by Trinh Anh Duc
19-12-2002
Efficiency and competitiveness of the national economy, human development and administrative reform with the aim of ensuring the country's sustainable development were high on the agenda of the Consultative Group Meeting in Ha Noi in which the donors' community pledged a total aid of 2.5 billion USD for Viet Nam in 2003, an increase of 4.5 percent over 2002. The December 10-11, 2002 meeting also discussed the implementation of comprehensive strategies to deal with hunger, and poverty for development, the establishment of a suitable public investment programme and the efficiency of official development assistance (ODA) capital.
Opening the meeting on December 10, Deputy Prime Minister Vu Khoan thanked the Government, multilateral donors and international non-governmental organisations for their valuable cooperation with and assistance to Viet Nam's renewal process over recent years.
The Deputy PM stressed ,"In addition to mobilising internal sources, the Vietnamese Government always attaches importance to ODA sources for national socio-economic development. Over the past 10 years, ODA sources have made considerable contributions to improving infrastructure as well as institutional and human development," and settling a number of social problems.
Khoan expressed his hope that international donors would continue to increase the amount of development aid for Viet Nam, focusing primarily on developing socio-economic infrastructure, institutional capacity and human resources, raising the competitive edge of the national economy in its process of regional and global integration, and environmental protection.
"Now as before, the Vietnamese Government has placed importance on utilising ODA sources effectively," the Deputy PM underlined, adding, "By doing so, joint efforts aimed at bolstering partnerships and harmonizing procedures should be continued in regard to each donor's specific requirements." Donors had between 1993 and 2001 pledged 20 billion USD for Viet Nam.
Donors pledge 2.5 billion USD for Vietnam
The donors' community pledged a total aid of 2.5 billion USD for Viet Nam in 2003, an increase of 4.5 percent over 2002. This was revealed by Minister of Planning and Investment Vo Hong Phuc with the press after the 10th Consultative Group Meeting.
"Leading donors include Japan, the World Bank, the European Union, and the Asia Development Bank," he added.
Although the world economy was still beset with difficulties and many donor countries were in the doldrums and donors including Japan had reduced ODA for foreign countries, they pledged to increase aid for Viet Nam, Phuc pointed out.
"The Vietnamese Government highly values this pledge," he stated, stressing that it indicated the donors' strong support for Viet Nam's policy of renewal.
At the December 10-11 meeting, delegates urged Viet Nam to better implement the Comprehensive Strategy on Hunger Elimination, Poverty Reduction and Sustainable Development, emphasizing the need to accelerate the process of reform for the goals of strengthened competition, establishment of a public administration, and benefits for the poor during the development process. They called on Viet Nam to continue with its improvement of the business environment by exerting efforts to further bolster competition in pivotal industries, reduce business expenses to be on par with the regional level, accelerate reforms of the finance-banking system and State-owned system and boost the development of the private economic sector.
The donors and Viet Nam also made progress in discussing ways to ameliorate ODA management and use ODA sources. However, the donors urged Viet Nam to make more efforts in quickening the ODA disbursement, especially by giving more power to local authorities.
PM thanks for donors' assistance to Vietnam
Prime Minister Phan Van Khai praised the donors' assistance to Vietnam over the previous ten years, which, he said, had made practical and effective contributions to Vietnam's national renovation process and economic development, especially to personnel training, infrastructure construction, and poverty reduction. He was speaking at a reception in honour of the heads of 47 delegations from foreign countries, international organisations, governmental and non-governmental organisations to the Consultative Group Meeting in Hanoi on December 11, the closing day of the meeting of the Consultative Group on Vietnam.
He stressed that the international assistance had in recent time made a significant contribution to the economic development of Vietnam, concerning the GDP growth from 7% to 8%. Prime Minister Phan Van Khai said he hoped that the donors would provide further support to help improve the quality of economic development in Vietnam.
The guests valued highly Vietnam's economic growth over the past years and urged Vietnam to accelerate the economy's efficiency and competitiveness for rapid and sustainable development. They were interested in Vietnam's implementation of the Comprehensive Strategy to deal with Hunger and Poverty for Development and the Public Investment Programme and effective use of Official Development Assistance sources.
Vietnam - delivering its promise: WB, ADB
Vietnam's strong economic growth was associated with an external debt at a very manageable level, stated the World Bank (WB) and the Asian Development Bank (ADB) said in a report delivered at the annual Consultative Group Meeting of international donors held in Hanoi on December 10-11.
The report said:
"After a slowing down period during the East Asian crisis, Vietnam is again growing rapidly. This improvement is partly due to a series of policy measures that put the economy on an enhanced medium-term growth path. Confidence in the private sector was boosted by the adoption of a detailed reform programme in 2001. New private businesses are currently being established at a rate of 1,600 per month, and in early 2002 a special meeting of the Party Central Committee gave the strongest endorsement of the private sector ever. Investors are reacting positively to the reform announcements and commitments made by Vietnam. The country is getting better grades from sovereign risk rating agencies and the macroeconomic situation is stable. Despite an unfavourable external environment, in terms of demand and prices, exports can be expected to pick up as a result of trade liberalisation efforts, including the Vietnam-US Bilateral Trade Agreement.
"This favourable outlook, combined with Vietnam's remarkable long-term growth potential, suggests that the effects of the East Asian crisis are over. A period of high GDP growth rates, possibly in the order of 7% per year, is likely. As in the 1990s, Vietnam could be entering a phase of prosperity. This upbeat assessment of the macroeconomic prospects should not lead to complacency, however. During the previous phase of rapid growth, a key question was whether Vietnam would become a market economy. Today, the question is rather what kind of market economy? Also, the previous phase of rapid growth was characterised by a dramatic reduction in poverty. The poor represented 37% of the population in 1998, compared to 58% five years earlier. The question today is: will this new phase of rapid growth be as pro-poor as the previous one?
"Vietnam is committed to socially inclusive development. The recently completed Comprehensive Poverty Reduction and Growth Strategy (CPRGS) translates a vision of transition towards a market economy with socialist orientation into concrete public action. It aims at full openness to the global economy over the coming decade, and the creation of a level playing field between the public and the private sectors. It emphasises that the transition should be pro-poor and notes that this will require heavier investment in rural and lagging regions and a more gradual reform implementation than is often recommended by international advisors. It gives strong emphasis to poverty reduction and social equity, and to a more modern system of governance. The CPRGS is a product of the government of Vietnam, involving all of the relevant agencies and sectors in its preparation. Such ownership and determination are very good augurs."
After analysing the three important challenges faced by Vietnam in the coming period - to further progress in economic reform, poverty alleviation, and to improve the quality of its governance, the report stresses "The Vietnam Development Goals are ambitious, but attainable."
Vietnam should focus on quality of ODA: ADB country director
"Vietnam should focus on quality of ODA," said Country Director of the Asian Development Bank (ADB) John Samy on December 11.
"Efficiency and implementation of ODA are extremely important for Vietnam," he said, adding that "Vietnam at least for now still substantially needs ODA support. The donors are very positive, but Vietnam has to deliver. It (Vietnam) has to use those resources at the best possible rate."
About the institution's commitment at the two-day Consultative Group (CG) meeting, the banking official said ADB was the third largest donor, committing at least US $300 million. The institution is planning to focus its future ODA on the economic production sector, agriculture and reform in the agriculture sector, Mr Samy underlined. The bank would continue supporting the poor people's access to credit, public administration reform, legal system development, and power distribution in Vietnam in coming years, he said.
On the disbursement of ODA, he pointed out that there still remained many delays in processing procedures within the government, urging more effort in strengthening capacity, including skill and institution, advancing administration, and empowering ministers and ministries as part of the endeavour to harmonise the procedures for ODA disbursement between donors and the Vietnamese government.
"There are some areas in which these procedures of the Vietnamese government and those of individual donor are not in harmony," he emphasised.
Accordingly, the institution has had bilateral discussions with the Vietnamese Ministry of Planning and Investment and other governmental agencies to look at their joint programmes and operations in the government's procedures and policy and work within those in order to increase their efficiency, Mr Samy said.
In another effort, ADB and the Japan Bank for International Co-operation (JBIC) and the World Bank (WB) have been doing a Joint Portfolio Review to find out their shared problems pertaining to procedures with the aim of resolving them. Simplification of procedures for ODA disbursement would make the whole process more efficient, the banking official underscored.
The ADB had so far financed 28 projects worth US $1.7 billion in Vietnam. The regional bank said it would lend Vietnam US $945 million in the 2002-2005 period to help it maintain sustainable economic growth as well as reduce poverty further.