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4.6.1 Poverty reduction in Vietnam

Vietnam has integrated the major principles of its Comprehensive Poverty Reduction and Growth Strategy (CPRGS) into the national five year Socio-economic Development Plan (SEDP). This CPRGS served as the PRS from 2002 to 2005. Therefore this chapter will concentrate on both the CPRGS and other national poverty reduction strategies as well.

PRS in Vietnam: The CPRGS

In 2000 the Government of Vietnam decided to conduct a PRS process and published an Interim-PRSP (I-PRSP) in March 2001. The full version followed in 2002 entitled the CPRGS, and was completed with a section on infrastructure in 2003. 

An inter-ministerial committee was founded to formulate the CPRGS; it consisted of 52 officials from 16 governmental agencies, and was chaired by the Ministry of Planning and Investment (MPI). Donor agencies such as the World Bank, the IMF and bilateral donors were involved in organising the consultative process. Civil society representatives were contacted through the parastatal mass organisations (like the women’s union), which are organised under the fatherland front of the Communist Party.

The Participation in policy-making and implementation at local level (community and district) was authorised by the Grassroots Democracy Decree, and thus included the real poor. However, despite some positive effects, participation at local level can neither be labelled as broad-based nor as being institutionalised.

Combination of PRS and domestic policies

The overall political strategy of Vietnam is documented in the country’s National Ten and Five-Year Plans. These plans have clear objectives, indicators and targets. One of the objectives of the five-year plan (2006-2010) is to reduce the poverty rate to 11% (from 15% in 2007). Target programmes are linked to these overarching plans, e.g. the so-called HEPR (Hunger Eradication and Poverty Reduction) Programme, which was first ratified by the Government in 1998. This programme was the result of a several-year long process with interaction from local initiatives. It included studies and summaries from the government, and was intended to formulate policies and find solutions that would enable Vietnam to cope effectively with the increasingly serious hunger and poverty problems that arose in the early 1990s. By building a national target programme, the government’s regular planning included for the first time concretely defined hunger eradication and poverty alleviation objectives, with a clear supervision mechanism. Activities and resources were planned and implemented as a part of the development plan of authorities at all levels. This shows the commitment of Vietnam towards poverty reduction even before the IMF and the World Bank introduced the PRS approach. The Vietnamese government renamed the programme in the second phase (2006-2010) the National Targeted Programme for Poverty Reduction (NTP-PR), reflecting the eradication of hunger if not poverty.

In 2006 the Vietnamese government decided to follow the PRS exercise according to the World Bank approach, but stated that the Ten and Five-YearPlans will remain the basis for poverty reduction policies. 

Although the PRS approach seemed first to duplicate domestic planning processes, it had some positive effects in two main areas:

  1. More ministries became responsible for poverty reduction:
    Before the elaboration of the CPRGS, only the Ministry of Labour, Invalids and Social Affairs (MOLISA) was responsible for poverty reduction. However, the CPRGS made poverty reduction an important issue for almost all the country’s ministries, culminating in making it a cross-cutting issue following the integration of poverty reduction into the Socio-economic Development Plan 2006-2010 (SEDP).
  2. Donor harmonisation and alignment on national policies:
    The CPRGS facilitated the ambition of donors to harmonise their activities. A Poverty Working Group was formed to discuss the various projects, consisting of the government, the World Bank and the IMF, bilateral donors and INGOs.

World Bank support

Although Vietnam is not strictly following the PRS approach, the World Bank still provides technical and financial support. The CPRGS provided the basis for the Poverty Reduction Support Credit (PRSC) which is managed by the World Bank and financed by many donors (e.g. by Germany). The results of the PRSC are presented in the "Vietnamese Development Reports" (VDR). The yearly published joint donor reports cover one topic and are under the responsibility of the World Bank. In 2007 the report was entitled "Aiming High", and focused on assessing SEDP/CPRGS. The VDR also provides the basis for all decisions on new payments and programmes. In mid-2006, the World Bank invited NGOs to take part in the discussions within the donor community on the priority policy actions needed to implement the SEDP over the next five years, with the aim of discussing these policy actions with the Vietnamese Government as part of the PRSC negotiations.

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