UK Development Assistance to Vietnam

HRH The Princess Royal opened DFID's new office in May 2002

The UK Department for International Development (DFID), is the UK Ministry which provides official development assistance (ODA) to poorer countries, and is headed by the Secretary of State for International Development, Valerie Amos. DFID’s work in Vietnam is managed by its office in Hanoi, with support from our regional office in Bangkok. DFID began working in Vietnam in 1992 with just one member of staff based in the British Embassy, supported by the regional office in Bangkok. Now there are 22 staff based in the Hanoi office and seven others seconded to the Ministry of Planning and Investment, The World Bank and World Health Organisation. The staff in our Hanoi office include advisers with expertise in governance, economics, rural infrastructure, and from July, rural livelihoods. In 2002/03 DFID provided approximately US$30 million of assistance to Vietnam. All of DFID’s assistance to Vietnam is grant aid.

DFID's Objectives

DFID’s objective is to contribute to the elimination of poverty world-wide, in partnership with developing country governments and other donors. The primary goal is to support the UN’s Millennium Development Goal to halve the proportion of people living in poverty by 2015, that is the people who have an income of less than US$1 a day. The UK highlighted its commitment to poverty alleviation in March 2003, pledging to increase funding for global development assistance from $5.44 billion in 2002/03 to nearly $7.36 billion by 2005/06.

How does DFID help poor people in Vietnam?

Our work in Vietnam can be summed up as poverty alleviation and partnerships. DFID is committed to supporting the Vietnamese Government to improve the lives of poor people in Vietnam, in partnership with other donors. Our assistance is within the framework of the Government of Vietnam’s own poverty reduction strategy, the Comprehensive Poverty Reduction and Growth Strategy (CPRGS). We also support two poverty experts in the World Bank who undertake research on poverty issues which can be used by the Vietnamese Government and other donors, and we are supporting the Government’s work to help provinces to integrate the objectives of the CPRGS into their annual expenditure planning processes.

Economic reform is essential for creating the right policy environment for sustainable development. We are working with three General Corporations (VINACAFE, VINASEAPRODEX and VINATEX) to develop models for the restructuring of the General Corporations and their State Owned Enterprises. We are joining forces with many other donors and the IFC to support Small and Medium Enterprises (SMEs) development via the Mekong Private Sector Development Facility Project. We support the reform of public financial management together with several other donors through a Trust Fund, working with the Ministry of Finance and the World Bank of Vietnam. We have recently provided $22 million to the World Bank’s Poverty Reduction Support Credit which finances reforms to support the implementation of the CPRGS, and are providing $14 million to a further PRSC this year, with up to three more planned for the next three years.

A major focus of DFID’s assistance is on rural areas, where 80% of all Vietnamese people and the majority of poor people live. We are co-financing projects with the World Bank in the Northern Mountains and with the Asian Development Bank in the Central Region, together with other bilateral donors. These projects will improve planning processes and management of the provision of rural infrastructure, such as roads, schools and clinics, and services, like education, as well as building new schools, roads and other rural infrastructure. The total DFID support for this work will be $30.0 million.

A good education is perhaps the most important way that a poor person can improve their life. DFID is committed to helping the Government ensure that every child, even in the most remote mountainous areas, gets the chance to have nine years of basic education. This means building more schools and improving the quality of teaching. DFID is working with the Ministry of Education and the World Bank to improve the quality of primary education nationally, providing co-financing of approximately $12 million. We are also about to start funding of approximately $37 million for a new project with the World Bank, MOET and other bilateral donors to provide better access to and quality of primary education for disadvantaged children. We are also supporting the development of English Language Teacher Training.

Rural transport is another area where DFID is actively involved. It is extremely important to enable poor people in remote areas to access rural centres, so that they can sell their agricultural produce, access education and health-care, or information, for example, on how to improve their crops. DFID is working with the World Bank to build more roads in rural areas and to help develop a better system nation-wide for maintaining roads. We are providing approximately $27.0 million for this project over five years.

We are also supporting the Government to prevent the spread of HIV infection in Vietnam. Working through the World Health Organisation, in partnership with the Ministry of Health and other Ministries, we will support the supply and marketing of subsidized condoms to prevent HIV infection, focusing on groups whose behaviour puts them particularly at risk (sex workers and their clients, and injecting drug users). This project will also help develop national and provincial action plans to tackle HIV/AIDS. We are providing approximately $25.0 million with an additional $1.2 million of assistance from the Norwegian Government.

Working in partnership with others

Whenever possible, DFID works together with other donors so that the collective resources and efforts can have more effect on reducing poverty and so that the Government does not have to waste time coordinating between different, individual donors. The World Bank is DFID’s key partner in Vietnam, but DFID are also working very closely with the Asian Development Bank, the World Health Organisation, several bilateral donors, (Sweden, Norway, Finland, The Netherlands, Canada, Denmark, Germany, Australia and Switzerland), who together are known as the "Like-Minded Donor Group". Several members of this group, including DFID, are supporting a "Harmonisation of ODA" project which aims to improve coordination of donor ODA, eg. through co-financing and sector wide approaches, and build Government capacity to manage ODA better, and where possible, bring Government’s own ODA management regulations up to international standards so that they can be used by donors as well.

What's next?

DFID’s presence in Vietnam is set to grow significantly in 2003. A new overarching plan, the Country Assistance Plan, will be finalised by July 2003, dictating DFID’s specific priorities for the next three years. New projects to strengthen the capacity of the Committee for Economic and Budgetary Affairs of the National Assembly, and for improving the Government’s capacity to manage public sector finances are planned to start soon. Other new planned projects include support for the ADB managed project to improve access to markets for poor people; and a further investment of $14.5 million in a second PRSC, which will support reforms under the CPRGS including completing the transition to a market economy, making development inclusive, and building modern governance. We plan to spend up to $37.7 million in 2003/04, $58.7 million in 2004/05, and $87 million by 2005/06.

We are also about to welcome our new Head of Office, Bella Bird, who will start with us on 26^th May, and to say goodbye to Alan Johnson who has been Head of DFID Vietnam since 1999.

For more information on DFID, contact:

Angus Miller,

DFID Vietnam
7th Floor, Central Building
31 Hai Ba Trung
Hanoi
Tel: +84 4 9360555
Fax: +84 4 9360556 a-miller@dfid.gov.uk