Documented and presented by:

Ramesh Khadka – ActionAid

Stephen Price-Thomas – Oxfam Great Britain

Deepali Khanna – Plan International

Jane Hughes – Population Council

With support from:

The VUFO-NGO Resource Centre

La Thanh Hotel, 218 Doi Can street, Hanoi

Tel: (84 4) 832 8570 Fax. (84 4) 832 8611
info@ngocentre.netnam.vn

Introduction

More than 500 International Non-Governmental Organisations (INGOs) have now established ties with Viet Nam. INGO programs reach all 64 provinces and centrally administered cities of Viet Nam.

The Government of Viet Nam estimates that INGOs disbursed more than USD 800 million between 1993 and 2003. In 2004 it is expected that INGO disbursement will exceed USD 100 million.

A major focus of INGO assistance is human development, in terms of:

· Poverty reduction

· Improvement in social equality

· Reduction of vulnerability

· Increased participation and the voices of the poor and marginalised

INGOs support activities from the household and hamlet up to the national level, as well as at the international level through research and advocacy. INGO assistance is increasingly targeted to remote areas with the poorest and most vulnerable communities and populations, including ethnic minority populations.

INGOs support both governmental and non-governmental partners in Viet Nam. INGOs strongly align their work with key Vietnamese initiatives to increase people’s participation, including the Grass Roots Democracy Decree and the ongoing efforts of the Government to develop strong, vibrant and effective private and non-governmental sectors, offering greater choices and opportunities for the Vietnamese people to achieve their full potential. INGOs seek to support Vietnam’s efforts to balance the major objectives of simultaneously combating poverty and integrating more fully into the global economy.

As in previous years, four elected INGO Representatives will participate in the annual Consultative Group (CG) meeting on behalf of INGOs. This contribution has been prepared by these organisations, based on the agenda for the CG meeting. It is informed by wider consultations with INGOs in Viet Nam, undertaken with the support of the VUFO-NGO Resource Centre, and reflects INGO perspectives and concerns based on our shared experience in Viet Nam.

The following INGO Representatives will participate in the CG Meeting in Hanoi on 1-2 December 2004:

Ramesh Khadka - ActionAid

Stephen Price-Thomas - Oxfam Great Britain

Deepali Khanna - Plan in Viet Nam

Jane Hughes - Population Council

Session I: Achievements, challenges and prerequisites for socio-economic development for the period 2006-2010

Progress and challenges implementing the socio-economic plan, 2001-2005

INGOs commend the many achievements of Vietnam during 2001-2005. Overall targets for economic growth and poverty reduction are being met or exceeded. We note the Government’s assessment of difficulties and challenges during the 2001-2005 period, including such concerns as the quality of growth, environmental costs of economic development, and serious issues in some social aspects, including education and training, rural incomes, and corruption.

INGOs are concerned about increasing inequality, especially between urban and rural areas. We also note that, despite significant Government efforts and resources, in recent years, poverty indicators for ethnic minorities in the Central Highlands region are yet not decreasing.

Key issues for the Social and Economic Development Plan (SEDP) for 2006-2010

Process issues for the next SEDP

· Review of 2001-2005 SEDP: We urge that the review of the 2001-2005 SEDP be done with abundant participation and feedback from all levels, just as called for in the Prime Minister’s Directive on the preparation of the five-year Socio-Economic Development Plan 2006-2010 (Directive 33) dated 23 September 2004

· INGOs support the plan to incorporate the Comprehensive Poverty Reduction and Growth Strategy (CPRGS) into the 2006-2010 SEDP. The new SEDP should build on the best elements of both to produce a plan that is owned by government at all levels and sectors.

· Building upon the process used to develop the CPRGS, poor and vulnerable people should have the opportunity to give their inputs to the new SEDP. This time the process should be more wide ranging. NGOs have the networks at community level to provide effective assistance in this process, and are eager to lend their support.

· INGOs welcome the government’s commitment, as stated in Prime Minister’s Directive 33 and in the Government Report for the 2004 CG meeting, to many rounds of consultation with a wider array of stakeholders. We also note the positive role played recently by the Viet Nam Union of Scientific and Technical Associations, known as VUSTA, in supporting an expanded role for Vietnamese socio-professional organisations. We look forward to the inclusion of Vietnamese non-governmental organisations in the SEDP consultation process.

· Monitoring and Evaluation of SEDP implementation: INGOs welcome the government’s commitment to use of indicators in the next SEDP that track quality and impact of growth, as well as quantity. Viet Nam’s Millennium Development Goals (VDGs) should be the core content for monitoring and evaluation. Poor and vulnerable people and grass roots groups have a role here too. They have demonstrated their will and ability to do monitoring and evaluation at the grass roots in Viet Nam.

Content of the next SEDP

There are a number of current challenges in social development that cut across many sectors and all levels of government. The 5-year plan is an essential vehicle for outlining the multi-year agenda for effective responses.

We support the foresight as shown in many of the steps called for in the Government report for the 2004-CG meeting. In particular, we welcome Chapter II’s call for, “making fundamental changes in associating economic development with social development.” The report cites four apt examples of “urgent issues” needing the new approach -- human resource development, poverty reduction, job creation, and assuring social and political stability. However, we also note that the Government report’s language is more specific and strategic for economic development objectives than it is for social development issues and objectives, which often are merely listed, with little or no concrete content.

INGOs hope to see the new SEDP include more strategic content and objectives on social development. Examples include the following

· Improve social safety nets for the poor and vulnerable. Plans for this and other social development objectives should be linked to increased budget allocations.

· Full access for ethnic minorities, poor migrants, at-risk young people and other vulnerable groups to education, job training and health services.

· Better legal and political frameworks, in particular for gender equality, property rights, and rights of workers. Finalise the proposed legal framework for micro-finance as an essential prerequisite for improving credit access for poor households. Better management of the environmental costs of economic development especially the effects on forest, land and water resources.

· Increased human security, including zero tolerance for violence against women and for stigma and discrimination against people living with HIV/AIDS, and better protective measures for people living in areas prone to natural disasters.

· INGOs call for an SEDP for 2006-2010 that builds provisions for social factors into all economic plans and development activities, to prevent harm and to maximise benefits.

· INGOs are concerned that key documents including Prime Minister’s Directive 33 and the Government report for the 2004-CG meeting continue to refer to HIV/AIDS as a social ‘evil’ in common with crime and drug use. The National Strategy on HIV/AIDS Prevention and Control establishes a clear basis for responding to HIV/AIDS as a development issue involving the whole of society.

· INGOs look forward to supporting implementation of the 2006-2010 SEDP, in particular at the provincial level and below. Vietnamese non-governmental organisations can play many roles that are complimentary to government, as already seen in rolling out CPRGS, HIV/AIDS care at the community level, implementation of micro-finance programs, parent-teacher associations, and water users’ associations.

Session II: Strengthening Viet Nam’s competitiveness and integration with the global economy

Status for WTO accession and challenges in implementation

Background

In the coming year Viet Nam aims to complete negotiations for entry to the World Trade Organization (WTO). INGOs consider that membership could help Viet Nam benefit from international trade, supporting its efforts to reduce poverty. However, the demands from some donor countries for excessive liberalization of imports and foreign investments, denying Viet Nam access to the very instruments they use to protect their own industries, makes this by no means certain. Poor men and women are least equipped to take advantage of market opportunities, and are the most vulnerable to competition from imports and shocks. CG members must provide, and make publicly available, both technical assistance for entry and studies of the likely impact of accession.

Key issues

Potential poverty impacts of WTO accession must be considered and factored into both negotiations and implementation

Despite Viet Nam’s excellent record in growth and poverty reduction, Viet Nam’s economy is not yet strong enough to be able to withstand significant external shocks. In addition to ensuring an adequate system of social policy is in place to deal with negative consequences of accession and liberalization, INGOs in Viet Nam believe it is essential to mitigate the possible negative effects of accession before Viet Nam joins the WTO, rather than taking action only once damage has been done.

INGOs are working with the Ministry of Agriculture and Rural Development and other Vietnamese partners to study the potential impacts on groups of the poorest farmers in various provinces. However, by itself, this effort is insufficient. The World Bank must urgently complete and make public its long-delayed Poverty and Social Impact Assessment of WTO accession.

Viet Nam’s public and private sectors need access to information to prepare for potential impacts of accession. At present, the level of knowledge and understanding in Vietnamese society about possible benefits – and costs – of WTO membership is at a very low level. Government and the international community need to urgently work to increase the level of knowledge of the effects of WTO membership; not least to build understanding and support for measures likely to be required to deal with some of the negative impacts.

Developed country members must allow Viet Nam to accede with a deal that allows Viet Nam to protect the interests of poor men and women, and poor farmers in particular

If donor countries deliver on the promises they made at the start of the Doha Development Round, in particular by improving access to their markets and cutting domestic subsidies in line with the demands being made of Viet Nam, the benefits of membership to Viet Nam and other developing countries could be substantial.

Unfortunately, progress in the round so far as been disappointing, and recent direct talks in Geneva by Oxfam with WTO negotiators of several of the countries present at the CG indicate that they intend to complete deals with Viet Nam which will not allow Viet Nam to protect the interests of its poorest citizens, which will drive down tariffs to levels significantly lower than some of Viet Nam’s neighbours, and which will not allow Viet Nam access to provisions (such as SSGs and TRQs) that are available to existing developing country members of the WTO.

INGOs in Viet Nam believe Viet Nam’s negotiating team is doing a good job, but they have few cards to play. Members of the international community in Viet Nam must urge their capitals to honour the spirit of commitments they have made.

Specific INGO recommendations include:

• Agricultural tariffs should be bound at a rate which allows Viet Nam to protect the interests of its poorest farmer and rural workers, and which is not lower than other ASEAN WTO members.
• Viet Nam should not be asked to make greater commitments on the scale and timing of reductions in domestic support and export subsidies than those made by other developing countries, or those agreed in current INGO negotiations. In this regard, several donor countries that are ‘subsidy superpowers’ need to put their own houses in order, and allow Viet Nam and other developing countries fair access to their markets.
• Viet Nam must be able to use all the instruments available to other developing-country WTO members to further protect vulnerable farm sectors; these measures include tariff rate quotas, the current WTO Special Safeguard (SSG) provision, and the new provisions currently under negotiation at the WTO (special safeguard mechanism, and special products).
• Industrial tariffs should not be bound at an average rate of less than 17%, which may already mean the loss of manufacturing jobs.
• Viet Nam should not be asked to renounce policy instruments that enable it to increase the development impact of foreign investment, such as requiring transfer of technology.
• Viet Nam should have sufficiently long transition periods, and technical support to achieve compliance with the Agreements on Technical Barriers to Trade, Sanitary and Phytosanitary Measures, and Customs valuation.
• Donor country members of the WTO should not include ‘non-market economy’ provisions that restrict ‘most-favoured nation’ rights.
• Provisions in the Viet Nam-United States Bilateral Trade Agreement that go beyond WTO requirements – for example on the burden of proof for ‘market disruption’, and on intellectual property related provisions that could inhibit Viet Nam’s ability to access inexpensive generic drugs – should not become a part of the accession package.
• Intellectual property provisions should not allow patenting of life forms – including crop seeds – and must ensure access to affordable generic ARV drugs for poor HIV-positive people

Report on recent GoV anti-corruption initiatives

INGOs welcome and support the initial analysis of the current situation and proposed solutions completed by the Government Inspectorate

The recent discussion paper of the Government Inspectorate under the Ministry of Justice provides an important introduction to the current situation and proposed solutions for fighting corruption in Viet Nam. The experience of INGOs in Viet Nam confirms the core analysis of the Inspection Research Institute in relation to the proliferation of petty corruption, such as unofficial payments related to administrative and social services.

Ongoing INGO commune budgeting research to inform the Integrated fiduciary assessment and public expenditure review (IFA-PER) has highlighted examples of the effects of corruption on some of Viet Nam’s poorest people.

The identified trend toward an increasing incidence and sophistication of serious corruption is also concerning.

Concrete strategies should emphasise public participation in preventing and addressing corruption

INGOs strongly support the emphasis on prevention over punitive responses. INGOs particularly welcome the suggestion that combating corruption requires the participation of the whole of society, including improved public awareness, a strengthened role for the mass media, and the development of effective mechanisms by which people may participate in preventing and addressing corruption. This analysis should be reflected in the concrete strategies that are adopted.

In our experience, bureaucratic discretion and lack of transparency create conditions for corruption. The strengthening legislative and supervisory role of representative bodies including the National Assembly and to a lesser extent the People’s Councils gives us cause for significant optimism. However, this positive tendency is still hindered by a lack of timely promulgation of clear and practical implementing guidelines by related authorities, and of consistent implementation by all localities, sectors and levels.

Risks may in fact increase with decentralisation. There is also a risk that attempted solutions may actually increase corruption, for example if the reduction of state ownership leads to increased ownership by those with privileged access to information and to decision-making processes.

INGOs acknowledge that these are difficult issues common to most countries at a similar level of development, and which can only be addressed through effective, determined and adequately resourced Vietnamese leadership. INGOs are willing to support partners at all levels in Viet Nam in their actions to address corruption and improve transparency and accountability.

Session III: Further improvement of ODA effectiveness, looking towards the 2^nd High
Level Forum on ODA harmonisation

Background

In 2004, INGO grant assistance disbursed in Viet Nam is expected to exceed USD 100 million. The limited data available on INGO disbursement indicates generally effective procedures based on a flexible and decentralised approach, working closely with partners at provincial and lower levels.

Harmonisation is taking place between INGOs, particularly between the members of the Save the Children Alliance, and the member organisations of Oxfam International. There is also some discussion about practical aspects including payment of allowances to partners and participants in project activities. The VUFO-NGO Resource Centre has been established by INGOs to support better information sharing between INGOs and with Vietnamese partners.

Noting the ongoing efforts of Government and donors, INGOs feel the time is now right to move from vision and planning to definite action on improving ODA effectiveness and in reducing transaction costs. International sources suggest that, after taking an early lead in the period leading up to the Rome High Level Forum, Viet Nam is now in danger of falling behind other countries in this regard. Donors and Government share a responsibility to ensure that the potential gains of improved ODA effectiveness and efficiency are maximised.

Key issues for ODA management and impact

Effective poverty reduction is the ultimate test of ODA effectiveness

As the focus moves to the 2006-2010 SEDPs, and as Viet Nam continues to integrate in the global economy including anticipated WTO accession, there must be a sustained and conscious effort by all ODA stakeholders to maintain a focus on poverty reduction impact as the real ‘main game’ of our work. Past gains in poverty reduction must not be diminished; future efforts should incorporate and build on earlier efforts of Government, Donors and NGOs to incorporate a poverty-reduction focus in the CPRGS.

INGOs consider that ODA efficiency and effectiveness, while related, are not the same thing. ODA effectiveness and harmonisation measures must not become ends in themselves, but serve the fundamental goal of realising livelihood rights for the people of Viet Nam – the reason why transaction costs, disbursement rates and development results matter.

To achieve this, a substantial proportion of ODA will need to be allocated to the sectors and areas with the greatest numbers and proportions of the poor, including agriculture and rural development. Infrastructure development must take into account poverty, social and environmental impacts, as well as recurrent costs, including clear maintenance plans and human resource development. Increased investment in social development is required.

Human resources at the provincial and local levels must be further developed

Whatever model, mechanism or modality is selected, provincial and local management capacity will be critical to ODA outcomes. This does not just mean more training courses and study tours. It requires a sustained and strategic investment in real human development in the context of ongoing structural change and appropriate decentralisation to improve vertical and horizontal management and information sharing linkages, together with ongoing development of people’s participation and downwards accountability.

As donors simplify procedures and develop new modalities, including budget support at the provincial level, a capacity building programme at the provincial level must be developed to ensure that both ODA and increasingly decentralised State budget funds are used as effectively as possible. Absorptive capacity at this level would improve disbursement rates and impact. Much more attention also needs to be paid to roles and capacity at district and lower levels.

People’s participation, transparency and downward accountability should be considered as fundamental drivers of effective and efficient ODA and State budget utilisation

‘Supply-side’ factors alone cannot ensure the efficiency and effectiveness in ODA and State budget allocations. Strengthening local level mechanisms for people’s participation will ensure better resource allocations and outcomes.

This requires continuing development of the system of local electoral representation, focused on the strengthened role, independence, authority and electoral accountability of People’s Councils.

A renewed focus on Grass Roots Democracy is also needed. This requires strong leadership from the highest levels, utilising proven communication channels through the Party and Fatherland Front at all levels together with national and local media to ensure widespread awareness of citizens’ rights to information and participation. ODA planning and implementation should incorporate key processes of grass roots democracy.

Effective utilisation of ODA requires the involvement of diverse partners

A wider range of partners should be included in ODA implementation, appropriate to specific issues, sectors and levels of intervention. This should include both governmental and non-governmental partners.

In particular, Vietnamese professional, technical, social and community-based non-governmental organisations may offer comparative advantages in addressing difficult social issues and reaching vulnerable groups, due to their comparative flexibility, dynamism and responsiveness. This could be supported by clearer legal and policy definitions of the roles of existing and emerging Vietnamese non-State actors in social development.

ODA harmonisation and effectiveness efforts should address elimination of non-market conditions in international procurement through untying aid

In addition to high transaction costs and increased disbursement rates, emphasis should be placed on improving ODA efficiency and strengthening the local economy by eliminating non-market procurement conditions requiring Viet Nam to purchase ODA inputs from donor countries. Consistent procurement procedures should be applied for ODA and State budget investment.