MULTI ANNUAL STRATEGIC PLAN VIETNAM 2008 – 2011
Dutch Development Cooperation policy
The current Dutch policy for development cooperation is based on the policy letter Our Common Concern. Investing in Development in a Changing World of October 2007. The letter divides the partner countries in three profiles. Vietnam is in the third profile of countries with a broad based relationship where Official Development Assistance no longer lies at its core.
Profile 1: Accelerated achievement of MDGs
The countries in profile 1 generally have a stable political and security situation with established institutions, but they also often have an intractable and widespread poverty problem. They are lagging behind when it comes to achieving the Millennium Development Goals. These are Bangladesh, Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Kenya, Mali, Mongolia, Mozambique, Nicaragua, Rwanda, Senegal, Tanzania, Uganda, Yemen and Zambia.
Profile 2: Security and development
The emphasis in this profile is on tackling the causes of fragility, inequality and conflict-sensitivity. The main aim is to enhance the legitimacy and capacity of government to enable it to maintain security and provide essential social services. The countries are Afghanistan, Burundi, Colombia, DR Congo, Guatemala, Kosovo, Pakistan, Palestinian Territories and
Sudan.
Profile 3: Broad-based relationship
Countries enjoying solid economic growth, which are making most progress on the Millennium Development Goals, are ready for a growing range of relationships with the Netherlands and other countries. Development cooperation, though still a part of policy, no longer lies at its core. Many of those countries have already reached the level of prosperity of a (low) middle-income country, or on course to do so in the near future. The countries are Egypt, Georgia, Indonesia, Moldova, Vietnam, South Africa, Suriname.
The multi annual strategic plan for Vietnam
The Dutch bilateral development activities will be clustered around two major priorities: growth and distribution and sustainability, energy and climate. Broadening our bilateral relations does not only require financial means, but should also focus on the exchange of knowledge, ideas and experiences. The Embassy intends to develop itself more as a network broker and less as a financier.
The Dutch government is not the only actor, instrumental in broadening bilateral relations. Although they do not, or only partially, act under the responsibility of the Embassy, representatives from the private sector, civil society, knowledge institutes and universities and trade promotion, financial sector and educational organizations will also contribute to the broadened partnership. It is our ambition to further strengthen the structure and the focus of Dutch activities in Vietnam.
Guiding Principles
The following principles will guide the Embassy’s interventions during the coming four years;
1. At the end of this Multi Annual Strategic Planning period, the Embassy will be active in the priorities growth and distribution and sustainability, energy and climate. In the health sector, assistance will be limited to HIV/AIDS. The water sector will focus on private sector cooperation and in the sector environment, the focus will be on climate change. New ODA activities will be focused on achieving those MDGs which lag behind or where the Netherlands has a comparative advantage. This implies a focus on sustainability and environment, clean water and sanitation and HIV/AIDS.
2. The Netherlands is a reliable donor. Existing ODA commitments in the sectors water, forestry/sustainability and health will be respected. This implies that the Embassy will have current obligations of 11 million Euro in 2011.
3. General budget support will be phased out: 6 million Euros in 2008 and a final contribution of 3 million Euros in 2009.
4. A number of crosscutting activities, such as anti-corruption, capacity building, public finance management and public administration reform are eligible under the broad-based relationship.
5. The new partnership also offers chances for intensified political cooperation, including human rights and good governance. Activities will be undertaken both in the framework of the EU (human rights dialogue) and on a bilateral basis (e.g. seminars on death penalty and International Criminal Court).
6. There is a huge demand for strengthening capacity. This will be done in existing sectors as well as outside the sectors through the Netherlands Fellowship Program (NFP) and Netherlands Program on Institutional Strengthening of Post secondary Education and Training (NPT/NUFFIC). Existing and new forms of cooperation between Vietnamese and Dutch universities and knowledge institutes will be supported.
7. Private sector development matches pre-eminently with the growth and distribution theme. Apart from the ongoing activities, new activities will be identified, focusing on the existing sectors and/or focused on strengthening the regulatory framework, reforming the financial sector, public private partnerships and corporate social responsibility. Existing relations (FMO) as well as new activities (Schokland pilot) will be instrumental.
8. Access to innovative policy instruments will be widened (e.g. Public Private Partnerships).
9. The relations in trade and investment on the one hand and agriculture and fisheries on the other will be further strengthened. Existing ODA funds such as PSOM, ORIO and trade promotion instruments like 2g@there will provide the basis for this objective. The existing and new activities in the sectors, financed by ODA delegated funds, will also be assessed on possible involvement for Dutch non-state actors. The available financial means and available human resources limit our ambitions. We will focus on better coordination between existing programs, instruments and actors.
10. The Embassy will create a so called Vietnam Facility which will promote activities involving different actors in the Netherland: other ministries, knowledge institutions, private sector, civil society and other organizations. The underlying principle will be the Embassy’s role as a broker and initial financier, but the actors concerned will take over responsibility for ensuring the sustainability of their common activity. In other words: the Embassy provides seed money, but success will very much depend on the actors sustained funding and involvement.
11. Further harmonization and alignment will take place within the framework of the EU Code of Conduct and the Paris Declaration/Hanoi Core Statement. An increasingly complex ODA regulatory framework, a low level of disbursements and a shift in policy of other donors sometimes complicates those efforts. Cooperation with multilateral partners presents a mixed picture. The UN is engaged in an internal reform process (One UN), while the World Bank (WB) and the Asian Development Bank (ADB) have their own agendas with a low focus on human rights/governance issues of development (WB) or insufficient (administrative and policy) capacity (ADB). Prior to embarking on financing activities through multilateral channels, a clear assessment of pros and cons will be made.
Strategic choices
By the end of 2011 the Embassy will have refocused its activities on growth and distribution and sustainability, energy and climate. These priorities are aligned with Vietnam’s Socio-Economic Development Plan (SEDP) 2006/2010.
Within these priorities, the Netherlands will discontinue its ODA-involvement in the health sector (except in HIV/Aids), refocus its activities in the environment sector on climate change and look for more private sector involvement in the water management sector. In the sector rural water and sanitation, the Netherlands will remain a silent partner.
The growth and distribution priority will support Vietnam’s efforts to further develop towards a market-economy by strengthening trade and investment relations and by creating an enabling environment for the private sector. Taking into account the relatively fair income distribution, the focus will be more on growth than on distribution, and will mainly involve non delegated funding.
As for the sustainability, energy and climate priority, we will consider responding to calls from the Government of Vietnam to support climate change related initiatives, such as the forthcoming Vietnam National Strategy and Action Plan on Climate Change and Sustainable Development. Specific Dutch knowledge will be offered where the Netherlands has a comparative advantage.
A. Crosscutting themes
Governance and government reforms
In this field, the Netherlands aims to support reform policies trough general budget support until 2009, better anti-corruption through improved governance and transparency, improved legislation and implementation, improved economic governance, enhanced budget transparency and alignment with international budgeting practices, good governance as an objective of better trained civil servants and good governance through administration reform in MARD.
Political cooperation
Dutch objectives here include strengthening political cooperation, improved respect for human rights, improved structure and content of dialogue and progress in the field of civil and political rights. Several activities are envisaged here, with bilateral and other forms of
Culture, Education, Tourism, Sports and Press
Here, the Netherlands wishes to strengthening through more and better exchanges of
Dutch culture through participation in recurring events such as the EU Film Festival, EU Music and Jazz festival as well as ad hoc cultural activities such as classical or modern Dutch music, performing arts and literature. The guiding principle for support is that activities will not only promote Holland but are also in the interest of/beneficial to Vietnam. We will promote cultural exchange in performing arts such as dance and music through supporting Vietnamese and Dutch cultural institutions in establishing sustainable contacts and implementing joint programs. Moreover, we will facilitate as a broker for Dutch universities/education institutes seeking for (strengthening) cooperation.
B. Growth and distribution
Economic cooperation
Broadening the bilateral relationship will be most feasible and visible in the area of trade and investment. In comparison to ODA funding, the budget for trade promotion instruments is limited. Although there are efforts to integrate the private sector in ODA programs and instruments, this will not be easy given procurement legislation and OECD-DAC compliance. In some cases (e.g. PPPs in water, NPT) a proper balance can be found. Apart from quantity, the quality of the growth also matters. The Embassy will actively promote CSR-principles.
The ORET –now ORIO- program has been very successful in Vietnam, particularly in the water, energy and maritime sectors. The availability of “ORIO new style” will be instrumental in strengthening growth and development.
Agriculture and fisheries
The Netherlands is well positioned to support Vietnam in improving its performance in the agricultural and fisheries sectors. Our available expertise as well as our strong relationship with the Ministry of Agriculture and Rural Development are important assets that will help us. In order to upgrade capacity, the role of the private sector and knowledge institutes should be strengthened. The Embassy will continue to implement existing trade promotion instruments (PSOM, 2g@there) in the agro-industry.
Improving food quality and animal health (including containing Avian Influenza) is another area for cooperation. Ensuring an enabling environment is vital for further growth. Support to the Public Administration Reform Process in MARD as well as supporting sustainable agriculture are in line with our future policy themes as well as with available expertise in the Netherlands.
Private sector development
The private sector becomes increasingly important for Vietnam’s economic development. It attracts almost 20% of FDI (2006) and creates annually over 1.5 million jobs. Vietnam has made progress over the last two years in upgrading its legal framework for business development (Unified Enterprise Law and Common Investment Law). According to business surveys, the main constraints to private sector development are access to finance and land, complicated and time-consuming bureaucratic procedures, infrastructure and skilled labor.
The Netherlands is well positioned to support Vietnam in specific areas of PSD. Although not primarily focused on trade promotion, synergy could be created by a focused application of instruments in this area (e.g. Schokland Agreement financial sector/IFC/MPDF).
C. Sustainability, energy and climate
Water management; clean water and sanitation
Dutch engagement will be focused on the following two objectives:
Provide clean drinking water and sanitation to rural and poor households
Enhance opportunities for involvement of Dutch companies and experts.
In practice, the Netherlands will not follow up the current activities in the water management sector, but rather look at initiatives where other actors, such as academia and the private sector, stand to benefit. In drinking water and sanitation, the Netherlands wishes to remain a silent partner. PPPs, such as the ongoing ones in Da Nang and Ho Chi Minh City, could be duplicated in other areas. The water sector can provide several business opportunities for Dutch institutions and experts (consultancies, education and training services, goods and equipment, investment), especially in areas where the Netherlands has niche knowledge.
Climate and energy
Vietnam’s climate change vulnerability will require high investments in disaster prevention and relief efforts and might have a negative impact on sustainable growth. The challenge is to focus our multi annual support to addressing the issues of climate change, renewable energy development and environmental protection. The activities under this priority will be financed under the sector heading “environment”. The current activities in forestry and wetlands will be discontinued, an the focus will be on still to be defined Vietnamese requests for support towards climate change and energy, mainly where the Netherlands has a comparative advantage. In energy, this Embassy will support MARD/SNV with its Biogas program which aims at building 140.000 plants till 2011.
D. Health
Dutch support will increasingly align itself with the strategic objectives and financing modalities of the Vietnamese health sector, while concentrating on the priority health challenges where Dutch support has specific added value. Especially in the field of primary prevention of HIV/AIDS through modern harm reduction strategies (interventions for injecting drug users), Dutch approaches are particularly effective.
