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Regions and Countries Country Assistance Plans Document
Country Assistance Plans - Viet Nam
V. Donor Activities and Aid Coordination67. The pledges made by the aid community to Viet Nam have gradually grown since the first Consultative Group (CG) meeting in 1993. At the CG meeting held in Hanoi in December 1999, donors pledged $2.1 billion for 2000, bringing the total amount pledged since 1993 to approximately $14 billion. CG meeting participants also indicated that up to $700 million of additional funds would be available to support an accelerated and time-bound program for reforms and poverty reduction. (Appendix 3 provides information on external assistance to Viet Nam). In line with the commitments, progress has been made on the implementation of official development assistance (ODA). Disbursements (including grants) increased from $726 million in 1996 to $1.1 billion in 1997 and 1998, and to about $1.2 billion in 1999. The Government is aware of the need to speed up disbursements, and very keen to improve ODA performance, in order also to compensate for the slowdown in FDI inflows which started in 1998. Decrees have been issued to provide for a complete set of consistent budget and ODA management regulations, and to ensure availability of counterpart funds. As a result of the joint Government/ADB/JBIC/World Bank Project Management Conference held in April 2000, a number of further areas for improvement have been identified (see para. 29), and concrete action is expected in the next 12 months on these issues. 68. United Nations agencies have been an important source of external assistance to Viet Nam since the mid-1980s. Support for the transition to a market economy, governance, social development and environmental protection are the main themes of the UNDP's program. UNDP also plays a vital role in aid coordination and mobilization. ADB coordinates actively with UN agencies, which are cofinancing or cooperating with ADB projects in the respective areas of expertise (for example health in the case of UNFPA, UNICEF, and WHO). A joint assessment of the legal sector and reform needs was started in 2000 between UNDP, World Bank and ADB. 69. The World Bank is the largest multilateral source of external assistance to Viet Nam, with average annual commitments of $358 million during 1994-1999, compared to ADB’s $229 million. Structural reforms, SOE reform, banking modernization, rural development, health, education, transport, and energy are major areas of its operations. The World Bank and ADB regularly conduct discussions to coordinate activities and pursue an efficient division of responsibility. A clear demarcation has been achieved in the education sector, where the World Bank is supporting primary and higher education and ADB is taking the lead in secondary and technical education. In the power sector, responsibilities are shared according to sub-sector and geographic coverage, while maintaining a common approach on policy and institutional issues. In rural development, coordination is ongoing in light of ADB’s future concentration on the Central Region. As preparation of both ADB’s Country Strategy and Program (CSP) and the World Bank’s country assistance strategy (CAS) will be finalized in 2001, and both will have as a starting point a Poverty Reduction Strategy jointly developed with the Government in 2000, it is expected that sharper division of responsibilities, within an agreed overall framework, will be achieved in the future. 70. Among bilateral sources of assistance, Japan is now Viet Nam's principal channel of ODA, with annual commitments of more than $700 million. Japan is especially active in physical and social infrastructure rehabilitation projects, but has provided through the new Miyazawa initiative support for policy reforms enhancing the role of the private sector. Sweden and Finland have a long history of support to Viet Nam, while Australia became an important source from the mid-1980s. Other important bilateral sources are the Netherlands, Switzerland, Belgium, Canada, Denmark, France, Germany, Italy, Spain, and the United Kingdom. The European Union has emerged as an important multilateral donor since 1990. Consultations with and briefings to all relevant bilateral sources are routinely conducted during country programming missions and project processing missions, and through annual consultations with some donors held at ADB Headquarters. 71. NGOs played an important role in providing assistance to Viet Nam before 1993, and continue to do so, especially in grass-roots rural development and programs targeting disadvantaged groups. NGOs, operating within government policies and procedures, are currently providing support to over 700 generally small-scale projects and programs, ranging from humanitarian/emergency relief to rural credit and the development of small-scale irrigation facilities. ADB regularly consults with NGOs at the project design stage, to learn from their experience and incorporate successful approaches. In some instances, Viet Nam-based NGOs are implementing components of ADB TAs. Consultations are also held by VRM and visiting country programming and country strategy missions. Recent consultations highlighted three issues: (i) NGO requests to be involved in a more systematic manner in consultations on all levels of ADB operations, from the country strategy to the assistance plan, sector studies, and specific projects; (ii) NGO requests to ensure quality interaction through timely information on meetings and appropriate briefing on issues to be discussed; and (iii) NGO suggestions that ADB help develop the capacity and role of the NGO sector in Viet Nam. 72. Viet Nam has been identified by the World Bank as a pilot case to implement the principles of the Comprehensive Development Framework (CDF). In practice, however, the approach has so far been implemented in a partial and selective way. The process can be expected to evolve gradually over a medium-term time frame, because simultaneous and thorough analysis of issues and coordination of operations in all sectors would place excessive demands on the Government and donor community. Good cooperation has been established between the Government, external aid agencies, NGOs, and other concerned stakeholders in the formulation of a common Poverty Reduction Strategy, while coordination at the sector level is pursued through “partnerships”, as discussed below. The recent practice of holding a mid-term CG meeting (in June 2000 in Da Lat) and of holding the annual CG meeting in-country has also contributed to more continuity and Government involvement in the coordination process. 73. Preparations for a common Poverty Reduction Strategy started with a situation assessment, titled Attacking Poverty, which was presented and discussed at the December 1999 CG meeting. On this basis, a working group composed of Government, multilateral aid agencies (including ADB, the World Bank and UNDP), bilateral donors, and NGOs will continue analysis and elaboration of proposals throughout 2000, leading to discussion of a draft Poverty Reduction Strategy at the December 2000 CG meeting. The document will provide a common basis for more tailored efforts meeting the detailed requirements of the Government (in its 2001- 2005 Plan and 2001-2010 Strategy), other aid agencies (such as the World Bank and IMF’s Poverty Reduction Strategy Paper), and ADB’s CSP and Partnership Agreement, which will be finalized in the first half of 2001. 74. To promote coordination at the sector level, “partnerships” involving the relevant Government ministries and key donors active in the sector has proven fairly successful in ensuring dialogue and cooperation. Approximately 20 such partnerships exist at present, ranging from fairly loose arrangements and sporadic meetings to very well defined structures, backed by a permanent secretariat and funding mechanism. ADB is currently involved in 11 such partnerships, and has, for example, signed a memorandum of understanding and agreed to contribute funding for a joint approach to address the sustainable development of Ho Chi Minh City under the Official Development Assistance Partnership with JBIC, World Bank, UNDP, Belgium, HCMC People’ s Committee and the Government of Viet Nam. Through the process of preparation of the CSP, ADB participation in these partnership initiatives will be made more selective, with ADB belonging to the “core group” of external aid agencies in the sectors of more significant involvement, while retaining “observer status” in the remaining partnerships. In the sectors of more significant involvement, mechanisms will be developed to assign responsibilities as appropriate to both the Resident Mission and Headquarters, in order to maximize the benefits of coordination.
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