Delegates support accelerated reforms to help Vn achieve ambitious pro-poor growth targets
HANOI - At the conclusion of the Eleventh Consultative Group
(CG) Meeting on Vietnam, chaired by the Government of Vietnam and the World
Bank, donors expressed continued support to the implementation of Vietnam's
Comprehensive Poverty Reduction and Growth Strategy (CPRGS) and welcomed the
Government's first CPRGS progress report. Delegates emphasized the need to
accelerate implementation of reforms for Vietnam to reach its full potential and
continue to reduce poverty at a rapid pace. In support of this commitment,
donors pledged US$ 2.8 billion in assistance for the coming year. In a special
session on HIV/AIDS, delegates welcomed the Government's efforts to combat this
accelerating epidemic and strongly urged the government to further strengthen
and speed up its policy response.
At the meeting, Government officials, members of the donor community, and
representatives from civil society, the National Assembly, and the private
sector gathered to assess Vietnam's progress since last year's meeting of the
Consultative Group.
"Since the first Consultative Group meeting on Vietnam, held in 1993 in Paris,
Vietnam has recorded important achievements, through our own efforts and with
valuable assistance from the donor community. However, greater efforts are
needed to achieve the goals set for the 2001-2005 period. The Government is
committed to improving the competitiveness of the economy and to step up the doi
moi process to prepare for WTO-accession by 2005. It is our policy to "walk on
two feet": speed up SOE reform to improve efficiency and adopt new policies and
mechanisms to encourage and create favorable conditions for the development of
private enterprises in particular their access to capital and land. At the same
time we will continue to pursue our priority of human resource development and
poverty reduction." Deputy Prime Minister H.E. Mr. Vu Khoan said in his opening
remarks.
Meeting Vietnam's social and economic targets and implementing the CPRGS
The CG meeting opened with a discussion of recent progress in reaching Vietnam's
social and economic targets for the 2001-2005 and in fulfilling the CPRGS
objectives. The Government also presented its first progress report of the
CPRGS, and its extension to include the impact of large-scale infrastructure on
growth and poverty reduction.
Meeting Co-Chair, H.E. Mr. Vo Hong Phuc, Minister for Planning and Investment,
stated "Vietnam has made significant advances in fulfilling its socio-economic
targets of the 2001-2005 period. Encouraging achievements have been recorded in
poverty reduction. All sectors and localities have effectively implemented
poverty reduction measures. The CPRGS has been integrated with the National
Targets Program at the local level to increase participation in poverty
alleviation activities. The Health Care Fund for the Poor and the Education
Assistance Fund for Poor Children have been established. To reach our full
potential, we will continue to improve the business climate and enhance the
economy's competitiveness by maintaining a stable macroeconomic framework,
establishing and strengthening market regulating institutions."
Donors complemented the Government for the recent achievements in economic
growth and poverty reduction and its decisive response to the SARS outbreak.
Donors also complemented the Government for its strong ownership of the CPRGS.
"After ten years of successful development cooperation in Vietnam, we could be
tempted to be complacent and congratulate ourselves for Vietnam's fantastic
achievements. However, today is also year one after the Government's clear
intention to join the WTO by 2005. Meeting this ambitious goal will contribute
to implementing Vietnam's Comprehensive Poverty Reduction and Growth Strategy
(CPRGS) successfully. At the same time, high economic growth will not be enough
to eradicate poverty in Vietnam. The challenge is to share the benefits of high
growth among all regions, and among all groups of the population" said Mr. Klaus
Rohland, World Bank Country Director for Vietnam and Co-Chair of the CG.
Donors offered support to address growing inequalities driven by ethnicity,
location and gender. Poverty reduction has been much slower in certain parts of
the country ? particularly in the central highlands ? and donors offered support
in addressing these imbalances and also on the issue of rural/urban migration.
Delegates emphasized the need to accelerate implementation of reforms to ensure
continued rapid poverty reduction. They also agreed that the inclusion of
large-scale infrastructure in the CPRGS was an important step towards ensuring
better prioritization of public investment projects.
H.E., Mr. Mitsuru Kitano, Minister, Japanese Embassy in Hanoi, noted: "
Strengthening Vietnam's engine of growth remains high on our agenda. However,
the quality and sustainability of growth must be kept in mind. We have to pay
attention to the growing inequalities as highlighted in the Vietnam Development
Report 2004. The question of how we bring the benefits of growth to the poor is
becoming still more important. In this context we would like to congratulate the
Government with the progress made in implementing the CPRGS and with the
inclusion of large-scale infrastructure in the CPRGS, which makes the CPRGS more
comprehensive and balanced. At the same time, risks against a sound development
should be taken care of. We encourage the Government to push forward reforms,
including SOE reform, and strengthen efforts to improve resource allocation
through the appropriate formulation of the Public Investment Program,
elaboration of selection criteria, and better coordination between capital and
recurrent budgets. "
Mr. Sean Nolan, Chief of Mission for Vietnam, IMF, added "As gate keepers of
large volumes of investment resources, it is imperative that the State-owned
banks and the Development Assistance Fund conduct effective appraisal and
financial assessment of the projects to which they commit resources."
Enterprises ? competitiveness and effectiveness in the Vietnamese Economy
Delegates discussed a Government report on lessons and experience with four
years of implementing the Enterprise Law. Donors acknowledged the positive
effects of reforms, clearly visible in the success of the enterprise law, the
decree on business associations, and the establishment of the agency for SME
development. Delegates agreed on the need for further reforms to level the
playing field for all enterprises in Vietnam.
"The continuing large scale of the state-owned sector means that further SOE
reform and equitization is essential if the full potential of the private sector
for taking a leading role in economic growth and poverty reduction is to be
realized. A single unified corporate governance framework for all businesses
operating in Vietnam needs to be established" said Mr. Lothar Zimmer, Head of
the German Delegation, Federal Ministry for Cooperation, on behalf of the
like-minded donor group.
As part of the CG process, the Vietnam Business Forum was held Monday this week
between representatives of the business community and the Government.
Representatives of the Business Forum reported that the Business Outlook
continues to improve with most members expecting to expand their activities in
the coming years. At the same time the business community urged the Government
to maintain the momentum of reform.
On behalf of the Vietnam Business Forum Mr. Deepak Khanna, Country Manager,
International Finance Corporation, commented, "The Business Forum has helped
establish confidence and trust between Government and the business community. At
the Forum, there was general acknowledgement that the Government of Vietnam is
making positive efforts to improve the business environment. Compared to
previous years, a higher proportion of issues of concern for businesses are
being solved and additional issues are under active consideration."
HIV/AIDS
In a special session reserved to discuss the emerging social and economic
challenges posed by HIV/AIDS, delegates welcomed the Government's recent efforts
to combat the accelerating epidemic and called for strong leadership by top
levels of Government to further strengthen and accelerate its policy response to
prevent the devastating effects of HIV/AIDS seen in other developing countries.
Delegates agreed that the changing character of the HIV/AIDS epidemic requires
urgent coordination, and scaled-up efforts across sectors and in a
location-specific context. Donors signaled their willingness to commit
significant resources in this regard and urged Government to improve its
implementation capacity sufficiently. Donors emphasized the need to recognize
and communicate to the public that HIV/AIDS is a social problem that transcends
all previous national challenges and requires a commensurate response.
"Much greater emphasis is needed on quality, equity and sustainability of
development in Vietnam. Regarding HIV/AIDS, the signs are ominous: Vietnam's
HIV/AIDS epidemic is set to explode. Timely action is needed if Vietnam is to
avoid the social and economic consequences of the epidemic. Now is the time for
leadership to end stigma and discrimination against people living with HIV/AIDS
and to mobilize all society in the response" noted Mr. Jordan Ryan, United
Nations (UN) Resident Coordinator and Resident Representative, United Nations
Development Programme (UNDP).
ODA effectiveness and reduced transaction costs
Donors complimented the Government for its report on progress achieved in
simplification and harmonization of ODA procedures and for the presentation of a
new harmonization action plan. Delegates also took stock of ongoing bilateral
and multilateral donor initiatives. Participants agreed that recent promising
efforts following the Rome High-Level Forum on Harmonization should be continued
and that Government ODA procedures should be further streamlined and capacity
building accelerated. Donors and the Government expressed their support to a
comprehensive program to enhance Government's capacity to implement ODA. This
program would support improvements in the overall framework for ODA management,
enhance Government's capacity to manage ODA project instruments as well as
explore non-project aid modalities. Delegates agreed to finalize this program by
the time of the mid-term CG in June 2004 at the latest.
The Government and donors agreed that successful implementation of the
Government's strategies, crucially, depends on good governance. This included
continued public administration reform (PAR), combating corruption, and
implementing the Grass Roots Democracy Decree.
"The EU attaches great importance to the sustainable economic growth of Vietnam
which should progress in parallel to good governance and the promotion and
protection of human rights, since they are interdependent and interrelated. The
EU also urges further legal reforms, the strengthening of the role and capacity
of the National Assembly and the People's Councils, advances in the
decentralization process, and a facilitation of the establishment and growth of
independent civil society organizations, representing different interest groups.
The EU is ready to provide its support by transferring know-how and sharing
experiences on these topics" said the Italian Ambassador, H.E. Mr. Luigi Solari,
on behalf of the European Union.
H.E. Ambassador of Sweden, Ms. Anna Lindstedt stated, on behalf of the
like-minded donor group: "We are happy with the strong commitment shown by
Vietnam in the Anti-corruption project, financed by Sweden. There is already an
understanding of all the aspects of corruption in Vietnam. This was recently
evidenced in a seminar organized by the project in October on the
"Identification of theoretical and practical issues in preventing and combating
corruption in Vietnam". In this seminar it was made clear that corruption is a
very broad and complex issue and so is the solution."
Delegates agreed that elements of a solution to corruption issues in Vietnam
included: A comprehensive legal framework, public administration reform,
transparency and accountability, a more significant role for the media, SOE and
financial sector reform, and a careful review of the mechanisms for screening
policy lending.
The Consultative Group for Vietnam met in Hanoi on December 2-3, 2003, under the
co-chairmanship of Mr. Vo Hong Phuc, Minister of Planning and Investment and Mr.
Klaus Rohland, World Bank's Country Director for Vietnam. The Vietnamese
delegation was led by His Excellency, Deputy Prime Minister Vu Khoan and Mr. Vo
Hong Phuc, Minister for Planning and Investment. It included among others: Mr.
Nguyen Bich Dat, Vice Minister of Planning and Investment, Mr. Cao Sy Kiem, Vice
Chairman, Party Central Economic Committee; Mr. Nguyen Ngoc Tran, Vice President
of Foreign Affairs Committee of National Assembly; Mr. Nguyen Minh Thong, Vice
Chairman, Office of the Government, Mr.Nguyen Trung Thanh, Assistant Minister of
Foreign Affairs, Madame Le Thi Bang Tam, Vice Minister of Finance; Mr. Phung
Khac Ke, Deputy Governor of the State Bank of Vietnam; Mr. Phan Viet Muon,
Permanent Vice Chairman, National Steering Committee for Enterprise Reform and
Development; Mr. Hoang The Lien, Vice Minister of Justice; Mr. Nguyen Xuan
Chuan, Vice Minister of Industry, Mr. Nguyen Viet Tien, Vice Minister of
Transport; Mr. Le Danh Vinh, Vice Minister of Trade; Mr. Nguyen Trong Dieu, Vice
Minister of Home Affairs; Mr. Le Ngoc Trong, Vice Minister of Health; Mr. Vu
Tien Loc, President of Vietnam Chamber of Commerce and Industry; Mr. Vu Van
Ninh, Vice Chairman of Hanoi People's Committee; and representatives from 12
Mass Organizations, Research Organizations, and NGOs.
The meeting was attended by delegations from Australia, Austria, Belgium,
Canada, China, Czech Republic, Denmark, Finland, France, Germany, Italy, Japan,
Korea, Luxembourg, the Netherlands, New Zealand, Norway, Russia, Singapore,
Spain, Sweden, Switzerland, Thailand, the United Kingdom, the United States and
the European Commission. Also attending were representatives from the Asian
Development Bank, International Finance Corporation, International Monetary
Fund, and the United Nations Development Program. Attending as observers were
delegations from Argentina, Hungary, India, Slovakia, South Africa, Food and
Agriculture Organization, International Fund for Agricultural Development,
International Labor Organization, Joint United Nations Program on HIV/AIDS,
United Nations Educational, Scientific and Cultural Organization, United Nations
International Children's Fund, United Nations High Commissioner for Refugees,
United Nations Industrial Development Organization, United Nations Office on
Drugs and Crime, World Health Organization, International Non Governmental
Organizations in Vietnam represented by Oxfam Great Britain, SNV Netherlands
Development Organization, Population Council, ActionAid Vietnam, and NGO
Resource Center.
The World Bank Press Release - December 03, 2003.
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