Donors Help Vietnam Enhance ODA Use, Poverty Reduction

Donors Help Vietnam Enhance ODA Use, Poverty Reduction

Representatives from the Vietnamese Government, 22 donor countries, 13 international agencies, 4 international NGOs and the private sector gathered for the informal mid-year Consultative Group (CG) meeting held in Vinh City, central Nghe An province on June 16-17, 2004 organised by the Ministry of Planning and Investment and the World Bank (WB)

The meeting focused on Vietnam's economic situation for the first six months of this year, measures to improve the effectiveness of Official Development Assistance (ODA) and the integratation of the Government's Comprehensive Poverty Reduction and Growth Strategy (CPRGS) process with Vietnam's five-year development plan.

Deputy Prime Minister Vu Khoan opened the meeting by reviewing the Vietnamese economy. "As we step up our negotiations for WTO membership, we continue with our institutional building and economic restructuring, while on the negotiation table we have put forward a strong new offer. In this process, we look forward to receiving the continued support and assistance of the international community, with special attention paid to assisting businesses in the "post-WTO" period as Vietnam delivers its WTO commitments," said Mr. Khoan.

Development counselors and high-level officials on June 16 held technical discussions on the effectiveness of ODA and the integration of the CPRGS process with Vietnam's five-year plan, sector strategies, annual budgets, and the Public Investment Program (PIP). The government presented a joint government-donor progress report on harmonisation efforts, which would help improve the effectiveness of ODA. In four parallel subsections on human development, infrastructure, rural development, and public administration reforms, donors and the government held the first round of technical discussions on how to better contribute to the government's targets for economic growth and poverty reduction.

Delegates congratulated the government on its achievements in improving aid effectiveness, and its ambitious vision for the future. "The progress over the last 6 months clearly shows Vietnam's dedication in engaging with partners in the donor community to increase aid effectiveness, and to move from general statements of intent to concrete practical steps. As we continue exploring new aid modalities, with more comprehensive, sector-wide approaches, it will be essential to increase our focus on strengthening the government's own systems of public service delivery", Bella Bird, Head of Office of DFID in Vietnam, said.

Mr Klaus Rohland, WB Director for Vietnam, summed up the key outcomes of the meeting. "Vietnam's achievements in poverty reduction and economic growth are world-renowned. The donor community at large has aligned its assistance with Vietnam's CPRGS in response to its strong national ownership. Yet, this is not the time for complacency. The partnership between the government of Vietnam and the donor community is a process that needs to be continuously nurtured in consultation with all stakeholders. We need to lift our game, harmonise our processes and finally align them to government systems that meet international standards. Donors are ready to work with the government in its preparatory work for the next five-year plan from 2006-2010. The CPRGS objectives are expected to be integrated into the plan and form its strategic underpinnings," concluded Mr. Rohland. 

In his closing remarks, Planning and Investment Minister Vo Hong Phuc underlined Vietnam's commitment to work with donors to improve the effectiveness of aid. "The rich and engaged discussions at this meeting have clearly demonstrated the desire from both sides to work harder to increase aid effectiveness, accelerate ODA disbursements and integrate the CPRGS approach in Vietnam's development planning," Minister Phuc said.

Government and donors agreed on a Harmonisation Action Plan for 2004 to Improve Aid Effectiveness based on key principles of Government Ownership, Alignment of Donor Support and Streamlining of Processes. The delegates also adopted the design of a Comprehensive Capacity Building Program for ODA management, with commitments from Japan, the WB and the Like-Minded Donor Group of around US$4 million to support implementation of this programme.

The UNICEF Representative for Vietnam, Mr Anthony Bloomberg, congratulated the Government for its strong commitment to achieving the Millennium Development Goals (MDGs). "As Vietnam seeks to continue its impressive poverty reduction record, increased focus should be put on the quality of growth. Significant social and regional disparities remain, with the Northern Uplands and the Central Highlands falling behind the rest of the country. Addressing social disparities requires local level targeted action and local capacity building, including more participation of people in their own development." said Mr Bloomberg.

Delegates finally agreed to meet in December at the formal Consultative Group Meeting in Hanoi.

• Nhat Minh