Viet Nam Consultative Forum Informal Mid-Year Review, 13-15 June 1999


Hai Phong. Government and ODA donors gathered for a three-day meeting in Hai Phong on 13-15 June. The purpose of the mid-year review by the Consultative Group was partly to review the follow-up to the policy and implementation resolutions and commitments made by the Government and the donor community at the annual Consultative Group forum, held in December last year in Paris. The meeting was also an opportunity for donors and the Government to continue their policy and ODA partnership dialogue in an informal setting.

The UN system used the forum as an opportunity to stress that the crucial issue of the quality of aid should not be obscured by the drive to maintain the quantity of aid for Viet Nam. Emphasis was also laid on the need for the ODA community to work with the Government to further build institutional and human capacity to ensure that investments made produced sustainable results which would be nationally led and maintained.

Attached is a summary of the main issues the UN system raised at the Viet Nam Consultative Group Forum Informal Mid-year Review.


Following many years of sustained high donor pledges of assistance to Viet Nam, the UN finds that there is a need for both the Government and the ODA donor community at large to focus further on the quality of aid, and not just the quantity. In this regard, the UN system considers the following issues to be of key importance to improving the quality and effectiveness of ODA:

Supporting national strategic planning

In preparing for Viet Nam's long-term development, the Party and the Government are now reviewing the country's socio-economic prospects. A new socio-economic development strategy for the nation up to 2010, and a longer term vision to 2020 are being prepared.

The months to come represent a unique opportunity for the Government and the donor community to further develop a dialogue and a shared vision for the future. Specifically, existing working groups and those now being established by the Government provide excellent fora for ensuring that lessons learned are taken into consideration. There are lessons to be learned, for example, from the ongoing regional crisis on issues such as international economic integration, development financing and governance.

It is increasingly essential that the Government considers the implications of these lessons and maintains its momentum on reform. It is essential both for Viet Nam's development prospects and for providing the enabling environment that will maximise the benefits Viet Nam can reap from ODA as well as private foreign investments. There is a strong linkage, in terms of quality and effectiveness, between productive ODA investments and reform. It is critically important, in our view, that investments and programmes are made and carried out in an environment that enables ODA to genuinely contribute to building national capacity and sustainable revenues, and which facilitates further reform. This includes the promotion of a dynamic non-state sector, export development and SOE and financial sector reform.

Promoting partnerships

Developing a shared vision for the future will only happen through efficient coordination of donor resources and strong partnerships. In this respect, the UN welcomes the recent moves towards greater collaboration at the programme level, such as the 1,715 Poorest Communes Programme, as well as more comprehensive joint analysis of individual sectors through working groups and sector reviews.

The Partnership Workshop in April was a valuable step towards a more effective and transparent government-donor partnership. At the Mid-Year CG, the UN hopes to receive the Government's final report and detailed Action Plan on future partnerships. These partnerships are a useful first step in improving coordination particularly for multi-sector, inter-ministerial programmes. A case in point is work in the field of poverty, where MPI, MOLISA, MARD and CEMMA all play important roles. A strong partnership is needed in this area to ensure effective coordination and clear division of responsibilities. In other cases, such as the forestry sector, we still await more concrete outcomes from the partnership dialogue.

On the donor side, everyone is increasingly conscious of the need for better, results-oriented and more productive partnerships to ensure quality and "strategic" aid. Partnerships is an area in which collectively we can do better. Having said this, the Government we serve should be fully leading these partnerships and "own" them at all levels.

Strengthening capacity building

If we are to see ODA contribute to sustainable investments that will benefit Viet Nam in the long term, one area that the Government and donor community can not afford to neglect is the need to strengthen human and institutional capacities.

In many cases, both from the Government and ODA side, it seems that the need to accompany physical investment-particularly in rural areas-with significant efforts and resources to build up the capacity of institutions and of people is not being sufficiently addressed. This is a key point: no investment will be sustainable without investing heavily-and often beforehand-both in training of people and in improvements of the institutions targeted. This leads to the clear need to better link-up the capital and technical assistance inputs of ODA. Parallel or joint funding should be the rule of the game.

In the opinion of the UN, a number of critical issues still need to be resolved at the macro-level to strengthen the capacity for poverty reduction, a key one being improving the capacity within MARD and related agencies to conduct policy analysis and research-based policy formulation.

Strengthening Public Administration Reform (PAR)

One area in which the donor community can assist the Government in further building capacity is the country's public administration system. Effective public-sector management is crucial to meet the challenges of globalisation and increased economic integration. Of course, public administration reform has to be pursued in the context of the Vietnamese society, taking into account its history, social values and goals, but its importance can not be neglected. After all, the role of the public sector is critical in poverty reduction efforts.

Since 1995, a number of PAR achievements have been made, including:

Despite the achievements made so far, there are still issues that need to be addressed, including:

Without a comprehensive PAR strategy it is difficult to ensure that ODA interventions will be both effectively targeted and complementary. The time is opportune for the donor community to take a further step in assisting the Government to continue its public administration reform as an essential component of the doi moi process.

Improving the quality of poverty reduction programmes

Despite the great strides that have been made in poverty reduction over the past ten years, rural areas-where 90% of the poor live-remain at a disadvantage compared to urban areas. Average rural per capita incomes are only around US$140 a year; access to basic social services is unequal and the quality is lower; the number of landless people is increasing; and under-employment has risen to about 25-30% of the total rural workforce. Strengthening capacity to address these problems goes beyond infrastructure provision and into such governance issues as land ownership, the banking system and the role of private, off-farm industries. Together these constitute decisive factors for rapid and equitable development of the rural areas.

Economic growth is essential for reducing poverty. But at the same time, it is essential to continue to invest in human development through the provision of good quality basic social services-particularly education, health and nutrition, water and sanitation. We therefore urge the Government and the donor community to pursue the 20/20 initiative to ensure that funding of basic social services is not reduced, despite the current slowdown in economic growth. Universal access to basic social services should not be considered just as a vital safety net for the poorest, but as a prerequisite for promoting people-centred development. Apart from the traditional vulnerable groups (such as war invalids, disabled, elderly, orphans) currently covered by social security, the urban unemployed and the rural poor should also be target groups of social safety nets. Social safety nets should include short-term measures (such as emergency relief) and a long-term strategy to invest in nutrition, primary health care and basic education for the poor.

To ensure the quality and appropriateness of programmes and strategies for poverty reduction in rural areas, they need to apply a holistic, integrated approach to rural development. Interventions and strategies must be based on participatory approaches, taking into account the needs of both men and women. In the past such strategies have largely been designed by men with little consultation of women. This needs to be changed so that women, especially those from vulnerable groups, are consulted and develop their capacity to participate in the formulation of such strategies.

The 1,715 Poorest Communes Programme is proving to be innovative in this respect.

Improving availability and quality of information

There is a need for better and more accurate data on which to base policy and programme formulation. Viet Nam's information deficit is still a major issue.

One vital exercise in data collection was the second Viet Nam Living Standards Survey, which by the end of this year will reveal important trends in poverty.

Another important information gap has been filled by the recent Population and Housing Census which provides crucial information on, among others, population distribution and migration patterns. According to preliminary findings of this census, it appears that Viet Nam's population growth has been lower than expected. This is partly thanks to the effort of the Viet Nam National Committee for Population and Family Planning, which was presented with the 1999 UN Population Award in New York last week by UN Secretary-General Kofi Annan. However, the rate of abortion in Viet Nam continues to be the highest in the world at approximately 2.5 per woman. This is an issue that urgently needs to be addressed.

Also regarding population statistics, improvements are needed in the civil registration system. The current system involves too many government agencies (assisted by too many different donors) collecting similar data, which often results in overlap, duplication and even conflicting and unreliable data.

In collaboration with the Government, the UN system is currently preparing a Common Country Assessment (CCA) of Viet Nam. This situation analysis is being jointly prepared by all UN agencies and covers issues such as poverty, governance, health and environment. The CCA will guide future UN assistance to Viet Nam and should be a useful programming tool for other organisations.

The recent publication of the Government budget will obviously be a key step in improving data availability for policy formulation, business planning and ODA programming purposes.