Donors commit over US$5 bln in aid for Vietnam

The two-day Consultative Group (CG) Meeting 2008 for Vietnam ended Friday, with donors committing US$5.014 billion in aid next year to further assist the country’ development process and ensure equitable and inclusive growth.

Vietnamese Prime Minister Nguyen Tan Dung (C) listens to speakers at the CG meeting on Dec. 4 (AFP PHOTO)

During the meeting in Ha Noi, the Government of Vietnam and the development partners discussed in depth the economic situation, the Government’s recent policy response, poverty reduction and health programs, the harmonization and aid effectiveness agenda, the fight against corruption and institutional reform, and climate change issues.

Attending the first morning of the meeting, Vietnamese Prime Minister Nguyen Tan Dung reviewed developments of the past year, and informed donors of the Government’s main measures to tackle the global financial crisis, stressing that the government will resolutely implement solutions set to ensure stability and economic activity.

He emphasized the need for strong cooperation between donors and the government to overcome the crisis. “The financial crisis and global economic downturn are affecting economies all over the world. The tasks for Vietnam in 2009 will be very challenging. The Government and people of Vietnam appreciate the support from the international community as it addresses macroeconomic stability while sustaining its reform agenda.” 

Socio-economic situation and Vietnam’s response

Development partners recognized Vietnam’s impressive recent success at reducing high domestic inflation and containing credit expansion, as well as in addressing the global food and fuel crisis earlier this year. They expressed support for the recent proposals to stimulate growth in response to the international credit crisis, but urged the government to respond flexibly as circumstances change.

They also emphasized the need to continue economic reforms, particularly to address the weaknesses exposed by the macro-economic turbulence of early 2008. They also noted that amidst these crises, special attention should be paid to the poor and vulnerable people to make sure they are not left behind.

Mr. Shogo Ishii, assistant director, Asia Pacific Department of the International Monetary Fund, said “Despite the economic challenges of this year and a difficult year ahead, the medium term outlook for Vietnam remains favorable, provided that the government sustains the momentum of economic reforms that have brought so much success this decade.”

“The government needs to be cautious in setting objectives for 2009, especially for growth and investment. It is also equally important to design appropriate economic policies that balance the growth and external risks confronting Vietnam, safeguard institutions, improve data quality and communication, and accelerate structural reforms,” he added.

Mr. Ayumi Konishi, the country director of the Asian Development Bank in Vietnam, congratulated the Vietnamese Government for effectively managed macro economic difficulties this year.

“But given the global economic downturn, 2009 will not be easier. We hope the Government will closely monitor the situation, and carefully analyze and balance various risks. We are particularly concerned about the possible adverse impacts on the poor, small and medium enterprises and the vulnerable people.”

Mr. Konishi added, “Together with other development partners, we would like to provide strong support to the Government in responding to the emerging situation. We will stand ready to do whatever we can to help Vietnam maintain critical development expenditures.”

Delivering the statement on behalf of the European Union, Mr. Hervé Bolot, Ambassador of France acknowledged the challenges for Vietnam, and emphasized EU’s continuing support, saying that “the European Union remains firmly committed to its partnership with Vietnam as a long term partner and friend, through times of turbulence as well as those of prosperity.”

“Our recently-opened negotiations on a new and ambitious Partnership Cooperation Agreement are both proof of this, and also an effective framework for expanding and deepening the partnership together,” said the French Ambassador.

Mr. John Hendra, UN resident coordinator in Vietnam, said, “While it is important to safeguard Vietnam’s economic progress, from a UN perspective, it is also vital that priority continues to be given to addressing the negative impact the current situation is having on the poor.”

“This will be critical to ensuring that those Vietnamese families that have left poverty do not fall back into it,” he said.

Meanwhile, the Head of the UK’s Department for International Development in Vietnam, Ms. Fiona Lappin, reminded participants of continuing the fight against entrenched poverty in the ethnic minority groups, new urban poor and landless farmers.

She said, “Development partners commend the Government’s commitment to keep poverty reduction at the heart of its socio-economic policy, and it is particularly important in times of global economic turmoil to protect social sector spending under the 2009 state budget.”

To advance the fight against poverty, Ms Fiona Lappin said, “We urge the government to use information more effectively to inform policy making, deliver more unified and cost effective local programs based on past experience, and strengthening safety nets and social protection.”

Speaking on behalf of the Group of four Ambassadors of Canada, Norway, Switzerland and New Zealand, the Ambassador of New Zealand, Mr. James Kember said, “While there are signs of commendable progress in government-mandated programs to improve education, health care, infrastructure, and the position of ethnic minorities, considerable challenges remain to ensure ethnic communities benefit fully from growth.”

He emphasized that “in our view, ethnic minority groups must be part of the economic solutions for the Central Highlands” and urged “the government to intensify efforts to this end.”
The challenges and opportunities in health finance reform were also discussed by participants, who noted that spending in health represents a good investment, and called on rapid expansion of health insurance in the country.

Harmonization and Aid Effectiveness

Partners applauded the rapid adoption of the Accra Agenda of Action by the Vietnamese authorities. During the meeting, the findings of a recent monitoring review of the implementation of the Hanoi Core Statement were shared with participants. The review noted that there was still a need to ensure broader ownership by line ministries and provincial governments of the aid effectiveness agenda. The report also encouraged donors to make greater use of Vietnam’s own country systems, and called on the Government to ensure a greater role for civil society in ensuring the monitoring of aid efforts.

Governance and institutional reform

The Government and donors reviewed the progress made in the fight against corruption and in public administration reform. They agreed a continued dialogue is needed in relation to the role of the media in fighting corruption.

Mr. Mitsuo Sakaba, Ambassador of Japan said, “It is encouraging to see the leaders of the Vietnamese government repeatedly express their strong determination to combat corruption, and Japan would like to urge the Vietnamese government to make continuous efforts to prevent the recurrence of corruption.”

The CG meeting also discussed climate change. 

In his closing remarks, the Vice President of the World Bank in East Asia and Pacific, Mr. James Adams, congratulated the Government of Vietnam for overcoming the various economic challenges of 2008.

He said, “2009 will bring about new and more difficult challenges. But the meeting clearly concluded that Government will be sustaining its efforts at economic and social reforms and that as a result, Vietnam can count on the donor community for continued support.”

Vietnamese Minister of Planning and Investment Vo Hong Phuc, in his final speech, thanked the participants for the frank and constructive dialogue.

“The Government of Vietnam has mapped out various solutions to address the current economic crisis, to stabilize the economy and maintain its growth potential, as well as helping the poor people to overcome the difficulties brought about by the new economic challenges.”

Mr. Phuc added, “The Government is also committed to step up the fight against corruption, in order to ensure that Government and donor have a maximum impact on development efforts."

Sources: World Bank, local media; combined by Tuong Thuy

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