ODA and other public investment priorities as part of the public debt management strategy

This paper presents a framework for prioritizing public investment projects, including overseas development assistance (ODA). It is intended as input into the government’s New ODA Directions draft document bearing in mind the public debt ceiling approved by the National Assembly and implemented by the government. While Viet Nam is not a heavily indebted country, persistently high fiscal deficits in recent years have heightened concerns about the economic risks associated with a rise in debt service obligations. The debt ceiling will motivate the government to achieve a more sustainable fiscal balance through a combination of widening the tax base and reducing spending, including more careful use of public investment resources, including ODA. What follows is an attempt to provide a set of selection criteria and an institutional framework for the allocation of public investment funds based on international experience and economic theory.