Nha Trang, June 10, 2006 – Representatives from the Government of Vietnam, 22 donor countries, 13 international agencies, 4 international NGOs, and the private sector gathered for the informal mid-year Consultative Group (CG) meeting in Nha Trang during June 9-10, 2006. They reviewed the state of Vietnam’s economy in the first 5 months of 2006, and discussed the implementation of Vietnam’s next 5-year Socio-Economic Development Plan (SEDP) 2006-2010, the preparation for the post-WTO accession period, and the status for reforms in key sectors. In a separate session, they discussed mechanisms to strengthen anti-corruption effors, public administration reform, and legal and judiciary development. They also assessed the effectiveness of Official Development Assistance (ODA). Earlier mid-year meetings have been held in Hue in 1998, Hai Phong in 1999, Da Lat in 2000, Hoi An in 2001, Ho Chi Minh City in 2002, Sa Pa in 2003, Vinh in 2004, and Can Tho in 2005.
H.E. Deputy Prime Minister Pham Gia Khiem opened the meeting by taking stock of the challenges facing Vietnam. “The meeting is taking place at a defining moment. With tremendous efforts, we have fulfilled the important task to conclude bilateral negotiations for WTO accession with all partners. The National Assembly will debate and approve the 5-year Socio-Economic Development Plan, 2006-2010, at its ongoing session. The Plan reflects the harmony of factors needed for sustainable development, gives strong emphasis to social issues, poverty reduction and the realization of the Millennium Development Goals. However, a plan is only as good as the outcomes it results in. We look forward to donors’ continued support to our efforts to monitor the progress of this Plan, and remain committed to raising aid effectiveness in line with the Ha Noi Core Statement. Going forward, it is imperative to strictly implement the Anti-Corruption Law, adopted by the National Assembly recently, and to investigate and handle corruption cases in a timely and open manner,” said the Deputy Prime Minister.
The Ministry of Planning and Investment (MPI) provided an update on recent socio-economic developments in Vietnam, noting the strength of the economy in spite of challenges from natural hazards, such as drought, flooding and Avian influenza. The Government also provided donors with an overview of the new 5-year SEDP, its results framework and ongoing efforts to more closely link the plan to annual budgets. Donors commended Government for the openness of the process to prepare the SEDP, which included consultations not only within government and with mass organizations, but also of the grassroots level and with donors. Delegates emphasized the importance of building capacity at the provincial level and in line ministries to implement the SEDP. They took note of preparations of the Ministries of Rural Development, Education, Health and Transport to implement the new SEDP, and recommended that similar processes be carried through in other line ministries.
“Vietnam should be congratulated for moving towards a modern planning framework, based on an open drafting process, where policies and resources are applied to achieve development goals and where regular monitoring and evaluation exercises are conducted. To ensure effective implementation, it will be essential to raise the capacity of provinces to formulate and implement their own plans, and to establish a mechanism to share good practices among provinces. It will also be important to further strengthen the links between the planning and budgetary processes, at both the central and provincial levels. A better integration of maintenance and capital expenditures will be essential to ensure effective utilization of infrastructure” Japanese Embassy Minister, Mr. Daisuke Matsunaga, said.
“The increased focus on environmental sustainability in the new SEDP is a timely development. Prompt actions on this front will be decisive in ensuring the sustainability of Vietnam’s remarkable record of growth and poverty reduction. The new law on environmental protection, which will take effect next month, also includes promising provisions on environmental impact assessments and strategic environmental assessment of sectoral and regional development plans. However, to carry out these promising initiatives, capacity needs to be strengthened particularly at the provincial level”, said H.E. Ambassador of Denmark, Mr. Peter Lysholt Hansen.Back to top Donors congratulated Vietnam on taking a major step towards WTO accession through successfully concluding its bilateral negotiations with the US, and noted that implementing the reforms entailed by WTO commitments should help Vietnam complete its transition to a market economy. Donors expressed their support for a strongly coordinated program of activities to address post-WTO issues.
“Achieving the SEDP’s social objectives will require special attention to the problems faced by groups such as ethnic minorities for whom the approaches for mainstream poverty reduction have not worked. In addition, for urban migrants it will be essential to ensure their equal access to public services. The Government should be commended for its leadership in identifying challenges for the vulnerable groups that may arise in the post-WTO accession period, and in engaging with donors to address them,” Ms. Bella Bird, Head of DFID, stated.
Delegates also emphasized the importance of prudent macroeconomic policies especially given the persistence of relatively high inflation rates, and the emergence of possible asset price bubbles. They stressed that swift implementation of the banking reform road map, recently approved by the Prime Minister, was essential to strengthen monetary policies and improve the quality of banking credit. They also emphasized the desirability of pursuing the SEDP targets in a flexible manner, and to adapt them in case circumstances change. “The favorable external outlook makes this a propitious time for the adoption of an appropriate policy mix to mitigate the risks to the SEDP’s objectives. To promote a higher quality pattern of private sector-led growth, we encourage the authorities to interpret the SEDP in a flexible manner, with the main targets viewed as indicative, and policies geared to strengthening macroeconomic discipline and speeding up market-oriented reforms,” said Mr. Lazaros Molho, Mission Chief for Vietnam, IMF.
Delegates were briefed on the recent meeting of the Vietnam Business Forum held in Hanoi on June 5, 2006. The Forum was attended by more than 300 representatives of the private sector, both local and foreign, as well as Government officials. “At the VietnamBusiness Forum, participants acknowledged the high degree of trust and confidence between Government and business, as witnessed in consultation on important business laws and their implementation decrees. They expressed the appreciation for Government’s achievements in concluding the negotiations on Vietnam’s WTO accession, and urged Government to widely disseminate information on the implications of accession to enterprises. Many participants also expressed their serious concern for the increasing corruption. They highlighted the need for transparency in public administration and in public procurement,” said Mr. Fred Burke from the Executive Committee of the VietnamBusiness Forum.
In a separate session, delegates took stock of recent Government initiatives to fight corruption, and donors pledged their continued support to further strengthen these efforts, based on sound diagnostic analyses. Delegates commended the Government Inspectorate for its work on the new law on anti-corruption, and took stock of recent efforts to strengthen other aspects of administrative, public finance, legal, and judiciary reform, required to combat corruption in the longer-run. These reforms were seen as integral components of a modern governance system that supports a market economy. Delegates noted that while such reforms may not confer immediate results in the fight against corruption, they will be the most effective or perhaps the only way to do so in the medium to long term.
“The Government’s and the National Assembly’s high-level commitment to tackle corruption, as reflected in the anti-corruption law, is commendable. Corruption hurts the poor disproportionately, increases the costs of doing business, and undermines popular support for ODA in donor countries. A free press has an important role to play to supervise government agencies, and recent revelations in the Vietnamese media of prominent corruption cases are in that sense a positive sign. Increasing transparency and accountability at all levels of government will be key to achieve genuine progress. Together with Canada, Denmark, the Netherlandsand Norway, Swedenis happy to support the Government Inspectorate increase its capacity to perform its important duties under the new anti-corruption law,” H.E. Ambassador of Sweden, Ms. Anna Lindstedt stated.
Sharing the outcome of the recent special audit of PMU1 prompted by the public concerns on PMU 18 case , Mr. Ayumi Konishi, ADB Country Director for Viet Nam voiced his concern that “It should borne in mind that the current discussion on the issue should not result in adding administrative layers which in fact can have adverse impact on the transparency and efficiency. What is needed is the simplification of the system, and to make the system transparent. Decentralization and empowerment accompanied by accountability is the key.” Back to top Speaking for the UN agencies, Mr. Nandy Subinay, Resident Representative a.i., UNDP, said “Recent events in Vietnamhave again drawn attention to the devastating impact of corruption. The UN supports the Vietnamese Government’s efforts to eliminate corruption from public and commercial life through systemic measures. The fight against corruption requires good governance systems, adherence to the rule of law, the development of democratic institutions and a greater role for the civil society in decision-making, monitoring and supervision in the public realm. In particular, we encourage the Government to better integrate the anti-corruption agenda and Public Administration Reform. We also urge the Government to expedite ratification of the UN Convention on Anti-corruption and implement the commitments made therein.”
Government and Donors discussed how to improve aid effectiveness through prompt implementation of the “Hanoi Core Statement” and its key principles of Government ownership, alignment of donor support, harmonization and simplification, managing for results and mutual accountability.
Delegates noted that progress in the area of harmonizing procedures continues to be good. They expressed their strong commitment to continue the promising efforts in implementing the Hanoi Core Statement, and to ensure that ODA commitments are translated into swift disbursements, and to support Government’s efforts in rationalizing ODA project management mechanisms. At the same time as donor procedures for delivering aid are being harmonized, donors expressed a willingness to support enhancing Government’s own systems and rely more on these for disbursing funds. But they noted that increased reliance on such modalities will need to be accompanied by strong measures to prevent mismanagement in the use of ODA funds.
Delegates commended recent steps taken in the health sector towards more sector-wide ODA approaches with increasing use of Government systems. Recent efforts to strengthen coordination in the context of the HIV/AIDS Donor Harmonization Working Group were also highlighted. It was agreed that progress on a set of concrete actions to improve coordination and program efficacy should be reported at the next CG meeting. Delegates emphasized the importance of continuing the efforts to eliminate stigma and discrimination against people living with HIV/AIDS. Donors suggested that a robust strategy to combat HIV/AIDS should involve a review of current policies towards commercial sex workers and drug addicts, including an assessment of the effectiveness of rehabilitation centers.
Mr. Klaus Rohland, World Bank Country Director for Vietnam, summed up the main themes of the meeting. “With WTO accession, Vietnamwill turn a page in its history. The new page holds the promise of fully realizing the many talents and resources of Vietnamese entrepreneurs in a vibrant private sector. The Government will continue to have an important, but refocused role. It will provide modern legal and institutional foundations for a market economy, and ensure that all Vietnamese citizens, regardless of geography, ethnicity or gender, have the same opportunities to share the benefits of growth. We all support the three main objectives of the SEDP, economic development, social inclusion and environmental sustainability. Building modern governance and through it fighting corruption will provide the foundation for long-term success in these areas.” concluded Mr. Rohland.
In his closing remarks, H.E. Planning and Investment Minister Vo Hong Phuc underlined Vietnam’s commitment to work with donors in implementing the new 5-year Socio-Economic Development Plan for 2006-2010. “The formulation of the new SEDP has been reformed in terms of both substance and methodology. During the drafting process, we have collected opinions from the people of all strata as well as from the donors and the business community. On behalf of the Vietnamese Government, I express my gratitude to the donor community for their active support in drafting the Plan. I hope we will achieve the same level of cooperation in the implementation of the plan and in the enhanced monitoring and supervision of its outcomes to the benefit of all Vietnamese people” Minister Phuc said.
In his closing remarks, Deputy Prime Minister Pham Gia Khiem commended the success of this meeting and again confirm the strong commitment of the Vietnamese Government in the successful implementation of the new Five Year Socio-Economic Development Plan, reforming and completing the legal framework, greater integration with the global and regional economy, and improving ODA efficiency.
In closing, delegates agreed that they would meet in December to the formal Consultative Group Meeting in Hanoi. Back to top The Mid-year Review meeting of the Consultative Group for Vietnam was held in Nha Trang city on June 9-10, 2006, with participation of His Excellency, Deputy Prime Minister Pham Gia Khiem and under the co-chairmanship of Mr. Vo Hong Phuc, Minister for Planning and Investment and Mr. Klaus Rohland, World Bank Country Director for Vietnam.
The Vietnamese delegation was led by His Excellency, Deputy Prime Minister Pham Gia Khiem and Mr. Vo Hong Phuc, Minister for Planning and Investment. It included among others: Mr. Nguyen Ngoc Tran, Vice Chairman, National Assembly’s External Relations Committee, Mr. Cao Viet Sinh, Vice Minister of Planning and Investment, Mr. Phung Khac Ke, Deputy Governor of the State Bank of Vietnam, Mr. Le Danh Vinh, Vice Minister of Trade, Mr. Pham Vu Luan, Vice Minister of Education and Training, Mr. Hoang The Lien, Vice Minister of Justice, Mr. Vu Van Ninh, Vice Minister of Finance, Mr. Tran Huu Thang, Vice Minister of Home Affairs, Mr. Ho Xuan Hung, Vice Chairman of National Steering Committee for Enterprise Reform and Development, Mr. Le Van Bang, Vice Minister of Foreign Affairs, Mr. Tran Doan Tho, Vice Minister of Transport, Ms. Nguyen Thi Xuyen, Vice Minister of Health, Mr. Pham Vu Quyet Thang, Deputy General Inspector of Government Inspection, Mr. Nguyen Quoc Huy, Vice Chairman of Office of Government. Provincial authority leaders attending the meeting include Mr. Mai Truc, Chairman of People Council of Khanh Hoa Province, Mr. Vo Lam Phi, Chairman of Khanh Hoa People’s Committee, Mr. Tran Phuong, Vice Chairman of Dak Nong People’s Committee, Mr. Pham The Dung, Chairman of Gia Lai People’s Committee, Mr. Nguyen Xuan Hue, Vice Chairman of Quang Ngai People’s Committee, Mr. Pham Ngoc Chi, Chairman of Phu Yen People’s Committee, Mr. Tran Minh Ca, Vice Chairman of Quang Nam People’s Committee, Mr. Vu Hoang Ha, Chairman of Binh Dinh People’s Committee, Mr. Nguyen Ngoc Thien, Vice Chairman of Thua Thien Hue People’s Committee, Mr. Tran Van Minh, Vice Chairman of Da Nang People’s Committee, Mr. Le Huu Thang, Vice Chairman of Quang Tri People’s Committee, Mr. Truong Van Thu, Vice Chairman of Lam Dong People’s Committee and Ms. Hoang Thi Ut Lan, Chairman of Ninh Thuan People’s Committees.
The meeting was attended by delegations from Australia, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Korea, Luxembourg, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, Thailand, the United Kingdom, the United States and the European Commission. Also attending were representatives from the World Bank, Asian Development Bank, International Finance Corporation, International Monetary Fund, the Food and Agriculture Organization, International Labor Organization, the United Nations Development Program, UNFPA, ,United Nations International Children’s Fund, United Nations Industrial Development Organization, UNODC and World Health Organization. International Non Governmental Organizations in Vietnam represented by Oxfam GB, Plan Vietnam, SNV Vietnam, and NGOResourceCenter; and the business community representative. Attending as observers were delegations from Brazil, South Africa
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