Vietnam has made significant development progress over the past two decades and has increasingly integrated into the world economy. The government has strong ownership of its development agenda and consistently demonstrates an effective use of development assistance. Vietnam has reduced poverty at an unprecedented rate: the number of Vietnamese living on less than US$1.25/day fell from 64 percent in 1992 to 16.9 percent in 2010. The country's gross domestic product grew by an estimated 6.8 percent in 2011, despite the global economic recession.
Vietnam's success is reflected in markedly improved social indicators. 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 gender equality, environmental sustainability, and economic liberalization.
The United Nations Development Programme ranks Vietnam 127 out of 187 countries on its 2012 human development index. In 2010, average per capita income in Vietnam reached US$1,160, 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 now faces ongoing macro-economic instability and a need to reform its financial sector to meet more competently 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, better connect public services to the demands of the market and citizens, and combat corruption. Vietnam's ongoing decentralization of public finance accounts and service delivery highlights the need to strengthen provincial capacities, and a focus on increasing agricultural competitiveness is needed to address sustained poverty reduction in rural areas.
In 2009, as part of Canada's new aid effectiveness agenda, Vietnam was selected as a country of focus for international development. Canada's current 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:
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.
Canada focuses on increasing agricultural competitiveness by improving food safety and quality and by supporting agricultural innovation the development of marketing techniques for farmers and traders, especially at the provincial level.
As well as promoting national reforms and provincial governance, Canada supports Canadian organizations that work with Vietnamese counterparts. Canadian organizations respond to the development needs of vulnerable groups, such as women and ethnic minorities, in Vietnam. By partnering with Vietnamese organizations, Canadian organizations work in a wide range of areas, including agricultural productivity, technical and vocational training, municipal governance, and higher education. These organizations include Oxfam-Québec, the Société de coopération pour le développement internationale, Consortium WUSC-CECI, the Federation of Canadian Municipalities, and Saint Mary's University.
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 Vietnamese government'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 documents 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 and space for Vietnamese and international civil society in the country's development plans.
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