ADB's Work in Viet Nam
Partner in Economic Reform, Partner in Inclusive Development
Viet Nam underwent dramatic economic reforms in the 1980s and 1990s and ADB stood in partnership during the sometimes difficult process. Today, Viet Nam is a lower-middle-income country that has made huge strides in social and economic development.
Viet Nam became a founding member of ADB in 1966, and within the first decade of the partnership, more than 20 projects were implemented. After a break in operations from 1978 to 1993, ADB reengaged with the country with renewed vigor.
In the 1980s, Viet Nam undertook a reform process called Doi Moi to revamp a broad range of economic policies. ADB in the 1990s partnered with Viet Nam to transition from a centrally planned economy to a market-oriented one, and provided assistance to promote economic growth, reduce poverty, and support sustainable development.
ADB’s support during this period centered on the rehabilitation, development, and expansion of physical infrastructure; economic policy reform; mobilizing domestic resources; and promoting social services. Incorporating good governance and gender equity in projects was a particular priority.
Building strong links
ADB and the Government of Viet Nam recognized early on during the resumption of operations in the 1990s that the country’s dilapidated road system would hinder plans to stimulate the investment-led, market-oriented economic growth needed to create jobs and reduce poverty.
Initial work was concerned mainly with upgrading key national highway infrastructure and improving selected district and commune roads. Provincial roads were also upgraded to provide access to markets, provincial capitals, and the national highway network, and to connect the rural population.
From the resumption of operations in 1993 up to 2008, the largest share of ADB’s loan disbursements to the country went to the transport sector. More than 30 transport projects were implemented during the period. As a result, about 1,000 kilometers (km) of national roads, 4,000 km of provincial and district roads, 2,100 km of rural roads, and hundreds of small bridges were improved.
The economic impact of the improved transport system, alongside a suite of wide-ranging economic reforms, became apparent in the 2000s. Economic growth averaged a strong 7.4% per year from 1998 to 2007, and poverty declined from 35% in 2000 to 16% in 2006.
In the 25 years since the initial reforms began, Viet Nam has made impressive progress, transforming itself from an impoverished country to one of the fastest-growing economies in Asia.
Viet Nam is now classified as a lower middle-income country. The nature of ADB’s assistance has accordingly changed. The focus now is on providing “finance++” support, which means providing finance, sharing knowledge, and leveraging other financing sources, including the private sector.
"ADB always accompanies Viet Nam as a credible partner throughout the country development phases in the last 20 years. I would like to express my deep and sincere appreciation to ADB and other donors. I strongly believe that this cooperation will continue to be enhanced both in depth and width."
Connecting with neighbors
Viet Nam has actively participated in the Greater Mekong Subregion Economic Cooperation Program, established in 1992 with ADB assistance. With support from ADB and other donors, the program has supported priority subregional projects in transport, energy, telecommunications, environment, human resource development, tourism, trade, private sector investment, and agriculture.
A trip down Viet Nam’s longest expressway, the Noi Bai–Lao Cai highway, which opened in September 2014 and is part of the ADB-supported North–South economic corridor project, shows how much impact one road can have on a country’s economic fortunes. This toll road links the capital Ha Noi to the PRC border at Lao Cai, 244 km to the northwest, cutting the travel time from 7 hours to just 3 hours.
Do Minh Thuan of the Yen Bai Province department of transport says the number of vehicles using the expressway has leaped by more than 100%, to over 19,000 a day, compared with the previous year. The department has also noted a 60% reduction in road-related accidents in the first half of 2015 compared with the same period in 2014.
New shops, cafes, and hotels have sprung up along the route, and tourism and crossborder trade have increased.
The highway itself, including power, communications, and toll booths, was 8 years in the making, with ADB providing more than $1 billion in finance.
ADB has supported two other Greater Mekong Subregion economic corridors that connect Viet Nam to its neighbors in the region: the Southern Economic Corridor, connecting major towns and cities in the southern part of the subregion; and the East–West Economic Corridor, which spans 1,320-kilometers from Da Nang Port on Viet Nam’s eastern coast, to the Indian Ocean coast of Myanmar. Economic corridors comprise a variety of complementary projects that are usually situated along a major highway.
In keeping with its focus on greener urban transport solutions, ADB is also helping to provide the 14 million residents of congested Ha Noi and Ho Chi Minh City with clean, efficient metro rail services, and to foster more livable, resilient cities.
Helping those in need
ADB has also provided direct assistance to the people in the country who are most in need. This includes people in the rural communities in Viet Nam’s Central Highlands.
Many people in these communities used to seek medical treatment from untrained traditional village practitioners. They preferred herbal remedies over modern medicines. The belief that diseases came from ghosts was common, and it exacerbated a lack of awareness of the health risks posed by poor hygiene.
These attitudes changed, partly due to the ADB-supported Health Care in the Central Highlands Project, says Nguyen Thi Luyen, a nurse working in the area.
Under the project, medical staff set up an information, education, and communication center in the hospital to raise awareness of the benefits of modern medical care. Each village in the surrounding areas was provided with at least one health worker, and nurses were trained in patient management techniques.
Since these measures were taken, local communities have reported lower rates of disease and infant mortality, says Thi Luyen.
“The project also trained frontline health workers and upgraded the skills of doctors, provided vehicles and wastewater treatment plants, and helped in myriad other ways,” says Nguyen Thi Ven, director of the department of health in the area. “It had a great influence on our province.”
This article was originally published in a special edition of Together We Deliver, which tells 50 stories highlighting the importance of good partnerships in Asia and the Pacific in meeting the complex development challenges of this dynamic region.