Vietnam has made significant development progress during the past two decades and it has increasingly integrated into the world economy. The government has strong ownership of its development agenda and consistently demonstrates an effective use of international development assistance. Vietnam has reduced poverty at an unprecedented rate: the number of Vietnamese living on less than US$1.25 per day fell from 64 percent in 1992 to 17.2 percent in 2012. Economic growth has slowed in recent years, although GDP continued to grow in 2013, by 5.2 percent, despite weaknesses in the global economy.
Vietnam's success is reflected in markedly improved social circumstances. The country has already met the Millennium Development Goals (MDGs) to eradicate extreme poverty and hunger and to improve maternal health. Vietnam is on track to meet most of the other MDGs, with almost universal access to primary education, health care, and basic services. More efforts, however, are required related to environmental sustainability.
The United Nations Development Programme ranked Vietnam 127 out of 187 countries on its 2012 Human Development Index. In 2012, average annual per-capita income in Vietnam reached US$1,550, moving Vietnam into lower-middle-income country status. Recent economic growth has improved the quality of life for many Vietnamese, but some sectors of the population, particularly the rural poor, ethnic minorities and female-headed households, are not equally benefiting from economic growth. In addition, Vietnam faces ongoing economic instability and a need to reform its financial sector to meet the demands of its evolving economy.
A single party dominates Vietnam's political system. Corruption and excessive regulations and state controls continue to constrain development, while significant concerns remain regarding rights to freedom of expression and association. There are signs, however, of greater government transparency and accountability, especially within the National Assembly, of more participatory citizen consultations and of better public financial management.
Vietnam's transition to a lower-middle-income economy has brought about new challenges and needs. To promote private sector development and facilitate the ease of doing business, there is a need for legal and policy reforms. There is also a need for reforms to ensure the robustness of the banking and public financial system, to better connect public services to the demands of the market and citizens and to combat corruption. Vietnam's ongoing decentralization of its public finance accounts and service delivery highlight the need to strengthen provincial capacities, and a focus on increasing agricultural competitiveness is needed to address sustained poverty reduction in rural areas.
In 2014, Vietnam was confirmed as a country of focus for the Government of Canada's international development efforts.
Canada's current development cooperation program in Vietnam responds to the Government of Vietnam's poverty reduction priorities and focuses on improving the enabling environment for investment and to support rural enterprise development and agricultural competitiveness. Vietnam's development goals are set out in the Five-Year Socio-Economic Development Plan 2011-2015 (PDF, 774 KB, 147 pages), in which reforms and targets for economic growth and poverty reduction are outlined for four main areas:
- restructuring economic institutions;
- education, training, and human resource development;
- development of a knowledge economy;
- environmental protection and prevention of natural disasters.
Canada focuses on supporting policy reforms that improve the transparency and accountability of public institutions and market-driven growth. To do so, Canada is helping to promote private sector development and entrepreneurship, small and medium-sized enterprises, legislative and banking reforms and improved access to skills for employment.
Key anticipated results
- More small and medium-sized enterprises gain access to training and business development support services to enhance their productive capacity and competitiveness.
- Increased access in targeted poor rural communities to small-scale infrastructure to support small and medium-sized enterprise development.
Canada focuses on increasing agricultural competitiveness by improving food safety and quality and by supporting agricultural innovation and the development of marketing techniques for farmers and traders, especially at the provincial level.
Key anticipated results
- More farmers gain access to improved agricultural support and training to enhance their productive capacity and income.
- Increased access by women and men farmers in targeted poor rural communities to small-scale infrastructure, such as irrigation, to support agricultural production and development.
Vietnam is recognized internationally as a leader in aid effectiveness for its strong local vision, ownership and implementation of a made-in-Vietnam poverty reduction strategy.
Vietnam offers an effective model for donor coordination at the policy level. The Government of Vietnam's commitment to transparent results reporting is set out in the Hanoi Core Statement on Aid Effectiveness and the Vietnam Partnership Document, which adapt the Paris Declaration on Aid Effectiveness (PDF, 317 KB, 23 pages) and the Busan Partnership agreement to the Vietnamese context. Canada, along with other donors and development partners, is actively engaged in the Government of Vietnam's donor consultative group coordination process. Canada also plays an active role in supporting recognition of and space for Vietnamese and international civil society in the country's development plans.
- Helped to increase private sector access to finance by supporting improvements to the loan administration process, resulting in more than 130,000 new loans issued across the Mekong region.
- Supported legal and regulatory improvements by eliminating or simplifying 29 government procedures aimed at businesses and contributed to the improvement of more than 100 laws or policies and the improvement or elimination of more than 300 government procedures or practices in the Mekong region, saving businesses an estimated $447 million in government compliance costs each year.
- Provided the Vietnam Economic Committee with information regarding Canada’s deposit insurance and financial market supervisory system, which better equipped the committee to review deposit insurance legislation (adopted in June 2012).
- Contributed to the revision of the Law on Environmental Protection, including addressing key issues such as information disclosure and civil society participation, which is equipping Vietnam to better undertake sustainable industrial development
Canada is helping to improve the quality and quantity of food produced in Vietnam in the following ways:
- supporting pilot projects to improve agricultural practices, helping 38 farms and cooperatives to participate in activities to obtain Good Agricultural Practices (GAP) certification, resulting in reduced chemical contaminants in vegetable samples (e.g. from 19 percent to 3.5 percent in Lam Dong province) and biological contaminants in pork samples (e.g. from 75 percent to 0 percent in Ho Chi Minh City);
- providing training in new technologies that help increase revenues by as much as 30 percent to more than 8,000 farmers, 2,400 of whom are women;
- completing rural infrastructure projects that help reduce transportation time by more than 70 percent between the area of production and local markets for more than 47,000 farmers, which reduced post-harvest losses by 33 percent;
- supporting the implementation of the Ha Tinh province’s 2011-2015 Agriculture and Rural Development Plan, which will assist the province to diversify and include more value-added production, including first-time activities such as a market analysis and farmer and stakeholder consultations to identify priority commodities and market constraints.
- Contributed to establishing modern budget-management systems in 35 provinces, increasing efficiency and transparency in the use of public sector finances.
- Helped train more than 4,800 legislators and government staff members on policy development and lawmaking since 2009, leading to the creation of modern and coherent laws on commercial arbitration and labour and to the enhancement of the environment for businesses to grow and to create jobs.
- Helped 7,966 people, 67 percent of whom were women, acquire new skills in areas such as teaching, training trainers and communications in 10 organizations working in private sector development.
- Helped train 7,800 students in communications, teamwork, conflict resolution, interpersonal skills, information management and interview techniques, resulting in 85 percent of the students finding employment.
- Trained 75 provincial experts to design and deliver courses on industrial pollution management to stakeholders in the public and private sectors.
- Contributed to the establishment of model courts in three provinces and provided exposure to Canadian expertise and technology in court administration, such as digital and audio recording in trials, to improve the efficiency and transparency of courts.
- Helped the Global Fund to Fight AIDS, Tuberculosis and Malaria provide HIV/AIDS treatment to 19,000 people, detect and treat 4,900 cases of tuberculosis and distribute 3.7 million insecticide-treated bed nets for the prevention of malaria between 2002 and 2012.
- Helped the Stop TB Partnership, through the TB REACH initiative, increase tuberculosis case detection, reduce tuberculosis mortality and transmission and improve access to health care for prisoners and prison staff.
- Helped the Tuberculosis Department of the World Health Organization diagnose 3,900 tuberculosis cases in the three largest national hospitals in Hanoi.
- Helped farmers receive GAP certification for four key agri-food products, significantly reducing chemical contaminants in fruit, vegetables, poultry and pork.
- Supported the rehabilitation of 12 small-scale irrigation works servicing more than 1,000 hectares of land for cultivating rice and improved village roads for 400 households in the province of Ha Tinh.
- Contributed to the development of a national strategy on climate change, 20 provincial coastal management plans, and a national action program to reduce greenhouse gas emissions from agriculture.
By working with Canadian and international partners, Canada is working to improve the health and rights of women and children globally, which includes the country of Vietnam.
2014-2015 international assistance disbursements to Vietnam (in millions of dollars)
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