.849e-06 4.760e-06 ODA_diff2 7.126e-05 .

Labour_diff -4.121e-05 -4.772e-05 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 ODA (billion dong) 2.998 4.143 1.784 3.121 GDP (thousand billion dong) 688,6 1135,0 413,0 658,6 VDT (billion dong) 196.861 344.954 99.100 184.727 FDI (billion dong) 60.372 98.251 45.153 54.713 Mean Maximum Minimum Median nVar 3 2 r2 0.899 0.877 BIC -6.729e+01 -6.416e+01 Labour (thousand people) 51.558 54.530 45.413 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 post prob 0.135 0.028 (a) Stability test (Source: R-project)

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Table 3.8: Regression model after fixing defects T test of coefficients: Estimate Std. Error t value Pr(>|t|) 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: (Intercept) 3.2373e-03 1.2576e-02 0.2574 0.798621 Table 3.5: Regression results of the selected model include 3 independent FDI_diff 6.5704e-06 3.7850e-06 1.7359 0.092839 . variables FDI, ODA, VDT 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

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 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. Source: R-project 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 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 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%.

(c) Autocorrelation test Using Breusch-Godfrey test Hypothesis Ho: There is no autocorrelation Table 3.7: Autocorrelation test result - 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%. data: hoiquy LM test = 5.5108, df = 1, p-value = 0.0189 b. A qualitative assessment of the effecient use of official development Source: R-project assistance in road transport infrastructure construction

Because P-value <0.05 => Rejects Ho => There is autocorrelation To overcome the autocorrelation defect, we rerun the model with the following results: 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:

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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 - 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.

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.

- 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.

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. - 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.

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

- 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. 3.3.1.4 Evaluation of Contractor's Competency Results ranged from 3,43 to 3,77 with the highest rating is NT5(3,77). NT1 has the lowest rating of 3,43. This also shows the fact that domestic contractors are very limited in financial capacity and construction experience compared to foreign contractors. 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.

3.3.2 Testing the reliability of the scale The analysis results show that the Cronbach'alpha coefficient of the scale "The consistency of the management policy" includes 6 observed variables with the observed variable CS6 with the value of the total variable correlation coefficient = 0.096 <0.3. Remove CS6, Cronbach'alpha coefficient of scale "Contractor capacity" includes 5 observed variables with the observed variable NT4 with the value of the total variable correlation coefficient = 0,299 <0.3, so remove NT4.

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. After removing two observed variables CS6 and NT4, the author conducted an analysis and re-evaluated the reliability of the scale showing that the remaining 17 observed variables were sufficiently reliable and cohesive to be able to form 4 independent variables are all correlation coefficients of total variables> 0,3 and Cronbach'alpha coefficients> 0,6. 3.3.3 EFA analysis The results of KMO coefficient test and Bartlett test of the dependent variable (PHCG, HQCG, HSCG, TDCG, BVCG) showed that the coefficient KMO = 0,637> 0,5, sig value = 0,000 <0,05, so the results of distribution factor analysis ensures reliability and

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statistical significance. The total value of variance = 61,315%> 50% shows that the factors analyzed from the analysis can represent 61,315% of the variation of the observations. The regression results show that the capacity of the executive management staff has the strongest impact on the efficiency of using ODA in road infrastructure construction in Vietnam, followed by contractor capacity. construction and financial capacity.

The results of KMO coefficient test and Bartlett testing of independent variables (shows KMO coefficient = 0,.709> 0,5, sig value = 0,000 <0,05, so factor analysis results ensure reliability and statistical significance level The total variance extracted = 67,754%> 50% shows that the factors analyzed from the analysis can represent 67,754% of the variation of the observations. CHAPTER 4 DISCUSSION OF RESEARCH RESULTS AND RECOMMENDATIONS TO IMPROVE THE EFFICIENT USE OF OFFICIAL DEVELOPMENT ASSISTANCE IN ROAD TRAFFIC INFRASTRUCTURE CONSTRUCTION IN VIETNAM

4.1 Research results discussion 4.1.1 Discussion on the results of the efficient use of official development assistance in road traffic infrastructure construction in Vietnam

In terms of Relevance, it can be seen that most of the ODA projects in road transport infrastructure construction selected for implementation are essential and have socio-economic effects. At the request of donors, ODA projects in road transport infrastructure construction are implemented in accordance with regulations, standards and supervised by international consultants so they have good quality, high aesthetics, especially projects funded by Japanese loans. The results of EFA analysis showed that there is a little difference between theory and reality. Specifically, there are 5 factors formed instead of the original 4 factors. These 5 factors explain 67,754% of the variation of observations. The reason for such results is because two observed variables CS5 and CS4 have combined together and form a new factor. However, to ensure convergence, two observed variables CS5 and CS4 are removed and not included in the calculation and data analysis. After making the above adjustments, the discovery factor analysis was performed again. As a result, all 4 factors are measured through the necessary number of observed variables and formed according to the proposed theoretical model. 15 observed variables were separated into four separate groups with Factor loading coefficient for each observed variable greater than 0.5. These four factors have Eigenvalue value greater than 1 and explain 63,706% of variation of all observations.

In term of Effectiveness, the allocation of counterpart funds (serving site clearance, taxes, project management, ...) for projects The ODA project was not timely and sufficiently responded, thus affecting the implementation progress of ODA projects, in recent years.

3.3.4 Correlation regression analysis The correlation coefficient test results show that: The dependent variable “Hieuqua” has a linear relationship with 3 independent variables TC, NT, and CB due to the value Sig <0,05, in which the correlation coefficient between “Hieuqua” and NT was 0,454. The dependent variable Hieuqua does not have a linear correlation with the independent variable CS due to the value Sig> 0,05

In term of Efficiency, compared with domestic projects, according to the "Study on Contracts and Unit Prices of Road Works in Vietnam" of the World Bank: "For both road projects are funded by the World Bank and other international financial institution, on average, the actual cost is slightly lower than the estimated value of the Consultant, while the projects are funded by State Budget, on average, the actual costs is higher than expected, although more than half of the packages have actual costs lower than estimated value ”.

3.3.5 Regression model Regression analysis was performed with 4 independent variables, including: The consistency of management policy (CS), Financial capacity (TC), Capacity of executive management staff (CB), Contractor Capacity (NT) and the dependent variable is efficiency of ODA use in road transport infrastructure (Hieuqua).

In terms of Impact, over the time, the transport sector has been invested and developed to promote the socio-economy towards the goal of bringing Vietnam into an industrialized country in 2020 and meet the international integration process. Including ODA capital for the development and change the face of transport infrastructure in Vietnam.

Through the above tests, it can be seen that the independent variables that have influenced the dependent variable are the efficiency of using ODA in road transport infrastructure construction. The regression equation is expressed as follows:

In terms of Sustainability, most of the implemented ODA projects are sustainable, but a few projects still have some problems, causing concerns…. As at present, maintenance capital accounts for only a very small part of investment capital. 4.1.2 Discussion on the factors affecting the efficient use of official development assistance in road infrastructure construction in Vietnam

Hieuqua = 0,1558+0,135TC+0,264CB+0,213NT Hieuqua: Efficiency in using ODA in road transport infrastructure construction in Vietnam TC: Financial capacity CB: Capacity of executive management staff NT: Contractor Capacity Research results show that the scales built in the model achieve the necessary reliability when conducting a preliminary assessment through Cronbach Alpha coefficients and exploratory factor analysis method EFA. This shows that there are

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- To perfect and basically modernize the road traffic infrastructure network; to continue building routes, highways, urban roads and ring roads. 4.3 Orientaions for the use of official development assistance and preferential loans in road infrastructure construction in Vietnam indeed factors affecting the efficiency of using ODA in road transport infrastructure construction in Vietnam. By the empirical assessment results show that only 3 out of the 4 studied factors that have a real impact on the efficiency of using ODA in road traffic infrastructure construction in Vietnam are Management staff capacity, Contractor capacity, and Financial capacity are statistically significant.

The study also noted a difference in the impact of factors on the efficiency of ODA use in road transport infrastructure construction in Vietnam, of which the biggest influence is the Management staff capacity (β = 0.264) followed by contractor capacity (β = 0.213) and the lowest is Financial capacity (β = 0.135). Although factors “the consistency of the management policy” has not shown a clear impact on the efficiency of ODA use in road transport infrastructure construction in Vietnam, interpreting these results does not make sense. This factor has no effect. The evidence for a non-statistically significant effect only allows conclusions for this sample. In order to invest and develop to meet the objectives set out by the Party's Resolution No. 13-NQ / TW, according to the Vietnam Transport Development Strategy and the approved transportation specialized development plans and plans, the key service in transport infrastructure development in the period 2016 - 2020 is determined as follows: Prioritize investment in about 2,000km of expressways according to the approved planning, focusing on construction in advance of some expressway sections considering the general efficiency of the operation of the parallel highway 1 sections; To invest in connecting Ho Chi Minh route and upgrading the section passing Tay Nguyen; To complete the upgrade and put the remaining national highways into technical grade; Choosing to invest in demand sections on coastal roads associated with sea dykes. 4.2 Perspectives and Goals of Road Traffic Infrastructure Development in Vietnam to 2030 4.2.1 Vietnam's road traffic infrastructure development perspective

4.3.1 Orientation to use foreign loans of the Government According to the project "Orientation to attract, manage and use ODA and preferetial loans of foreign donors in the 2016-2020 period" approved by the Prime Minister in Decision No. 251 / QD- TTg dated February 17, 2016:

In principle of capital use: ODA is prioritized for the implementation of infrastructure projects with high priority, pervasive impact, but no direct recovery. Preferential loans (IBRD, OCR, ...) are used to implement recoverable projects, projects that promote the private sector, including investment projects in the form of private public partnerships (PPP).

Road transport is an important part of socio-economic infrastructure that should be given priority to investment in development. To develop road transport in a reasonable, synchronous and sustainable way in stratigic plan with assignment, decentralization and cooperation, linking transport modes, in accordance with geographical conditions, creating into a smooth and efficient transportation network. To concentrate resources on building and upgrading a number of routes with great transport demands, basically bringing them into the technical grade of the existing road system; to build a number of sections of the North-South expressway, key expressways according to the approved planning; attaching importance to the management and maintenance to maximize the capacity of the existing transport infrastructure ... In principle of domestic financial management: To increase re-lending and reduce allocations from the state budget with projects using ODA loans and concessional loans. In principle of capital use: ODA is given priority to prepare and implement projects that cannot directly recover capital; projects under the State budget expenditure tasks are capable of generating revenue sources for socio-economic benefits. 4.2.2. The goal of road traffic infrastructure development in Vietnam 4.2.2.1 Up to 2020

In principle of domestic financial management: Allocation of the entire state budget for investment projects in infrastructure and social welfare that are unable to recover capital directly fall under the spending task of the central budget. The project is fully or partially recoverable: re-borrowing from the state budget according to the current law provisions.

To meet the needs of high quality and reasonable price for transporting goods and passengers; ensure safety, convenience, proceeding to reduce traffic accidents and limit environmental pollution; bring into full play the advantages of road transport with high mobility and efficiency in a short range of activities, consolidating goods, creating cargo space for other modes of transport. 4.2.2.2 Orientation to 2030

- To satisfy the society's demand for transportation and transportation services with high quality, fast, convenient and safe; connect with other modes of transport, especially long-haul points with urban passenger transport. 4.3.2 Orientation for using foreign loans of the Ministry of Transport According to the Government orientation above, the Ministry of Transport oriented the priority areas for using foreign loans of the Ministry of Transport are highways, some important highways (connecting with Laos, Cambodia and China, connecting with to major seaports), railway, inland waterways. Priority projects include projects with high economic internal rate of return (EIRR); The project can be implemented in the form of PPP.

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- The perception of ODA capital needs to change both at the ministerial, sectoral and local level. - Need to ensure a strong commitment, close direction and the participation of beneficiaries - It is necessary to study plans and strategies to gradually reduce the ODA capital, especially the conditional ODA, at the same time increase the attraction of other foreign investment capital sources such as FDI.

Appropriate policies and institutions are needed to create an environment for new aid. - The principles of openness and transparency in the management and use of ODA must be strengthened. Regarding the financial mechanism, for expressway projects, through calculation and reality, toll collection from expressway users cannot fully repay the investment capital, so mainly expressway projects Expected investment speed in the form of PPP. Thus, it is necessary to apply the mechanism of allocating ODA and concessional loans to the Ministry of Transport as the State's capital contribution to PPP projects. Some important national highways are incapable of direct capital recovery: applying the mechanism of allocating ODA and concessional loans to the Ministry of Transport. For a number of important national highways with partial capital recovery: allocate ODA and concessional loans to the Ministry of Transport as state capital contribution to PPP projects. CONCLUSION 4.4 Recommendations to improve the efficiency of official development assistance in road infrastructure construction in Vietnam

It can be seen that although ODA has been attracted quite a large amount, the transport system of Vietnam, especially road transport infrastructure, still has many shortcomings. Research to evaluate the efficiency of using ODA in road transport infrastructure construction and the factors affecting the efficiency of using ODA in road transport infrastructure construction in Vietnam becomes absolutely necessary. Based on the inheritance of previous studies and the application of appropriate research methods, the thesis "Efficiency of using official development assistance (ODA) capital in the transport sector in Vietnam" has been achieved. get some success:

4.4.1 Group of recommendations to improve the managers and executives capacity It is necessary to develop training plans and regulations on the entrance examination for State management staff positions, strengthen training, improve professional qualifications and management capacity for the management staff. Responsibility policies for officials and employees: clear, fair and equal remuneration regime is the motivation for the staff to strive hard for their work. Build a capable leadership, management team, and strengthen the responsibilities of heads at all management levels from state management agencies, supervisory units and construction units. Complete the project management structure in each participating unit. In many cases it is possible to hire outside consultants to participate in the project management. - Establish a model to evaluate the efficiency of using ODA in the construction of road traffic infrastructure at the macro and micro level. The general regression results show whether the value of ODA has a positive impact on GDP or official development assistance in road transport infrastructure that has a positive (positive) effect on growth. Vietnam's economy.

4.4.2 Group of recommendations for Contractor Capacity The Ministry of Transport should direct relevant agencies to closely manage and supervise the Investor's selection of contractors to ensure that the contractors participating in the project are qualified according to the provisions of law. when there are sanctions to require the Investor to supplement or replace the contractor who is weak in capacity or works behind schedule ... In addition, with the responsibility of the standing agency of the State Steering Committee and the Directly assigned to manage key national traffic works, the Ministry of Transport should actively regularly supervise and inspect to promptly remove difficulties and problems in order to speed up the implementation progress. project. 4.4.3 Group of recommendations to Improve Financial Capacity It is necessary to set up a plan to ensure effective funding. Develop a plan on disbursement schedule matching the project implementation schedule. Improve financial management capacity in each unit - By the empirical evaluation results show that among the 4 studied factors, there are only 3 recognized factors that have a real impact on the efficiency of using ODA in road traffic infrastructure construction in Vietnam. Management staff capacity, contractor capacity, and financial capacity are statistically significant. On the basis of the model's testing results, the author has proposed groups of suitable recommendations to improve the efficiency of using ODA in road traffic infrastructure construction in Vietnam. However, the thesis still has some shortcomings and limitations as follows: - In addition to qualitative analysis to assess the factors affecting the efficiency of ODA use in road traffic infrastructure construction in Vietnam, the quantitative analysis has not met the author's expectation. The factor The consistency of the management policy has not shown a clear impact on the efficiency of ODA use in road transport infrastructure construction in Vietnam, but interpreting this result does not mean that This factor has no effect. The evidence for a non-statistically significant effect only allows conclusions for this sample. 4.4.4 Groups of other recommendation - It is necessary to build a reliable partnership with donors, cooperate in

constructing and share responsibility in ODA provision and reception. - It is necessary to conduct supervision of ODA capital - The use of analyzing data to evaluate the efficiency of using ODA in the construction of road traffic infrastructure at the macro level is limited in the number of observations, which can be said to be a limitation of many studies. Save done with the time series.