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Development aid increases
Viet Nam, on the brink of becoming a middle-income country and facing new development challenges, is getting better assistance from donors and development partners in the post-crisis period.
The Asian Development Bank, the second largest donor last year after the World Bank, yesterday, December 3, committed US$2 billion for Viet Nam, while the Japanese government made a donorship commitment of $1.6 billion. The WB last year pledged $1.66 billion while the ADB committed a sum of $1.56 billion, against $1.2 billion the previous year.
Despite successes in weathering the global economic turbulence this year, as praised by most aid-givers yesterday, December 3, at the opening of the annual 16th Consultative Group meeting in Ha Noi, the tasks for Viet Nam in 2010 were heavy and would be carried out amidst many difficulties and challenges, Prime Minister Nguyen Tan Dung told the conference in his opening speech.
"The global economy in 2010 still holds many difficulties, complicated and unpredictable developments, uncertainties and potential risks with weak signs of recovery, despite certain positive changes," said Dung while explaining new issues relating to Viet Nam's development.
In 2009, Viet Nam had made important strides, thus preventing the economic downturn, attaining a rather high growth of approximately 5.2 per cent, the Prime Minister said in a brief review on Viet Nam's achievements in the past year, as well as objectives and targets of the 5-year socio-economic development programme for the participants, who were representatives from the international community and relevant domestic ministries and sectors.
Donors supportive
"Viet Nam has avoided a recession in the context of a severe global financial and economic crisis," said World Bank country director for Viet Nam Victoria Kwakwa, who co-chairs the two-day meeting where the Vietnamese Government and its development partners discussed how to regain rapid and sustainable economic growth, with Minister of Planning and Investment Vo Hong Phuc. "This success is well recognised by development partners as well as by the broader global community."
"In general, donors are supportive of Viet Nam, as we all admire what has been done and respect very much the quality of the work," European Union Ambassador to Viet Nam Sean Doyle told reporters yesterday. "Viet Nam has reacted to the impact of the crisis better than any others, and managed the situation very well to overcome the recession in very good shape." This year's meeting was seen particularly important as it marked a new phase in the development of Viet Nam, which now stood at the threshold of middle-income country (MIC) status.
As a developing MIC, Viet Nam, in its new development strategy for 2011-20, was facing a lot of challenges, which included effective mobilisation and utilisation of domestic and external resources to meet increasing demands, as well as the need for stable socio-economic development. To overcome these challenges, Viet Nam will continue to mobilise official development assistance (ODA) in combination with other resources. Improving the effectiveness of the use of these resources, especially ODA, was the top priority of the Government and its development partners.
"Viet Nam has just begun to dabble in the MIC level, which sees the per-capita-income between $1,000-2,000 on average. Currently, the number is just slightly above $1,000 in Viet Nam," programme consultant from the Ministry of Planning and Investment Duong Duc Ung told reporters.
Viet Nam, with its new status, was starting to apply the new assistance system in which Viet Nam would not get "subsidies" from donors any more, he said.
"That means that Viet Nam will not just get soft loans like before, we will get less-favoured assistance and we will then have to consider what kind of assistance is suitable for our development process and how to use it effectively," said Ung.
Development partners are reformulating their priorities and strategies for development co- operation with Viet Nam in view of the country's nearing graduation to MIC status.
"Some European donors have said they would still give Viet Nam ODA in the next few years, as the country has been performing very well, with the Government applying proper policies to address current issues," Deputy Minister of Foreign Affairs Doan Xuan Hung told Viet Nam News. "They see Viet Nam as an example for all other developing countries to follow in weathering the recession, fighting against hunger and poverty, and especially using ODA effectively."
Trust restored
The previous CG meeting saw donor countries and international development organisations committing $5.01 billion (Excluding Japan) in aid to further assist the country' development process and ensure equitable and inclusive youth amid the strong impact of the global economic downturn.
Last year's CG meeting was held amidst the outbreak of a corruption scandal related to a Japanese-funded infrastructure project, which saw Japanese aid halted. But Japan, one of Viet Nam's biggest aid-givers, officially resumed ODA lending to Viet Nam in October this year, signing a diplomatic note to lend more than $700 million for five projects.
"The total ODA amount for this fiscal year, ending next March, is $1.6 billion," Japanese Ambassador to Viet Nam Mitsuo Sakaba told reporters, adding that almost half would go to transportation and infrastructure projects.
The ambassador praised the effectiveness of ODA use in Viet Nam. "So far we have good quotes by the Vietnamese Government for implementation of Japanese ODA," said Sakaba.
"The Japanese Government and public are seeing that our ODA has had a very special in pact on the socio-economic development in the country, with Japanese visitors and parliamentarians having seen with the own eyes how things are being implemented here," he added.
The ambassador, however voiced concerns over the delays of Japanese-funded projects, mainly because of slow ground clearance processes. He said other reasons for delays were administrative procedure and high inflation rates.
Administrative reform was among the main topics discussed at the meeting, which focused on issues that were quite practical and useful for Viet Nam, such as the assessment of the situation and the maintenance of macro-economic stability, sustainable poverty reduction, anti-corruption and climate change.
Viet Nam has been applying project that will reduce regulatory burdens that citizens and business face when implementing administrative procedures. Project 30 was making public and transparent administrative procedures and helping reduce 30 per cent of social costs in administrative procedure compliance.
Climate change was another major topic to be discussed at the meeting amid the forecast that Viet Nam would be among the worst affected countries from rising sea levels.
"Viet Nam has developed an action plan to respond to this threat and looks forward to practical assistance from donors, said PM Dung. The PM will take part in the World Climate Conference in Denmark, next week.
VietNamNet, VietNamNews
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