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Vietnam: Donors pledged over 8 billion USD in ODA, cautioned the government of challenges to sustainable development.

Available in: Tiếng việt

Contact: Ngan Hong Nguyen;
Email:
 nnguyen5@worldbank.org.
Tel: 39346600 ext.234

Hanoi, December 4, 2009 - The Government of Vietnam and Development Partners held the 16th Consultative Group Meeting on December 3-4, 2009. His Excellency Nguyen Tan Dung, Prime Minister of Vietnam attended meeting. Minister of Planning and Investment Vo Hong Phuc, and World Bank Country Director for Vietnam Victoria Kwakwa co-chaired the meeting.

At the meeting, Development Partners committed over US$ 8 billion in ODA to assist Vietnam in stabilizing the macro-economy, regaining growth and further reducing poverty. The Government of Vietnam and Development Partners discussed issues relating to securing macroeconomic stability, re-positioning the economy for growth in the post-crisis world, addressing the emerging challenges for poverty reduction, strengthening public administration and fighting corruption, and ensuring sustainable development. Vietnam’s Prime Minister H.E. Nguyen Tan Dung, in the first session, provided an overall assessment of Vietnam’s recent economic performance and social development, stressing the government’s flexible approach to macroeconomic management in the face of changing global circumstances. “The Vietnamese government has timely adjusted the overall target for 2009, shifting the priority from inflation control to prevention of economic slowdown and directed the comprehensive implementation of the solution packages to meet set targets.”

Development partners recognized and commended the Government for Vietnam’s recent achievements and reaffirmed their support to the country’s continued progress. They urged the Government to put the great potential of the whole of Vietnam society to use as a critical part of Vietnam’s ambition to become an industrialized country by 2020.

Positioning Vietnam for Growth in the Post – Crisis World

The participants discussed challenges to Vietnam’s macroeconomic stability, and heard from the government its plans for re-positioning Vietnam for sustainable growth, and on the road map for the reform of state owned enterprises. Delegates exchanged views on Vietnam’s stimulus package and the risks going forward, the impacts of the growth slowdown on the poor, and improving the investment climate. Development Partners suggested that the government seize the crisis as an opportunity to advance the reform agenda. They also mentioned several issues holding the key to sustainable future economic development, including education, training, social cohesion, gender balance, and addressing the impacts of climate change.

On behalf of Development Partners, ADB Country Director for Vietnam, Mr. Ayumi Konishi, congratulated the government for successfully managing adverse impact of the global economic crisis by implementing a stimulus program. “Yet, risks are growing and we appreciate the Government’s recognition that stabilization is the essential prerequisite for rapid and sustainable growth.”

International Monetary Fund’s Assistant Director of Asia Pacific Division, Mr. Shogo Ishii said: “The IMF welcomed the recent steps taken to address the emerging risks to macro-economic stability, but urge the authorities to remain vigilant to ensure these are overcome.”

Responding to the Development Partners’ remarks, the Prime Minister highlighted measures in six areas to ensure rapid and sustainable development. They include i) guaranteeing macroeconomic stability and preventing inflation, while addressing shortcomings in infrastructure and strengthening the quality of human resources, ii) developing social safety nets, with emphasis on health care services and the education system, gender balance, and combating human trafficking, iii) continuing anti-corruption efforts as an urgent mission for the Government of Vietnam, iv) fostering democracy and an open society that guarantees fundamental rights of all citizens according to Vietnam’s constitution and laws, v) implementing the action plan on climate change, and vi) enhancing the sustainability of Vietnam’s economy to achieve high growth, so that Vietnam will be an industrialized country by 2020.

Emerging challenges for poverty reduction

Development Partners and the Government recognized that economic development and poverty reduction are closely linked, and so far Vietnam’s strategies and plans have been successful on both fronts. The Development Partners heard the government’s proposals, including the adoption of a new poverty line, conducting stock-taking exercises on poverty reduction programs, developing policies that reflect the changing nature of poverty as Vietnam approaches Middle Income Status, developing the social protection system, and increasing social participation in poverty reduction efforts. The Development Partners emphasized the need to improve the overall coherence of poverty reduction and social protection programs and to strengthen coordination among the relevant government agencies.

Speaking on behalf of Development Partners, Fiona Lappin, Head of the UK’s Deparment for International Development in Vietnam stressed the importance to proactively adapt to a new socioeconomic environment so that no Vietnamese is left out of the process of growth and development. “We believe that, as the Vietnamese economy continues on a path of economic recovery, there continues to be a need for efficient welfare measures that help Vietnamese families through these difficult times. We need to think differently about how to address the emerging challenges of rising inequality, urban poverty and the working poor, especially ethnic minority that accompany middle income status.”

United Nations Resident Coordinator, Mr. Jesper Morch, reminded the meeting that “looking at poverty in terms of deprivation and not only in terms of income, we see that one of three children in Vietnam is poor in terms of being deprived of basis needs such as education, healthy sanitation or social inclusion or protection.” He added that “in this context, development partners welcomed the current efforts of the Government to reform its social protection system and encourage the Government to embrace dully a universal approach to social protection as a core development strategy.” 

Strengthening public administration and fighting corruption

Participants heard reports on the results of the Anti-Corruption Dialogue, held ahead of the CG meeting, which focused on the health sector in particular. Development Partners presented their experiences and recommendations, and exchanged views with the government on informal payments in the sector.

On behalf of the Development Partners, Swedish Ambassador Rolf Bergman stressed the need to involve the civil society in fighting corruption and improving the quality of public services. “In the fight against corruption, it is the joint efforts of everyone that will lead to success. It is not enough to only have good laws and decrees, but it is the combination of engagement of the Party, Government, Civil Society, media and each individual in the society that lead to results”

American Ambassador to Vietnam, Michael Michalak commenting on Vietnam’s public administrative reforms, said: “There is a pressing need to expand awareness, understanding and involvement of public, private sector and civil society organizations in Project 30 through outreach and public relations, and proactive engagement of key stakeholders. Strong leadership and political commitment will be even more critical during the review and simplification process.”

Climate Change and Sustainable Development

Development Partners and the government discussed the environmental aspects of industrialization and in particular the climate change agenda. They also reviewed the government’s policies for mitigation and adaptation to climate change, as well as coordination and management of external financial flows for climate change.

On behalf of Development Partners, the Danish Ambassador, Mr. Peter Lysholt Hansen, stressed the need to make “the National Target Programme to Respond to Climate Change operational as soon as possible. He also highlighted “the importance of ensuring effective coordination and management as additional international funding for climate change in Vietnam was expected.” He commended the Prime Minister for participating in the United Nations Climate Change Conference Copenhagen 2009 (COP 15).

Minister of Planning and Investment Vo Hong Phuc concluded the meeting by thanking the Development Partners for a record-high commitment to Vietnam’s development, in spite of the donors’ own difficulties. “We are committed to effectively use the funding, and closely monitor the implementation of donors’ money.”

In her closing remarks, the World Bank Country Director to Vietnam Victoria Kwakwa extended the Development Partners’ support to the country’s development process. “Development Partners stand ready to continue to provide support to Vietnam to consolidate earlier development progress and to confront the new challenges presented by entering middle income status.”

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