## _cr0425 ## Source details **Canonical URL:** [_cr0425](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2004/_cr0425.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2004/_cr0425.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2004/_cr0425.pdf.json) --- ### Preface — National commitment and institutional arrangements - Poverty reduction is a core Government objective; Vietnam committed to the Millennium Development Goals and National Summit (September 2000) objectives. - CPRGS is integrated into the 10-Year Socio-Economic Development Strategy (2001-2010), the 5-Year Plan (2001-2005) and Annual Plans. - Steering Committee established (Decision No: 825/QD-TTg; Hanoi September 20th 2002) to implement CPRGS, PRGF and PRSC with legal bases including the Law of Government organization dated 12 December 2001. - Steering Committee composition (Article 2): - Head: Deputy Prime Minister Nguyen Tan Dung. - Standing Deputy Head (PRGF and PRSC): 01 Deputy Governor of the State Bank of Vietnam. - Deputy Head (CPRGS): 01 Vice Minister of Planning and Investment. - Members: Vice Ministers from multiple line ministries and representatives from Government’s Office, Minorities Committee, Statistics Directorate General, Committee for Enterprise Renovation & Reform, CPV’s Economic Committee and the Women Association Central Committee. - Tasks (Article 3, summarized): - Study/recommend guidelines, coordinate negotiations with IMF, World Bank and donors; supervise and monitor implementation; incorporate CPRGS/PRGF/PRSC into Government routine; coordinate donors. - Inter-ministerial working groups (Article 4): - Two groups: PRGF/PRSC (headed by State Bank’s Director for International Relations) and CPRGS (headed by a Department-level official of MPI); function as project managing units with budgets and TA. ### Macroeconomic and poverty performance (1990s / around 2000) - Growth and macro outcomes: - Average annual GDP growth 1991–2000: 7.5 percent. - GDP growth between VLSS surveys (1992-93 and 1997-98): 8.4 percent. - Five-year average growth rates of GDP (1986-1990; 1991-1995; 1996-2000) %: 4.4, 8.2, 6.9. - Agriculture, Forestry, Fishery growth %: 3.1, 4.1, 4.3. - Construction and Industry growth %: 4.7, 12.0, 10.6. - Services growth %: 5.7, 8.6, 5.75. - Exports, billion US$: 2.4, 5.4, 14.5 (periods shown in table). - Imports, billion US$: 2.7, 8.1, 15.2. - Domestic savings as percentage of GDP, %: 8.5, 22.8, 27.0. - Gross fixed capital formation rose to 29 percent of GDP by 2000 from 14.4 percent in 1990. - Per capita GDP estimated about US$400 in 2000. - Poverty and human development: - National poverty (VLSS total poverty incidence): 58% in 1993 and 37.4% in 1998. - Food poverty (2100 Kcal): 25% in 1993 and 15% in 1998. - Using international poverty standards: overall poverty incidence declined to approximately 32% in 2000. - Per capita food production: 303 kg in 1990 → 444 kg in 2000. - Revenues from agricultural exports: around US$1 billion in 1990 → US$4.3 billion in 2000. - Human Development Index: 0.456 in 1990 (ranking 120th); 0.696 in 2000 (ranking 101st out of 162). - Life expectancy: 64 years in 1990 → 68 years in 2000. - Child malnutrition: 51.5% in 1990 → 33.1% in 2000. - Under-five mortality: 81/1,000 → 42/1,000 live births. - Maternal mortality: 110/100,000 → 100/100,000 live births. - Net primary enrollment rate: 95%. - In 2000: 88% of communes had access to electricity; 95% of communes accessible by car. ### Achievements in the 1990s and remaining vulnerabilities - Achievements: - Quelled hyperinflation; maintained macro stability. - Halved the poverty rate during the 1990s. - Significant infrastructure and sectoral improvements (roads, ports, telecom, irrigation). - Employment creation averaged 1.2 to 1.3 million people per annum; private, collective and co-operative sectors absorb ~90% of new entrants. - Remaining challenges: - Poverty concentrated in rural, mountainous, remote, isolated and ethnic minority areas; over 90% of the poor live in rural areas. - Many households live just above the poverty line and are vulnerable to shocks; annual emergency relief need: between 1 and 1.5 million people. - Income inequality: gap between richest and poorest quintiles rose from 7.3 times in 1996 to 8.9 times in 1999. - Macroeconomic and public finance weaknesses: incomplete taxation system; revenue concentration in crude oil exports and import taxes; low domestic private mobilization. - Financial sector weaknesses: weak credit analysis, high bad debts. - Environmental degradation, natural resource overexploitation, and social problems (child malnutrition, untreated disabled children, child labor, HIV/AIDS spread). ### CPRGS major objectives and policy directions - Core objectives: - Promote rapid and sustainable economic growth with social progress and equity; prioritize agriculture and rural areas; reduce regional gaps; focus on ethnic minorities. - Create equal business environment for all enterprises including FDI; encourage SMEs. - Continue structural reforms: SOE reorganization/efficiency, state budget restructuring, banking reform, trade liberalization (AFTA/WTO preparations). - Expand social protection and safety nets; prioritize health, education, environmental protection, HIV/AIDS prevention, and gender equality. - Public administration reform in four areas: institutional reform, organizational framework, civil service quality, and public finance reform. - Establish qualitative and quantitative socio-economic and poverty indicators disaggregated by gender and ethnicity for monitoring. ### Policy packages and sectoral measures (summaries) - Macroeconomic and public finance: - Maintain macro stability with prudent monetary and fiscal stances; improve taxation policy and broaden tax base; balance capital and current expenditures to be pro-poor. - Mobilize domestic savings to exceed 30% of GDP (target). - Legal, governance and SOE reform (Part III & 5): - Implement Enterprise Law revisions; promulgate Competition Law; apply corporate governance practices within 18 months. - Classify SOEs for restructuring: merge, equitize, privatize or liquidate as appropriate; establish asset management companies for non-performing SOE debts. - Prepare policies for redundant workers (retraining, basic salary during job search, unemployment benefits, early retirement options). - Strengthen corporate transparency: accounting, auditing, financial reporting. - Trade and FDI: - Continue open-door policy; implement AFTA commitments; prepare for WTO accession and bilateral agreements. - Remove non-tariff barriers; reduce import taxes per AFTA roadmap; encourage FDI in export-oriented, high-tech and labor-intensive industries. - SME and private sector development: - Implement Decree No. 90/2001/ND-CP; establish Office of SMEs; ensure access to credit, land-use rights and business development services. - Provide preferential taxes and financial mechanisms for SMEs, especially women-managed enterprises. - Infrastructure (large-scale and rural): - Mobilize at least VND 840,000 billion (or about US$ 60 billion) for 2001-2005 development investment; one third foreign sources, two thirds domestic. - Prioritize transport, irrigation, electricity, education, health and rural infrastructure to reach poor communes. - Targets: provide essential infrastructure to 80% of poor communes by 2005 and 100% by 2010; expand national transmission grid to reach centers of 900 poor communes by 2005; ensure 90% of communes provided with electricity (target context). - Agriculture, rural development and fisheries: - Ensure food security; diversify production; expand extension and R&D; aquaculture area: 1.2 million hectare with total production ~2.6 million tons, shrimp ~300 thousand tons. - Strengthen rural finance: Bank for the Poor funds lent reached VND 5,500 billion (1992–2000 figures in aggregate programs). - Education and health: - Universalize primary and lower secondary education by 2010; literacy targets: 95% of illiterate women under 40 by 2005 and 100% by 2010. - Health targets (by 2005 / 2010): under-1 mortality 30‰ / 25‰; under-5 mortality 36‰ / 32‰; child malnutrition <25% / <20%; maternal mortality 80/100,000 by 2005 and 70/100,000 by 2010 (mountainous areas 100/100,000). - Health service expansion: by 2005 100% inter-commune polyclinics with doctors; 65% of communes with doctors (mountainous: 50%); 100% commune clinics with midwives. - Social protection and safety nets: - Expand formal social safety net; reform social insurance; halve the number of people falling back into poverty due to calamities and risks by 2010. - Develop the Emergency Relief Fund and community-based insurance pilots. ### Resource mobilization and investment scenarios (2001-2005) - Total planned mobilization 2001-2005: - At least VND 840,000 billion (about US$ 60 billion), 1.5 times 1996-2000 actual implementation. - Composition: one third from foreign sources; two thirds domestic. - Sectoral shares of total development investment resources: State sector 55.5%; Domestic private sector approximately 26.2%. - State budget and public expenditures: - State budget resources estimated total VND 630,000 billion (or US$ 45 billion) for 2001-2005. - Capital expenditures: VND 185,000 billion. - Current expenditures: VND 445,000 billion. - Funds for national targeted programs and large projects: about VND 60, 000 billion. - Mobilization projections (selected table figures, at 2000 price): - Total 1996-2000 implementation: 555 (VND thou. billion) → Mobilization ability 2001-2005: 840 (100.0%). - Domestic capital 320.5 (57.7%) → 561 (66.8%). - Foreign capital 234.5 (42.3%) → 279 (33.2%). - State sector (public investment) 295.8 (53.3%) → 467 (55.5%). - Private sector 259.6 (46.8%) → 373 (44.4%). - Domestic private sector: 121.6 (21.9%) → 220 (26.2%). - FDI: 138 (24,9) → 153 (18.2%). - Two allocation scenarios for 2001-2005: - Scenario 1: Total VND 840.0 thousand billion (US$ 60 billion) — minimum quantitative objectives achievable but quality constrained. - Scenario 2: Total VND 980.0 thousand billion (US$ 70 billion) — enables both qualitative and quantitative achievement. - Scenario 2 requires mobilizing an additional VND 140 thousand billion; 50% of additional funding expected from domestic private sector/households; remainder from international community and foreign investors. ### State budget requirements and fiscal framework - State budget capital expenditure requirement: about VND 190-200 thousand billion (2001-2005). - Examples: Agriculture VND 50-60 thousand billion; Transport VND 60-70 thousand billion; Education/Health/Urban services VND 50-65 thousand billion. - Recurrent expenditure requirement: about VND 450-460 thousand billion (not including principal repayment) for 2001-2005. - Sector highlights: Health and social spending VND 100 thousand billion; Training and education about VND 110-120 thousand billion. - Fiscal targets and assumptions: - Mobilization rate of the state budget about 20% of GDP; revenues from taxes and fees about 18%. - Assumed GDP growth rate: 7.5% per year on average. - Estimated state budget revenues for 2001-2005: VND 620 thousand billion; revenues from taxes and fees VND 560 thousand billion. - Expenditure envelope (2001-2005 est): - Estimated state budget expenditure: about VND 630 thousand billion. - Investment: VND 185 thousand billion. - Current: VND 445 thousand billion. - Poverty-related five-year expenditure (2001-2005): estimated about VND 420 thousand billion (two thirds of total budget expenditure). ### Poverty reduction financing (2003-2005 selected) - Total expenditure requirement to meet selected social and poverty reduction objectives (2003-2005): VND 84,475 billion. - Recurrent: VND 54,002 billion. - Capital: VND 30,473 billion. - Yearly totals: - 2003: 28,330 - 2004: 27,870 - 2005: 28,275 - Sectoral allocations 2003-2005 (selected totals): - Agriculture: Total 14,681 (Recurrent 8,808; Investment 5,872). - Health: Total 11,558 (Recurrent 10,008; Investment 1,550). - Education: Total 13,664 (Recurrent 5,438; Investment 8,226). - Transportation: Total 8,955 (Recurrent 3,141; Investment 5,814). - Labor and social insurance (All recurrent): Total 23,229. - National targeted programs total: 6,305 (Recurrent 3,153; Investment 3,153). ### National targeted programs (2001-2005) - Total estimated cost for eight national programs/projects: VND 70 - 75 thousand billion (US$ 5-5.5 billion). - Examples: Poverty reduction and employment 27 - 28; Clean water and hygienic rural environment 8.0 - 8.5; Five million hectare forestry project 10.0 - 11.0. - State budget expected to cover about one third of these programs; remainder from ODA, loans and community mobilization. ### Implementation mechanism, monitoring and evaluation - Centralized organization with close coordination among Government Office, MPI, MOLISA, MOF, State Bank, line ministries, provinces and social organizations. - MPI assigned to lead preparation, integration and oversight; an Inter-ministerial Working Unit and Secretariat to be established for CPRGS implementation, monitoring and evaluation. - General Statistical Office to conduct bi-annual household living standards survey; indicators disaggregated by rural/urban, gender, region and ethnicity. - Monitoring and evaluation coverage: - (i) effectiveness of growth and poverty reduction; - (ii) progress in resource mobilization and implementation; - (iii) impact assessment on the poor and society. - Key numeric targets and indicators (selected): - GDP in 2010 to double GDP in 2000. - Value-added growth targets 2001-2010: industry and construction 10.0-10.5% average; agriculture 4.0-4.5%; services 7.0-8.0%. - By 2010: GDP shares — agriculture 16-17%; industry 40-41%; services 42-43%. - By 2010: labour shares — industry 23-24%; agriculture 50%; services 26-27%. - Ensure domestic saving exceeds 30% of GDP. - Reduce incidence of poverty by two fifths (international standards) by 2010 and by three fifths (national standards) by 2010 relative to 2000. - Provide basic infrastructure to 80% of poor communes by 2005 and 100% by 2010. - Expand national transmission grid to 900 poor commune centers by 2005. - Access to clean water targets: by 2005 80% of urban and 60% of rural population with 50 liters/person/day; by 2010 85% rural with 60 liters/person/day. ### Job creation and labor targets - Job creation targets: - Provide new jobs for approximately 1.4-1.5 million people per annum. - Increase proportion of women in newly created jobs to 40% by 2005 and 50% by 2010. - Increase proportion of trained workers in total workforce to 30% by 2005 and 40% by 2010. - Increase rural working time utilization to 80% by 2005 and 85% by 2010. - Reduce urban unemployed share to about 5.4% by 2005 and under 5% by 2010. - Monitoring indicators include number of jobs created annually, ratio of female workers in new jobs, percent of trained workers, rural working time coefficient, and rate of urban unemployment. ### Social safety nets, vulnerability reduction and disaster response - Expand social protection and safety nets; develop community-based insurance and pilot crop/animal insurance. - Establish Fund for Recovery from Disaster and Emergency Relief Fund. - Objectives to halve number of people falling back into poverty due to calamities and risks by 2010. - Prioritize support for ethnic minorities, disabled, elderly without support, victims of toxic chemicals, HIV/AIDS patients and orphaned children. ### Environment, resettlement and project management for infrastructure - Environmental and social impact evaluation mandatory for large-scale infrastructure projects; incorporate environmental funding into project costs. - Resettlement policies: compensation in cash/housing/land; investor obligations for retraining and job priority for displaced farmers; resettlement quarters must have appropriate infrastructure. - Maintenance of infrastructure: current maintenance spending low (footnote data preserved): - Regular spending on maintenance for irrigation works as low as 2% of total invested capital for irrigation; 8% in education projects; 10% in health care projects. - Annual road network maintenance spending sufficient for only 30% of demands. - Policies to mobilize diversified funding (State budget, bonds, BOT, private sector, ODA) and to harmonize ODA disbursement and counterpart fund provision. ### Key sectoral numeric and programmatic figures (selected) - Aquaculture area: 1.2 million hectare; total production ~2.6 million tons; shrimp ~300 thousand tons. - Total investment requirement (Five Year Plan 2001–2005 preliminary): VND 840 - 980 thousand billion (US$ 60 – 70 billion). - Agriculture, Forestry, Fishery and Irrigation: VND 110 – 133 thousand billion. - Industry and construction: VND 370 – 400 thousand billion. - Transport, post, communications: VND 126 – 147 thousand billion. - Housing, public services, water supply: VND 118 – 130 thousand billion. - Education and training: VND 30 – 40 thousand billion. - Health and social affairs: VND 16 – 28 thousand billion. - State budget five-year (2001-2005) estimates (unit: 1,000 billion): - Total estimated: 630.0 (Investment 185.0; Recurrent 445.0). - Agriculture, forestry, fishery and irrigation: Total 65.8; Investment 46.2; Recurrent 19.3. - Transportation and post: Total 72.8; Investment 54.6; Recurrent 18.2. - Education, general training and vocational training: Total 114.8; Investment 14.0; Recurrent 100.8. - Health and social affairs: Total 119.0; Investment 12.6; Recurrent 106.4. *Source: PREFACE and extracts from The Comprehensive Poverty Reduction and Growth Strategy (CPRGS), _cr0425.* ### PREFACE ### PREFACE ### National commitment and strategic context - Poverty is identified as a pressing problem globally and a core objective of the Government of Vietnam. - Vietnam has declared its commitment to implement the Millennium Development Goals and poverty reduction objectives agreed at the National Summit in September 2000. - Poverty reduction is integrated into: - the 10-Year Socio-Economic Development Strategy (2001-2010), - the 5-Year Socio-Economic Development Plan (2001-2005), - Annual Socio-Economic Development Plans. - The Comprehensive Poverty Reduction and Growth Strategy (CPRGS) elaborates objectives, institutional arrangements, policies and solutions of the 10-Year Strategy and 5-Year Plan into detailed action plans. - The Prime Minister calls on ministries, sectors, government agencies, local authorities and mass organizations to reflect the objectives and institutional arrangements of the CPRGS in their annual implementation plans, and requests continued realistic and effective support from donor communities, international organizations and NGOs. ### Key macroeconomic and poverty performance indicators (1991–2000 and around 2000) - Average annual GDP growth rate for 1991 to 2000: 7.5 percent. - GDP growth rate during the period between the two living standards measurement surveys (in 1992-93 and 1997-98): 8.4 percent. - Poverty incidence according to national poverty standards: reduced to only two thirds of the 1990 rate after ten years. - Poverty incidence by international poverty standards: reduced to just half of the 1990 rate after ten years. - Per capita GDP is estimated at about US$400 in the year 2000. ### Establishment of the Steering Committee (Decision No: 825/QD-TTg; Hanoi September 20th 2002) - Purpose: To establish a Steering Committee for implementation of: - The Comprehensive Poverty Reduction and Growth Strategy (CPRGS); - The Poverty Reduction and Growth Facility Programme (PRGF); - The Poverty Reduction Support Credit Programme (PRSC). - Legal and institutional bases cited: - Law of Government organization dated of 12 December 2001; - Proposals and opinions from the governor of State Bank of Viet Nam; the Minister of Planning and Investment; and other line ministries and agencies. ### Steering Committee composition (Article 2) - Head of the Committee: Deputy Prime Minister Nguyen Tan Dung. - Standing Deputy Head of the Committee in charge of PRGF and PRSC: 01 Deputy Governor of the State Bank of Vietnam. - Deputy Head of the Board for CPRGS: 01 Vice Minister of Planning and Investment. - Members: 01 Vice Minister each from the following Ministries: Finance, Trade, Labor, War Invalids and Social Affairs, Foreign Affairs, Justice, Agriculture and Rural Development, Industry, Transports, Health, Education and Training, Construction, Science, Technology, Resouces and Environment, Interior; 01 representative each from the following: Government’s Office, Minorities Committee, Statistics Directorate General, Committee for Enterprise Renovation &Reform. 01 representative each from CPV’s Economic Committee and the Women Association Central Committee. ### Steering Committee tasks (Article 3 — summarized) - Study and recommend guidelines, policies and measures for implementation of CPRGS, PRGF and PRSC; help the Prime Minister lead relevant entities in negotiation with IMF, the World Bank and other donors. - Prepare and carry out a programme for supervision and monitoring of implementation of items agreed in CPRGS, PRGF and PRSC; incorporate CPRGS/PRGF/PRSC into Government’s routine working programme; define and establish an inter-ministerial co-ordination mechanism. - Coordinate different donors, international organizations and other relevant agencies in support of implementation. - Make periodical reports to the Prime Minister on implementation and make necessary recommendations. ### Inter-ministerial working groups (Article 4) - Two inter-ministerial working groups to assist the Steering Committee: 1. Inter-ministerial working group for PRGF and PRSC: - Headed by the State Bank’s Director for International Relations. - Members include officials from Ministries of Planning and Investment, Finance, Trade, Labor, War Invalids and Social Affairs, Foreign Affairs, Justice, the State Bank, Government’s Office, Statistics Directorate General, Committee for Enterprise Renovation &Reform, and an invited member from the CPV’s Economic Committee. 2. Inter-ministerial working group for CPRGS: - Headed by a Department-level official of the Ministry for Planning and Investment. - Members include officials assigned by relevant ministries and agencies based on proposals by the Deputy Head of the Committee for CPRGS. - Both groups function as a project managing Unit with a working programme, budget and the ability to receive technical assistance. ### Roles, responsibilities and operations (Article 5 — selected points) - Head of the Steering Committee: - Organize and coordinate Committee work; authorized by the Prime Minister to respond to recommendations regarding CPRGS, PRGF, PRSC; decide on responsibility sharing and guide ministries/agencies. - Commands an assisting group led by a Deputy Head of the Government’s Office. - Standing Deputy Head (PRGF and PRSC): - Assist Head; prepare working programme; convene and organize meetings; supervise and coordinate members; lead inter-ministerial working group for PRGF and PRSC; sign relevant documents; chair meetings with IMF and WB on PRGF and PRSC. - Deputy Head for CPRGS: - Assist Head in managing and coordinating CPRGS implementation; lead inter-ministerial working group for CPRGS; sign relevant documents; chair meetings with donors and international organizations related to CPRGS. - Committee members: - Responsible to Head for implementation within their ministries; present ministry recommendations; participate in meetings; coordinate with other entities; assign one Department-level official and one expert to participate in the inter-ministerial working group for PRGF and PRSC and assign representatives to the inter-ministerial working group for CPRGS. - Inter-ministerial Working Groups: - Heads coordinate group work, convene meetings, report to Standing Deputy Head or Deputy Head for CPRGS; prepare documents for technical or policy-level sessions with WB/IMF or donors; recommend seminars, studies or specialist support as needed. ### Budget and duration (Article 6–7) - Budget support for the Steering Committee: - Partly from bank account deposit interests from disbursed amounts for PRGF and PRSC Programmes pending Government decision. - Annual allocation limits: no more than VND 200 million for each year of implementing PRGF and PRSC Programmes, no more than VND100 million for each year implementing CPRGS. - Specific spending and accounting mechanisms to be decided by the Head of the Steering Committee upon proposals by Ministry of Finance in coordination with relevant organizations; if deposit interests are insufficient, Ministry of Finance will recommend allocations from State budget in consultation with State Bank of Vietnam and Ministry for Planning&Investment. - The Steering Committee will dissolve upon completion of implementation of CPRGS, PRGF, PRSC Programmes. ### Legal effect and responsibility (Article 8 and closing) - This Decision replaces Decision No.131/2001/QD-TTg issued on August 31, 2001. - The Decision takes effect upon signature. - Ministers, Heads of ministry-level and Government’s agencies, Chairmen of the People’s Committees of provinces and cities under Central authority are responsible for implementation. *Source: PREFACE, The Comprehensive Poverty Reduction and Growth Strategy (CPRGS)* ### 6. The CPRGS sees a harmony between economic growth and measures to solve social problems. The tasks ### 6. The CPRGS sees a harmony between economic growth and measures to solve social problems. The tasks ### Overview and guiding approach - The Comprehensive Poverty Reduction and Growth Strategy (CPRGS) links targeted measures for specific poverty groups with a matrix of policies ranging from macroeconomic policies, structural adjustment, sectoral development policies and measures, to social welfare policies at all sectors and levels that must work in tandem to ensure sustainable development. - The CPRGS makes concrete the following major objectives and policy directions. ### Major objectives (as stated) - Promote rapid and sustainable economic growth coupled with attainment of social progress and equity, aimed at improving the material conditions and quality of life of all population strata; maintain rapid development of the dynamic areas and create favorable conditions for them to achieve high economic growth rates. At the same time, concentrate on developing agriculture and rural areas, ensure food security, create jobs, increase rural income; give more attention to investment and other support to disadvantaged areas; reduce the development gap between regions, pay attention to the living conditions of ethnic minority peoples. - Create an equal business environment for all types of enterprises from all economic sectors, including enterprises with foreign direct investment (FDI), regarding their access to public services and business and investment opportunities, and encourage the development of small- and medium-sized enterprises. - Continue with structural reforms to bring about a transformation of the nation’s economic structure; reorganize, renovate and improve the efficiency of state-owned enterprises (SOEs); restructure the state budget; reform the commercial banking system, reorganize and strengthen the health of financial and credit organizations; continue with trade liberalization, honoring international commitments made under the framework of AFTA, make good preparations to meet conditions for WTO accession, implement bilateral trade agreements, and so on, in order to increase the efficiency and competitiveness of the economy and meet the requirements for rapid growth and sustainable development. - Provide poor households with opportunities to raise their income by accelerating broad-based growth of agriculture, industry, and services; expand and develop markets to distribute consumer goods, improve socio-economic infrastructure; ensure equal access to basic productive and social services. - Encourage human development and reduce inequality, and give priority to health and education development, environmental protection, prevention of HIV/AIDS transmission and infection, gender equality and improving the lives of ethnic peoples. - Solve the particular problems of urban poverty with regard to employment, income and housing. Ensure that urban poor have equal access to resources, public services and basic social services. Improve the access of migrants, especially their children, to these resources and services. - Develop and expand social protection and safety nets for the poor, and for people suffering from natural calamities; and minimize the vulnerability of the people. Increase the participation of mass and social organizations in developing the social safety net. - Undertake public administration reform in four areas: institutional reform, administrative apparatus reform, renovation and improvement of the quality of the contingent of civil servants; and public finance reform to enable civil servants and the administration to change their working styles and to heighten their sense of responsibility towards their work, to provide the people with better access to public services, and to ensure social equity. Implement fully the Decree on Democracy at the Grassroots Level to improve citizens’ participation in the planning and implementation of decisions about community socio-economic development; enhance the transparency of the budget process and of the production of macroeconomic statistics. - Establish a system of qualitative and quantitative socio-economic development and poverty reduction indicators (with breakdown by gender and ethnicity) to monitor and supervise the progress of implementing the Comprehensive Poverty Reduction and Growth Strategy. ### Preparation, consultation and institutional arrangements - The preparation of the CPRGS started in June 2001 based on the Interim Poverty Reduction and Growth Strategy Paper that was approved by the Prime Minister in March 2001. - The Ministry of Planning and Investment takes the lead in this undertaking in collaboration with concerned ministries and agencies and is supported by a group of national and international consultants and broad consultation from concerned ministries and agencies, representatives of the donor community and other parties, such as the Poverty Working Group (composed of donors, government agencies and non-governmental organizations). - The Strategy Drafting Team consists of 52 members from 16 Government's ministries and line agencies. Besides, the Ministry of Agriculture and Rural Development, Ministry of Health, Ministry of Science, Technology and Environment, etc. also established their Sectoral Poverty Task Forces to contribute to the preparation and implementation of the CPRGS. The donors, international organizations and NGOs also took part in the Strategy preparation. - The CPRGS received comments from concerned ministries and agencies, scientists, mass organizations, non-governmental organizations and the donor community at various workshops at both central and regional levels to get the comments of 61 provinces and cities, and also comments at six commune and village consultations. - Four regional workshops were organized: one in Northern mountainous region, one in the Central region, one in the Mekong River Delta, and one in Ho Chi Minh City. Ministries and line agencies organized topical workshops such as Workshop Gender, Workshop on Poor Women, Workshop on Environmental Issues. Six village and commune consultations were organized by non-governmental organizations at Lao Cai, Ha Tinh, Quang Tri, Ho Chi Minh City, Vinh Long and Tra Vinh. ### Achievements in the 1990s and remaining challenges (Part I summary) - Institutional and legal reforms, structural transformation, and rapid opening to the global and regional economy helped: - Quell hyperinflation and maintain macroeconomic stability. - Achieve a high economic growth rate of 7.5% per annum on average. - Halve the poverty rate during the 1990s. - Increase per capita food production from 303 kg in 1990 to 444 kg in 2000. - Raise revenues from agricultural exports from US$ 1 billion in 1990 to US$ 4.3 billion in 2000. - Improve human development: Vietnam’s Human Development Index rose to 0.696 in 2000 (ranking 101st out of 162 countries) from 0.456 in 1990 (ranking 120th). - Despite achievements, poverty remains widespread in rural, mountainous, remote and isolated areas. Large segments live just above the poverty line and are vulnerable to negative shocks such as natural disasters, job loss, sickness, and volatile agricultural prices. - Poor health, low education, unsanitary conditions and environmental degradation hinder the poor’s ability to escape poverty. - Planned SOE reforms will create redundancies and pressure for more employment, but also opportunities for labor reallocation and competitive development among sectors. ### Strategic objectives for 2001–2010 (Part II summary) - Overall objective: significantly improve people’s material, cultural and spiritual life; lay foundations for industrialization and modernization; build a prosperous people, strong country and a just, equal, democratic and civilized society; establish institutions of a socialist-oriented market economy; protect natural resources and national culture for future generations. - Transform economic and labor force structure to raise efficiency and competitiveness; broaden and deepen international economic relations; strengthen social and economic infrastructure; improve education and training to raise human resource quality. - Economic growth must be accompanied by social progress, equity and environmental protection to create jobs, improve health, eliminate hunger, reduce poverty, and reduce social problems. Growth is necessary but must be accompanied by targeted measures to ensure the poor can access opportunities. ### Policies to create environment for rapid and sustainable growth (Part III summary) - Establish a legal environment enforcing a fair, level, and competitive playing field for all enterprises, state and private, domestic and foreign. - Eliminate unnecessary business licenses and administrative impediments; ensure equal and non-discriminatory access to capital, credit, land, new technology, and information for all enterprises. - Reorganize, renovate and improve effectiveness of SOEs; develop policies ensuring SOE investment plans align with sectoral strategies and international integration; complete the Law on Enterprise Bankruptcy; implement the government’s Decree on support to SMEs. - Continue reforming the public administration system to build a transparent and efficient administration based on the rule of law; strengthen local authorities’ management capacity, especially in economic and budget management. - Maintain macroeconomic stability: adopt a prudent monetary and fiscal stance; improve taxation policy and broaden the tax base; closely link policy, planning and budgeting; balance capital and current expenditures to ensure pro-poor outcomes; maintain appropriate inflation, exchange rate and interest rate policies that are pro-poor. - Continue open-door trade policy, gradually remove non-tariff barriers, implement commitments under ASEAN framework, Vietnam - US bilateral trade agreement, and commitments with international financial institutions. - Improve consistency and linkages between trade policy, industrial policy and exchange rate policy; strengthen coordination among concerned ministries and agencies. - Implement the Grassroots Democracy Decree; strengthen dialogue between authorities and local communities; improve legal support framework for the poor; strengthen accountability and transparency of public authorities and publish local budgets. ### Large-scale infrastructure development (Part IV summary) - Large-scale infrastructure generates spillover effects: private investment and FDI attraction, regional economic development stimulation, job creation, production cost reduction, product competitiveness enhancement — thereby creating resources for development, accelerating growth and eradicating poverty. - Despite recent achievements, Vietnam’s infrastructure remains poor and insufficient for socio-economic development and economic restructuring. Resources for infrastructure are constrained, overlapping, and not concentrated. Financial funding mechanisms are incoherent and lag reality. Shortcomings exist in project management, operation and maintenance. - Objectives and policies: - Direct large-scale infrastructure to poverty reduction and growth; develop a network that guarantees equal accessibility and use of infrastructure services by all economic sectors. - Develop infrastructure capable of receiving modern technologies and maintaining competitiveness in regional and international integration; target by 2020 to have a modern network of infrastructure services. - Enhance planning and planning management to develop infrastructure under a suitable timetable, long-term effectiveness and balanced with available resources. - Develop infrastructure to guarantee spill-over effects and extend inter-region links. - Diversify resources for infrastructure investment; formulate policies and mechanisms to mobilize maximum resources, particularly from private sector and foreign investment. - Harmonize partnership relations, diversify financial assistance means; efficiently mobilize and use Official Development Assistance (ODA) for infrastructure. - Pay attention to environment protection and resettlement solutions for large-scale projects; improve maintenance; implement cost-reduction measures for infrastructure services; improve accessibility for the poor. ### Sectoral policies and measures (Part IV summary) - Agriculture and rural development: - Ensure food security; diversify agricultural production; emphasize market research and timely information provision; increase investments in agriculture. - Link high value crop production with storage and processing facilities; promote research and efficient use of natural resources. - Expand agricultural, forestry, fishery and extension activities suited to local conditions and responsive to the demands of the poor. - Develop fisheries and diversify aquaculture; develop disaster prevention strategy to minimize losses and stabilize livelihoods and production in disaster-prone areas. - Industry and urban development: - Develop comparative advantages in labor-intensive industries and industries that utilize domestically produced agricultural, fishery and forestry raw materials. - Promote development of agricultural engineering sector for domestic and neighboring markets. - Encourage spearhead and labour-intensive industries; formulate policies to address urban poverty: legal support, job creation, credit, basic infrastructure, urban environment improvement, vocational training, and manage urban migration. - Infrastructure development: - Based on the needs of the poor, provide electricity, small irrigation works, clean water, sanitation facilities, and develop and rehabilitate transport systems, especially in poor regions. - Focus investments on transportation in the Northern mountainous region and irrigation in the Central Highlands and Central region. - Resolve housing problems for the poor, focusing on society’s vulnerable groups. - Education and training: - Continue raising quality of education and maintain universal primary and lower secondary education targets; reduce and eliminate school fees and other contributions for children from poor families and poor areas. - Ensure adequate quantity and quality of schools, classrooms and teachers; gradually consolidate general and vocational training schools. - Health: - Promote the grass-roots health system, maintain and develop community health services. - Prioritize diseases affecting the poor (reproductive health, infectious diseases, HIV/AIDS, childhood illnesses and other social illnesses); improve health service quality; ensure poor have access to quality health services; provide support to the poor with health service subsidies. - Culture and information: - Preserve and restore tangible and intangible cultural heritage; build commune cultural centers; improve quality of news and information to help people access and use information to widen options and improve lives. - Environment and sustainable development: - Create a harmonious link between socio-economic development and protection and improvement of the environment so every citizen can live in a clean and healthy environment. - Social development and safety nets: - Narrow social development gaps between regions and population groups; reduce vulnerabilities of the poor and disadvantaged groups; realize gender equity and advancement of women; stabilize and raise living standards of ethnic minorities. - Expand social protection and the social safety net; develop an effective system of emergency relief. - Expand participation and enhance the role of domestic social organizations and non-governmental organizations in building and implementing the social safety net. *Source: The Comprehensive Poverty Reduction and Growth Strategy (extracts provided in the content unit).* ### Part V: Mobilization of Resources for Growth and Poverty Reduction ### Part V: Mobilization of Resources for Growth and Poverty Reduction ### Planned resource mobilization (2001-2005) - At least VND 840,000 billion (or about US$ 60 billion) will be mobilized for development investment during the 2001-2005 period. - This amount is 1.5 times larger than that of actually invested funds during the 1996-2000 period. - Financing composition: - One third will come from foreign sources. - Two thirds will come from domestic sources. - Sectoral shares of total development investment resources: - State sector: 55.5% - Domestic private sector: approximately 26.2% ### State budget and public expenditures - Resources from the state budget (public expenditures) have been mobilized to the highest level possible; the amount is estimated to total VND 630,000 billion (or US$ 45 billion). - Capital expenditures: VND 185,000 billion. - Current expenditures: VND 445,000 billion. - Funds for national targeted programs and large projects: about VND 60, 000 billion. - With this limited amount of capital: - Targets can be attained in terms of quantity, but quality will be constrained. - The document states the need to strive to mobilize more capital. ### Public finance and investment policy adjustments - State budget expenditure will be restructured; expenditure items not within State functions will be transferred to other economic sectors. - The investment and business environment will be improved to better attract foreign resources. - Spending priorities: - Developing infrastructure, especially rural infrastructure. - Improving community health. - Increasing income-generating opportunities. - Developing productive sub-sectors with strong or potentially strong competitive advantage to promote growth. --- ### Part VI: Organizational Arrangements for Monitoring and Evaluation of the Poverty Reduction and Growth Strategy ### Institutional framework and responsibilities - Implementation is organized in a centralized manner with close coordination among governmental agencies. - A Steering Committee for the Comprehensive Poverty Reduction and Growth Strategy will be established to help the Prime Minister guide implementation. - Line ministries, agencies and local authorities: - Take responsibility for collecting on a regular basis qualitative and quantitative information for monitoring and evaluation at their respective administrative level. - Independent research organizations (NGOs, institutes, universities, etc.): - Shall organize the collection of comments from the people. - Collect and analyze data to assess the present condition and growth and poverty reduction trends. ### Appraisal, risk analysis, and policy adjustment - Establish criteria and procedures to appraise and select priority investment programs and projects, including an assessment of economic and social benefits (cost/benefit analysis). - Analyze and evaluate possible risks to successful implementation and take effective measures to minimize them. - Organize monitoring and evaluation of progress to: - Have an overall assessment. - Uncover and correct irrationalities in the current system of mechanisms, policies, industrial and sectoral development measures. - Adjust and amend policies to implement the Strategy effectively, consistently, on schedule, and according to objectives. - Research, analyze and evaluate the impact of structural, financial and macroeconomic reforms on the poor. ### Monitoring and evaluation indicators - The system of CPRGS monitoring and evaluation indicators includes: - Indicators to monitor and evaluate inputs. - Indicators to monitor and evaluate the efficiency and effectiveness of resources invested in the Strategy. - Indicators to evaluate the impact of each program or strategy on the poor and the whole society. - Disaggregation of indicators will include: urban or rural, region, locality, gender, ethnicity, and so on. --- ### Part I: Socio-Economic Setting — Key outcomes, trends, and challenges ### Economic performance and structural change (1991-2000) - Aggregate outcomes: - Annual GDP growth rate averaged 7.5 percent during the Ten-Year Socio-economic Stabilization and Development Strategy (1991-2000). - The ratio of domestic savings to GDP in the year 2000 was 2.5 times larger than that in 1990. - Per capita GDP was 1.8 times larger in 2000 than in 1990. - Gross fixed capital formation rose to 29 percent of GDP by the year 2000 from 14.4 percent in 1990. - Table 1.1: Selected Economic Indicators, 1990-2000 - Five-year average growth rate of GDP (1986-1990; 1991-1995; 1996-2000) %: 4.4, 8.2, 6.9 - Of which: - Agriculture, Forestry, Fishery, %: 3.1, 4.1, 4.3 - Construction and Industry, %: 4.7, 12.0, 10.6 - Services, %: 5.7, 8.6, 5.75 - Exports, billion US$: 2.4, 5.4, 14.5 - Imports, billion US$: 2.7, 8.1, 15.2 - Domestic savings as percentage of GDP, %: 8.5, 22.8, 27.0 - Consumer Price Index, %: 67.1, 12.7, -0.6 ### Agriculture, industry, and services - Agriculture: - Growth of agricultural production averaged 5.6 percent per annum during 1991-2000. - Per capita food production increased from 303 kg in 1990 to 444 kg in 2000. - Vietnam exports over three million tons of food each year. - Revenues from agricultural exports rose from around US$1 billion in 1990 to over US$4.3 billion in 2000. - Industry: - Rapid growth in production capacity for many industrial products. - Emphasis on development of small and medium-sized enterprises and craft villages to create employment. - Services: - From 1991 to 2000: - The value of financial services increased 3.2 times. - Education and training services increased 2.2 times. - Health and related social services increased 1.7 times. - Transport, storage and communications sector output value increased 1.8 times. - Physical infrastructure improvements: modern bridges, upgraded ferry landings and wharves, modernization of domestic telecommunications network. ### Trade liberalization and external openness - Trade to output ratio (external trade turnover on GDP ratio) rose from 58.2 percent in 1998 to 111 percent by the year 2000. - From 1991 to 2000: - Exports of goods and services increased by 3.6 times. - Imports of goods and services rose by 3.2 times. - Trade liberalization increased the number of domestic enterprises involved in export and import activities. ### Social indicators and human development - Living standards improvements (1990–2000): - Average life expectancy rose to 68 years in 2000 from 64 years in 1990. - Child malnutrition rate fell from 51.5% to 33.1%. - Under-five child mortality rate fell from 81/1,000 to 42/1,000 live births. - Maternal mortality rate fell from 110/100,000 to 100/100,000 live births. - Percentage of rural population with access to safe water has doubled. - Net enrollment rate at primary education increased to 95%. - In 2000: - 88% of communes had access to electricity. - 95% of communes were accessible by car. - Human Development Index and gender: - In 1999: - Vietnam’s per capita GDP country ranking was 167. - HDI country ranking was 101 with an HDI index of 0.682 (in 1990 Vietnam’s HDI ranking was 121 with an HDI index of 0.456). - According to the UNDP Human Development Report, Vietnam ranks 89 out of 162 countries in the Gender Development Index (GDI). - Women account for 26% of the National Assembly. ### Remaining vulnerabilities and constraints - Growth prospects and external shocks: - Since 1997, the regional economic crisis hurt the Vietnamese economy and contributed to slowing output growth. - GDP was anticipated to grow at approximately 6.8 percent in 2001, reversing prior decline, but high mid-1990s growth rates may not be repeatable. - Quality and competitiveness concerns: - Quality of development is still low; economic efficiency is not high; many sectors and products are not competitive. - Agricultural adoption of advanced cultivation methods is too slow and not widespread. - Aggregate labor productivity is low; ratio of unskilled labor remains high. - Manufacturing sector’s record of creating new jobs has been disappointing. - Macroeconomic and financial sector weaknesses: - Macroeconomic balances are fragile and seriously constrained. - National assets, public finance and SOEs finances have not been closely managed. - Taxation system issues: - System of policies and legal regulations on taxation is incomplete. - Trend of exempting or allowing tax reductions on certain components of government revenue remains widespread. - Many revenue items have not been adequately collected (e.g. property tax, personal income tax). - Major sources of revenues are still crude oil exports and import taxes. - The tax collection system should be renovated. - Private sector mobilization: the amount of funds mobilized from the private sector remains small. - Banking and credit: - Credit analysis capability of commercial banks remains weak. - Supply of credit has not been directed towards efficient enterprises. - Credit quality has not been high and the percentage of bad debts is still large. - Ratios of saving and investment to GDP lag behind requirements for sustainable economic growth. - Mobilization, utilization and management of economic resources have been inefficient. - Legal, administrative, social and environmental challenges: - Economic laws are inadequate and lack consistency; some important laws (e.g. Competition Law) are not yet in place. - Large number of by-laws have not been promulgated timely and conflict with each other. - Public administration reform is slow and lacks decisiveness; administrative apparatus is slow to reform and inefficient. - Embezzlement and wasteful use of public funds remains a serious problem. - Urgent social and environmental problems include: - Labor and employment pressures: low income and labor productivity, widening rural-urban income gap, high proportion of untrained workers. - Natural resource overexploitation and environmental degradation; decline in natural forests; pollution in coastal sea areas. - Social issues: high child malnutrition rate persists; over 60 % of disabled children have not been treated; child labor, trafficking and abuse of children, rising number of street children; HIV/AIDS spread not yet slowed. - People in remote, isolated and disaster-prone areas remain in difficulty. *Source: Part V and Part VI; Part I excerpts from the provided PDF content.* ### 1. Definition and Approach to Poverty Line ### 1. Definition and Approach to Poverty Line ### 1.1. Definition - Vietnam accepts the definition of poverty agreed at the Asian–Pacific Conference on poverty reduction (ESCAP, Bangkok, September 1993): “Poverty is a situation in which a proportion of the population does not enjoy the satisfaction of basic human needs that have been recognized by the society depending on the level of economic and social development and local customs and practices.” ### 1.2. International Poverty Line Measurement Method - Method jointly developed by the Vietnamese General Statistical Office and the World Bank; applied in the Living Standards Measurement Surveys in Vietnam (1992-93 and 1997-98). - Poverty lines: - Lower line: food poverty line. - Higher line: total poverty line (includes food and non-food commodities). - Food poverty line basis: - Average 2,100 Kcal daily calorie intake per capita; persons with expenditures lower than this are considered poor in terms of food. - Total poverty line: - Defined by adding costs of non-food to the food poverty line amount. - Historical expenditure-based total poverty lines: - 1993: VND 1.16 million per annum per person (55% higher than the food poverty line). - 1998: VND 1.79 million per annum per person (39% higher than the food poverty line). - Poverty incidence based on these lines: - Total poverty incidence: 58% in 1993 and 37.4% in 1998. - Food poverty incidence: 25% in 1993 and 15% in 1998. ### 1.3. National Poverty Line Measurement Method - MOLISA developed a national poverty line for 2001-2005 to: - Identify poor households and poor communes for eligibility under the National Targeted Poverty Reduction Program and other support policies. - New national poverty line published in 2001 (applied 2001-2005), defined by per capita income and region: - VND 80,000 per month for island areas and rural mountainous areas. - VND 100,000 per month for rural plain areas. - VND 150,000 per month in urban areas. - Future direction: - Move towards one common poverty line for national estimates while considering international poverty standards for comparison. ### 2. Poverty Situation in Vietnam #### 2.1. Vietnam ranks among the world’s poorest countries - Poverty incidence (international poverty line, VLSS): - 1998: over 37%. - 2000: estimated about 32% (equal to a halving of the number of poor households from 1990). - Food poverty (2100 calorie standard): - 1998: 15%. - 2000: estimated 13%. - Using the National Poverty Reduction Program new poverty line: - Estimated 2.8 million poor households by the beginning of 2000, or 17.2% of total households. #### 2.2. Poverty is widespread among households with low and unstable income - Key characteristics: - Large proportion of population lies just above the poverty line; small changes in the line can increase measured poverty. - Most poor derive income from agricultural work; limited land, labor, and capital make income highly unstable and vulnerable to shocks. - Seasonal factors affect agricultural production, increasing vulnerability. - Income growth among the poor is low relative to middle- and high-income groups. - Income inequality indicator: - Gap between richest and poorest quintiles rose from 7.3 times in 1996 to 8.9 times in 1999. - Urban–rural living standard gap remains very large. - Poorest provinces rank lowest on the Human Development Index (HDI) and Gender Development Index (GDI). #### 2.3. Poverty is concentrated in areas with unfavorable conditions for making a living - Majority of the poor live in areas with poor natural resources and harsh conditions (mountainous, remote, isolated areas; Mekong River Delta; Central region). - Infrastructure status in 1,870 especially disadvantaged communes (year 2000): - 20-30% do not yet have roads leading to commune centers. - 40% do not yet have enough classrooms. - 5% do not yet have health stations. - 55% do not yet have access to safe water. - 40% do not yet have electricity lines to commune centers. - 50% do not yet have enough small-scale irrigation works. - 20% do not yet have markets at the commune or commune cluster level. - Annual emergency relief qualification: - Between 1 and 1.5 million people. - On average, the number of households that fall below the poverty line again each year remains large relative to those that escape poverty. #### 2.4. Poverty is concentrated in rural areas - Over 90% of the poor live in rural areas. - Food poverty incidence (1999): - Urban: 4.6%. - Rural: 15.9%. - Over 80% of the poor are farmers with low skills and little access to productive resources. - Vulnerable groups: - Female farmers in remote and isolated areas, especially unmarried female householders and elderly females. - Working conditions: - Poor women have longer working time but lower income and less decision-making power and access to policy benefits. Table: Estimated Magnitude and Incidence of Poverty between Rural and Urban Areas According to the New Poverty Line in 2000 - Total: Number of poor households, (thousand) 2,800; As percentage of total households in the region (%) 17.2; As percentage of total poor households nationwide (%) 100 - Rural: 2,535; 19.7; 90.5 - Rural mountainous areas: 785; 31.3; 28.0 - Rural plain areas: 1,750; 16.9; 62.5 - Urban: 265; 7.8; 9.5 (Source: National Program on Poverty Reduction) #### 2.5. Poverty in Urban Areas - Urban poor characteristics: - Majority work in the informal sector with unstable jobs and incomes. - Labor shedding from state sector restructuring increased vulnerability; redundant state employees shifted to lower-paying non-state work or became unemployed. - Many urban poor live in areas with poor infrastructure and limited access to basic services (safe water, sanitation, drainage, lighting, garbage collection). - High dependence on cash income; usually have limited ability to save and difficulty accessing loans for income-generating activities. - Increased inflow of unregistered migrants from rural areas; no statistics available on numbers of unregistered migrants in reports on urban poverty. - Unregistered migrants face difficulties securing registration and access to basic public social services (health care, education), often paying more or being excluded. - High poverty rates among other targeted groups: unemployed, homeless, those subject to social evils. #### 2.6. Poverty is concentrated in remote, isolated and mountainous areas - Regional concentration: - 64 percent of the poor live in the Northern mountainous region, North Central region, Central Highlands, and Central coastal region. - Characteristics of these areas: - Difficult living conditions, geographical isolation, limited access to productive resources and services, underdeveloped infrastructure, harsh natural conditions, high frequency of natural disasters. Table: Estimated Poverty Magnitude and Incidence According to the New Poverty Line (2001-2005) - Total: Number of poor households, (thousand) 2,800; As percentage of total households in the region (%) 17.2; As percentage of total poor households nationwide (%) 100 - Northwest region: 146; 33.9; 5.2 - Northeast region: 511; 22.3; 18.2 - Red River Delta: 337; 9.8; 12.0 - North Central region: 554; 25.6; 19.8 - Central Coastal region: 389; 22.4; 13.9 - Central Highlands: 190; 24.9; 6.8 - Southeast region: 183; 8.9; 6.6 - Mekong River Delta: 490; 14.4; 17.5 (Source: National Program on Poverty Reduction) #### 2.7. The poverty rate is extremely high among ethnic minority groups - Ethnic minorities: - Account for roughly 14 percent of the national population. - Represent approximately 29 percent of the poor. - Most ethnic minority people live in remote and isolated areas with geographic and cultural isolation, and lack favorable conditions for infrastructure and basic social services. ### 3. Causes of Poverty and Major Factors Contributing to Poverty #### 3.1. Limited and Poor Resources - Poor households lack resources, creating a vicious cycle: - Limited ability to invest in human capital; limited human capital prevents escape from poverty. - Land: - Poor households have very little land; particularly acute in the Mekong River Delta. - Lack of land limits food security, diversification, and shift to higher value crops. - Production practices: - Many poor pursue self-sufficiency and traditional production with low value and low productivity. - Access to services and inputs: - Limited access to agricultural and fishery extension, animal and plant protection. - Production inputs (electricity, water, crop seeds and animal varieties, fertilizers) increase costs and reduce per unit net revenues. - Credit: - Limited access to various sources of credit; very poor often have no access despite improvements from the Project on Providing Credit to the Poor under the National Program on Poverty Reduction. - Lack of collateral forces reliance on small, inefficient loans; misuse of loans and lack of production plans limit future credit access. - Information: - Lack of information on laws, policies, and markets exacerbates poverty. #### 3.2. Low levels of educational attainment; insufficient and unstable employment - Education: - Poor are less educated and have few opportunities for good, stable jobs. - Education expenditures are high for the poor and accessible education quality is limited. - Educational attainment statistics among the poor: - About 90 percent have reached at most lower secondary level or below. - Never attended school: 12 percent. - Completed primary education: 39 percent. - Completed lower secondary education: 37 percent. - Employment: - 80 percent of the poor are involved in agricultural activities generating very low income. - Low education prevents movement to more remunerative and stable non-farm employment. - Intergenerational effects: - Child and infant malnutrition negatively affect school enrollment among poorest children, perpetuating poverty. #### 3.3. Limited access to law and protection of legitimate rights and interests - Poor people, ethnic minorities, and those in special circumstances: - Tend to have low education and inability to resolve legal problems independently. - Enforcement mechanisms are complicated; limited legal services network and few lawyers, concentrated in cities and towns. - High fees for legal services restrict access for the poor. *Source: _cr0425 - 1. Definition and Approach to Poverty Line* ### 3.4 Demography-driven Causes ### 3.4 Demography-driven Causes ### Household size, fertility, and dependency - The average number of children per woman in 1998: poorest quintile 3.5; richest quintile 2.1. - Dependency level: poorest quintile 0.95; richest quintile 0.37. - Large household size both causes and results from poverty and raises the average income denominator per household member. - Poor households have limited knowledge of and access to birth control and reproductive health protection measures; the percentage of poor women using IUDs is low. - Low male awareness of responsibility in family planning and contraceptive use is noted; poor husbands and wives know very little about safe sexual practices and have limited understanding of links among poverty, reproductive health, and population growth. - High dependency reduces adequate labor resources and contributes directly to household poverty. ### Vulnerability to shocks and natural disasters (Section 3.5) - The number of people who need emergency relief every year due to natural calamities ranges from 1 to 1.2 million. - A very large number of households live just above the poverty line and are highly vulnerable to negative shocks (natural disasters, job loss, sickness, etc.), so the number of households that fall below the poverty line again is large compared to those that escape poverty. - Analysis of the Household Living Standards Measurement Surveys in 1992/93 and 1997/98 indicates households suffering frequent natural disasters are likely to fall into deep poverty. - Production and business risks are high for the poor due to little or no skills and lack of business experience; limited income sources reduce resilience and can expose them to further risks. - Identification and implementation of measures to mitigate natural calamity consequences are important components of poverty reduction. ### Gender inequality (Section 3.6) - Women account for nearly 50 percent of the total agricultural workforce and for a large share of total new jobs created annually in agriculture. - Participation in extension training courses: 25 percent of participants in animal breeding courses are women; 10 percent of participants in cultivation extension courses are women. - Women have fewer opportunities to access technology, credit and training; bear greater housework burden; have fewer rights in family decision-making; and are paid less than men for the same work. - Less educated women experience higher rates of infant and maternal mortality; their families tend to have poorer health and higher school drop-out rates among children. - Gender inequality contributes to higher birth rates and higher HIV transmission rates because women have less power to protect themselves in sexual relations. ### Disease, morbidity, and health (Section 3.7) - Morbidity and poor health reduce labor income and raise direct and indirect medical costs relative to family income and assets, trapping households in a poverty cycle. - Poor households often borrow or mortgage assets to pay medical costs, reducing prospects to escape poverty. - Limited access to preventive health services (clean water, health programs) increases exposure to communicable diseases. - According to the 1998 Household Living Standards Measurement Survey, the annual average number of sick days: poorest quintile 3.1; richest quintile about 2.4. - During 1993-1997, the sickness status of the richest quintile improved considerably (reduced by 30 percent) while that of the poor remained unchanged. - Improvement in health status of the poor is identified as a key factor enabling escape from poverty. ### Macroeconomic and reform policy impacts (Section 3.8) - High and stable economic growth has been a major contributor to poverty reduction, but development and opening have had negative impacts on the poor in certain areas. - Inappropriate investment structure: the share of investment in agriculture and rural areas is low and focused on irrigation; bulk investment concentrated on capital-intensive import-substitution industries with little attention to labor-intensive industries. - Small and medium enterprises have not been encouraged timely; many subsidy policies have missed intended targets, negatively affecting rural, isolated and remote markets. - Reform of state-owned enterprises (SOEs) and their financial difficulties led to the elimination of nearly 800,000 jobs during the early years of reform; many laid-off workers struggled to find employment and fell into poverty, with a high proportion being women, low-educated people, and older people. - Trade liberalization and economic reform made the economy more dynamic but insufficient attention to labor-intensive industries and small and medium enterprises contributed to bankruptcies and layoffs. - Benefits of growth have not been evenly distributed; analysis shows rich people have benefited more from economic growth, widening the gap between rich and poor. - Transport infrastructure to remote, isolated and poor areas is insufficient and weak; State investment remains inadequate to meet demand. ### Achievements and policy lessons (Sections III.1 and III.2) - Economic growth and poverty reduction outcomes: - The economy grew by an annual average rate of about 7.5 percent during the 1991-2000 period. - Using international poverty standards, overall poverty incidence declined from over 70% in 1990 to approximately 32% in the year 2000. - Per capita consumption in current prices increased from VND 2.6 million in 1995 to VND 4.3 million in the year 2000. - Public resources and programs for poverty reduction: - Between 1992 and 2000 the State invested approximately VND 21,000 billion through national programs directly related to hunger elimination and poverty reduction. - The figure for 1999 and 2000 alone was nearly VND 9,600 billion, of which: - VND 3,000 billion came from the State budget; - over VND 800 billion from joint financing with other programs and projects; - more than VND300 billion were mobilized from the community; - over VND 5,500 billion came from concessional credits to poor households. - The Bank for the Poor: total amount of funds lent to the poor reached VND 5,500 billion. - Support to ethnic minority people: total grant of VND 70 billion and zero interest rate loans provided to nearly 90,000 households for production purposes. - Central budget support for fixed cultivation and settlement and relocation to new economic zones: more than VND 500 billion in recent years. - Infrastructure and implementation milestones: - During 1999 and 2000, Government invested in 6,500 infrastructure projects in poor communes. - Funds directly transferred to 1,200 communes in 1999 and 1,870 communes in 2000; local budget financed infrastructure in 650 other poor communes. - On average, 2.5 projects were developed per commune. - More than 17 million workdays were mobilized from the local population; cash and in-kind contributions valued at tens of billion dongs were mobilized. - As of April 2001, over 5,000 projects were completed and put into operation. - Institutional capacity and employment: - As of the end of 2000, on-site specialized poverty reduction workers made available to 1,798 communes from 22 provinces and cities. - Employment creation averaged 1.2 to 1.3 million people per annum; private, collective and co-operative economic sectors absorb about 90 percent of these new entrants. - Policy and programmatic lessons: - Rapid and stable economic growth, especially agricultural and rural development with priority investment, has been key to reducing poverty. - Poverty reduction programs require close guidance from Party committees, government and mass organizations and must be concretized into specific policies, mechanisms, projects and annual plans. - Policies should enable the poor to assess their situation, develop capacities, and take the initiative to escape poverty; poverty prevention is as important as poverty reduction. - Strategies must be multi-dimensional and targeted; policies and mechanisms must be flexible and coordinated across sectors and levels. - Mobilization and diversification of resources (local community contributions, State investment, international cooperation) have been important for progress. - Establishment of organizational cadres, volunteers, and replicable local poverty-reduction models (women’s savings–credit, self-help, ethnic minority models, community development linkages) have supported effective implementation. *Source: _cr0425 - 3.4 Demography-driven Causes* ### 3. Challenges ### 3. Challenges ### 3.1 Incidence and distribution of poverty - About 2.8 million poor households, accounting for 17 percent of households in Vietnam, in early 2001. - Majority of poor households face great difficulties in reducing poverty. - Poverty concentrated in mountainous, remote, isolated, island, disaster-prone and ethnic minority areas. - Progress slow in improving infrastructure in poor communes. - A majority of the poor have no access to basic social services. ### 3.2 Economic integration and competitiveness - Opening up and integration with the global economy create significant difficulties and challenges. - Vietnam faces fierce competition in international markets while: - quality of development is low, - productivity is still not high, - ability to compete is weak. - Price of agricultural products is unstable and appears to have a downward trend. ### 3.3 Broadening poverty reduction objectives (qualitative aspects) - Poverty reduction objectives should encompass qualitative changes beyond food sufficiency to include: - clothing, - shelter that is not dilapidated, - treatment when sick, - schooling for children. - To meet these requirements, policy actions include: - ensure food sufficiency, - support commodities production and infrastructure development in poor communes, - create favorable conditions for the poor to access basic social services, - improve social intelligence, - provide legal support, - make mechanisms available for protecting the interests of the poor, - practice grassroots democracy to minimize risks faced by the poor. ### 3.4 Widening gaps and regional disparities - Rising gap in income and living standards: - between urban and rural areas, - between mountainous and plain areas, - among different population strata, - between rich and poor regions, - increasing within the same region/area, especially urban areas where urban poverty is spreading and has become severe. - Poor areas are low-income areas; policies needed to attract foreign and domestic investment to rural areas in general, and to poor areas in particular. - Poor people still encounter many difficulties accessing basic social services; universal and impartial access to services and benefits from growth remains fragile. ### 3.5 Fragility and vulnerability of poverty reduction gains - Poverty reduction gains may not be sustainable; the risk of falling back into poverty remains high. - Poor people are highly vulnerable to risks and unexpected shocks, such as: - sickness, - natural disasters, - harvest losses, - market fluctuations, - environmental pollution, - loss of the family breadwinner, - unemployment, and so on. - Social safety net has not been extended to rural, remote, and isolated areas. - 80 percent of the poor work in the agricultural sector, increasing risk of falling back into poverty. - Many households live barely above the poverty line and have unstable incomes. - Poverty is closely related to environmental degradation; overexploitation of limited natural resources can worsen poverty. - Mountainous, remote, isolated areas are often threatened by natural disaster and affected by backward customs and practices, social evils (e.g., drug trafficking), haphazard exploitation of mineral resources, migration. ### 3.6 Domestic resource constraints and investment challenges - Domestic resources remain extremely limited; substantial investment is needed for overall development and poverty reduction. - Resource mobilization has been limited and inefficient. - Orientation of certain investments is being readjusted; capacity for reinvestment is inconsequential. - Banking and financial system is inefficient; financial market is in an embryonic stage and weak at mobilizing investment capital. - Resources for poverty reduction programs have been increasing over time but remain insufficient to meet needs of poor localities. - Focal areas for poverty reduction are upland and isolated regions with inadequate and obsolete infrastructure and higher investment costs, making private sector attraction difficult. ### 3.7 Employment, labor quality, and demographic pressures - Redundant workers are numerous; proportion of trained workers in the labor force is low. - Continued high rate of population and labor force growth while job creation and productivity improvements remain limited intensifies employment pressure. - Number of unemployed and underemployed people remains large. - Underemployment rate in rural areas is high, about 26 percent (the rate of working time utilization is low, just a little above 74 percent). - In urban areas, unemployment rate appears to be rising, especially in big cities (about 6,4 percent) due to migration, loss of land for production, urbanization, etc. - Reform and reorganization of state-owned enterprises in the 2001-2010 period will lead to shedding of tens of thousands of workers who will need new jobs. - If the poor do not have opportunities to participate in economic reform and trade liberalization, unemployment and poverty could increase. ### 3.8 Policy design, implementation, and institutional weaknesses - Poverty reduction and pro-poor policies and mechanisms are being implemented but remain: - insufficient, - not well-integrated, - not always clear and transparent in some areas and localities, - inappropriate to particular regional and group conditions. - Weaknesses in organizational arrangements and implementation reduce effectiveness and impact on poor communities. - Shifts in terms of trade between agricultural and industrial products directly affect farmers' incomes, especially low-income farmers. - Effective programs in some localities have had limited spread due to lack of appropriate supervision mechanisms. ### 3.9 Gender equality and social risks - Policies on gender equality are adequate but not strictly implemented. - Poor women and young girls in remote and isolated areas and ethnic minority women benefit less from policies. - Negative effects from backward beliefs, customs and practices; victims of female trafficking and family violence in many areas. - Socialization of education and health increases burden on poor families, especially women. _Italic: Source — _cr0425 - 3. Challenges_ (chapter text provided)._ ### 2. Social and Poverty Reduction Targets ### 2. Social and Poverty Reduction Targets ### 2.1. Reduce the percentage of poor households - Reduce the international standards-based poverty incidence by two fifths by 2010 and the food poverty incidence by three fourths by 2010 relative to the year 2000. - Reduce the proportion of poor households by two fifths by 2005 and by three fifths by 2010 relative to the year 2000 (based on the criteria of the National Targeted Poverty Reduction and Employment Generation Program). ### 2.2. Ensure the provision of basic infrastructure facilities to poor people, poor communities and poor communes - Continue to reform, upgrade and expand existing basic infrastructure and develop new ones (small irrigation schemes, schools, commune health clinics, rural roads, electricity for lighting, clean water, markets, commune cultural and postal offices, meeting rooms, etc.) to ensure that 80% of poor communes are provided with adequate essential infrastructure by 2005 and 100% by 2010. - Expand the national transmission grid to reach centers of 900 poor communes by 2005 and ensure that 90% of communes are provided with electricity. - Ensure that roads to commune centers are accessible by car; strive to ensure that 80% of commune roads have the appropriate road surface structure, of which 30% should be paved with asphalt or cement. - Water and sanitation targets: - By 2005, 80% of the urban population, especially those living far from major transport roads, and 60% of the rural population, have access to clean water with an average daily supply of 50 liters per person, and 50% of households have toilets that meet basic sanitation standards. - By 2010, 85% of the rural population have access to clean water with an average daily supply of 60 liters per person and 75% of households have toilets that meet basic sanitation standards. - Emphasize access for poor households located far from commune centers and main roads; ensure nursery schools, kindergartens, schools, health clinics in rural areas have clean water and hygienic sanitation. ### 2.3. Job Creation - Provide new jobs for approximately 1.4-1.5 million people per annum on average. - Increase the proportion of women hired in newly created jobs to 40% by 2005 and 50% by 2010. - Increase the proportion of trained workers in the total workforce to 30% by 2005 and 40% by 2010. - Increase the rate of rural working time utilization to 80% by 2005 and 85% by 2010; the rate of working time utilization for women is 75% by 2005 and 80% by 2010. - Reduce the proportion of urban unemployed people in the total number of people of working age to about 5.4% by 2005 and to under 5% by 2010. ### 2.4. Universalizing Education and Improving the Quality of Education - Nursery and kindergarten attendance targets: - Increase the rate of children under 3 years old attending nursery school from 12% in 2000 to 15% in 2005 and 18% in 2010. - Increase the rate of 3 to 5 year old children attending kindergarten from 50% in 2000 to 58% in 2005 and 67% in 2010. - Schooling and completion targets: - Increase the rate of children going to schools at the appropriate age to 97% by 2005 and 99% by 2010. - Increase the rate of pupils completing the primary education program to 85-95% by 2010. - Lower and upper secondary targets: - Implement lower secondary education universalization in cities, towns and other areas by 2005 and in the whole country by 2010. - Increase the rate of age appropriate lower secondary school enrollment to 80% by 2005 and 90% by 2010. - Increase the rate of children going to upper secondary schools at the appropriate age to 45% by 2005 and 50% by 2010. - By 2010, most primary and secondary schools will meet basic conditions to offer two daytime sessions when pupils can “study through play, play through study”. - Literacy and vocational training targets: - Eliminate illiteracy for 95% of illiterate women under 40 years old by 2005 and 100% by 2010. - Increase the net enrollment rate of pupils in vocational schools to 10% in 2005, 15% in 2010. - Increase the net enrollment rate of secondary school graduates in skills training schools from 6% in 2000 to 10% in 2005 and 15% in 2010. - Improve the quality of education at all levels and for all, especially for the poor. ### 2.5. Reduce the Birth Rate, the Child Mortality Rate and the Child Malnutrition Rate - Reach the average replacement birth rate nationwide by 2005 at the latest and in remote and poor areas by 2010 at the latest. - Reduce child mortality: - Reduce the mortality rate of children under 1 to 30‰ by 2005 and to 25‰ by 2010. - Reduce the mortality rate of children under 5 to 36‰ by 2005 and to 32‰ by 2010. - Nutrition and birth-weight targets: - Reduce the malnutrition rate of children under 5 to less than 25% by 2005 and to less than 20% by 2010. - Reduce the rate of children of low birth weight (less than 2,500 grams) to 7% by 2005 and to 5% by 2010. ### 2.6. Reproductive health, epidemics, HIV/AIDS and other social diseases - Reduce the maternal mortality rate to 80/100,000 live births by 2005 and to 70/100,000 live births in the whole country by 2010 (the rate for mountainous areas is 100/100,000). Improve post-delivery health status of mothers. - Maintain polio eradication; minimize morbidity and mortality from cholera, typhoid, petechial fever, malaria, and plague. - HIV/AIDS: By 2005, slow down the growth rate of HIV/AIDS transmission and halve this rate by 2010. Take preventive measures to minimize the number of children infected by HIV/AIDS. - Control and move towards eliminating social diseases; prevent and struggle against accidents, traumas and the harmful effects of cigarettes. ### 2.7. Develop culture and information and elevate the spiritual life of the people - By 2005: - Strive to raise the proportion of “cultured families” to 80%. - 50% of villages and urban neighborhoods will be up to “national culture” standards. - 78% of all communes will have a cultural center. - On average each person will have four new books a year. - Broadcast and media access targets: - Ensure that 95% of all households can hear the Voice of Vietnam and over 90% can see Vietnam Television programs by 2005. - Universalize basic mass communication equipment to reach each household by 2010. - Increase programming and broadcasting hours in the languages of ethnic minority peoples. ### 2.8. Improve the cultural life and preserve the culture of ethnic minority peoples - Raise social consciousness and preserve traditional cultural values of ethnic minority peoples. - Sustain and develop reading and writing ability of ethnic languages in areas with high ethnic populations. - Provide access to kindergarten education to every child from ethnic minority groups; enable completion of primary education partly in Vietnamese and partly in their own language by 2010. - Provide support to increase ethnic minority representation in the total staff of public agencies; increase the proportion of trained staff, workers and public servants from ethnic minorities. - Ensure entitlement of individual and collective land use rights to ethnic minorities and mountainous people; prevent buying and selling agricultural land that belongs to ethnic minorities. - Localities must have a land and house fund for children’s playing and entertainment areas. - By 2010, each village or hamlet in upland, remote and isolated areas should have a “community house” for meeting and playing. - Continue to consolidate and expand health care, culture, information and related activities to reach ethnic minority peoples. ### 2.9. Ensure a sustainable environment - Focus on environmental degradation and natural resource preservation; ensure that by 2010 there are no slums in cities and no temporary houses in rural areas, especially in the Mekong River Delta. - By 2010, strive to ensure waste water is treated and solid waste matter and waste from toilets are collected at 100% of the industrial zones, cities, towns and rural craft villages; plan to fix environmental damage to rivers, lakes, ponds, canals, etc. - Raise quality of forest protection, forestation, reclamation of barren land and hills; increase forest coverage from the current level of 33% of total country area to 38% by 2005 and to 43% by 2010. - Manage and sustainably use natural and energy resources; minimize raw materials and waste in production. ### 2.10. Reduce the vulnerability of the poor and disadvantaged groups and strengthen the social safety net to support them - Ameliorate significantly the income of the poor, especially of households headed by women; improve quality and access of the poor to basic social and production services and other resources. - Ensure that by 2010 households in urban areas are granted land use right certificates and certificates on the right to own their houses situated on a legal land area. - Expand the formal social safety net to all people; reform social insurance policies and mechanisms; encourage household and community participation in various forms of voluntary insurance. - Improve access of poor workers and disadvantaged groups to the labor market and job training; increase the quality and quantity of employment and assure job security. - Strengthen child and juvenile security; resolve child labor, homeless children, children in special circumstances, especially children from households headed by women. - Protect people living under special circumstances (disabled people, people affected by dioxin, the dependent elderly who live alone, people targeted by policy and other groups). - Take care of and provide treatment to HIV/AIDS infected patients, drug addicts, etc. - Develop strategies to prevent and alleviate natural disaster; halve the number of people falling back into poverty due to calamities and other risks by 2010. ### 2.11. Gender equality, empowering women and ensuring children’s rights - Improve the quality of women’s spiritual and material lives; improve their professional skills. - Create conditions for women to participate in and benefit fully and equally in political, economic, cultural and social life. - Increase the participation of women in agencies, sectors and enterprises at all levels by more than 3-5% in the next 10 years. - Ensure women's rights to benefit from household assets by allowing them to register as co-owner of assets; ensure names of both husband and wife appear on land use right certificates before 2005. - Encourage building cultured families enhancing the role of women as an authority figure; adopt measures to help women alleviate burden in domestic work (preparation of food/meals for families, transport, child care, etc.). - Reduce violence against women and female children in the family as well as in society. - Create favorable conditions to implement child care and child protection policies; enforce the rights of children to live in a safe and healthy environment, to develop physically, intellectually and ethically; ensure orphans and disabled children in difficult circumstances have opportunities to study and play. ### 2.12. Accelerate public administration reform, provide the poor with knowledge of the law - Increase the efficiency of State management; implement the overall public administration reform program for the 2001-2010 period. - Continue to improve institutions and policies that affect poor people; improve targeting of the poor and allocation of resources for pro-poor programs. - Improve access of poor people to a transparent, accountable and participatory government; ensure all citizens, especially poor women, have better access to the judicial system and information about the law. - Complete development of reform strategies regarding the public sector, jurisdiction and financial management to better support the poor; develop a master plan for public administration reform and ensure thorough implementation in urban areas in 2010. - Minimize bureaucracy and drive back corruption; practice democratic and participatory state management; implement effectively the Decree on Grassroots Democracy. - Expand legal support for the poor, diversify forms of support, improve flexibility and efficiency of support, and create favorable conditions for the poor to have easy access to free legal services. ### III. The relationship between growth and poverty reduction - Poverty reduction is presented as a fundamental factor for ensuring social equality and sustainable growth; the initial task is hunger elimination and poverty reduction, the long-term mission is to reduce the gap between rich and poor and build a prosperous, strong, just, democratic and civilized society. - Poverty reduction is not passive income redistribution but about creating a growth dynamic that enables the poor to take initiative to overcome poverty. - Poverty reduction is both an objective of growth and a precondition for rapid and sustainable growth; social resources allocated to poverty reduction may appear in the short run as diversion from growth but are the foundation for generating more resources for long-run economic growth. - Broad-based, high quality and sustainable economic growth is required to: - Create favorable conditions for poor people and communities to access opportunities to develop production and businesses and enjoy fruits of growth. - Support structural transformation, diversification of agricultural production, development of professions and trades, and growth of small and medium enterprises to generate non-farm employment needed to raise incomes of the poor. - Poverty reduction is structured as a component of the Ten-Year Socio-Economic Development Strategy and Five-Year and Annual Socio-Economic Development Plans from central to grassroots levels; the State must take initiative to adjust diverse resources for national poverty reduction objectives and activities while maintaining a market-oriented exchange and distribution mechanism. - Poverty reduction is not only the task of Government and society but primarily the responsibility of the poor themselves to develop capacity to escape from poverty; State support includes material assistance, guidance on production and business, and measures to help the poor avoid falling back into poverty when risks occur. *Source: _cr0425 - 2. Social and Poverty Reduction Targets* ### PART III ### PART III ### I. CREATING A LEGAL ENVIRONMENT THAT SUPPORTS FAIR AND COMPETITIVE BUSINESSES - Objective: Gradual move towards an integrated legal system with consistent policies and mechanisms to regulate all types of enterprises based on the notion that the State respects and ensures the right of each citizen and each enterprise to have the freedom to conduct business in accordance with the law. - Key policy measures and recommendations: - Fully mobilize available funding sources and utilize all production powers to secure economic growth and increase the income of the people. - Implement the Enterprise Law in an accelerated and comprehensive manner and continue to abolish unnecessary business licenses. - Make necessary revisions of legal documents to ensure equal access to public services, resources, investment, and business opportunities; ensure all types of enterprises have equal access to capital, credit, land, new technology, information, market and training opportunities as well as to Government preferential treatment and incentives. - Develop the legal framework to ensure a transparent and stable investment environment with efficient investment promotion measures and policies. - Adopt best corporate governance practices for listed companies and joint stock banks and make them compulsory within 18 months; joint stock companies encouraged to adopt these practices. - People’s Committees at the provincial level should publicize master plans for land use, urban development and civil infrastructure development (including housing, water, bus stations, transportation, etc.) to facilitate investors' decisions; improve the information system and establish urban and township plans. - Enact the Competition Law and develop effective mechanisms to control monopolies and supervise enterprises with monopolistic power in pricing of inputs and outputs and in business conditions. - Streamline and simplify supervision and inspection of enterprises and procedures regulating customs clearance, traffic control and technical examinations to facilitate operations of enterprises and protect consumers; eliminate arbitrary forms of enterprise examination and inspection and the abuse of inspecting function for bribes. - Planned legislative actions and implementation timelines: - In 2002, revisions will be made to the Enterprise Law and Law on Enterprise Bankruptcy. - The Law on Competition, the Pricing Ordinance and the Ordinances on Most Favored Nation Status and National Treatment shall be promulgated. - The (revised) Land Law will be rapidly implemented and the Guidance Decree of such Law released soon to enable the completion of the issuance of land use right certificates in two or three years; this will lay the legal foundation for the healthy operation of the real estate market. - Apply streamlined and simplified procedures to property transfer and leasing transactions, and to mortgaging land use rights as collateral for bank loans, or as equity contribution to joint-ventures. - Promulgate specific regulations to allow Vietnam-based banks to accept land use rights as collateral; gradually promote development of non-banking financial institutions and have regulations on diversified types of funds mobilization and credit provision. - Develop a uniform and consistent financial accounting and economic statistics systems to be applied to all enterprises regardless of form of ownership. ### 2. Continued Reform of State-Owned Enterprises (SOEs) - Overall goal: Rapidly implement policies and directions on organization, renovation and improvement of SOE efficiency; separate providers of public utilities from enterprises engaged in business activities. - Structural and ownership reforms: - Issue criteria for detailed classification of SOEs into forms distinguished by the amount and nature of shares held by the State: all shares, dominant shares, special shares, minority shares, or no shares. - Classify SOEs according to those subject to merger, dissolution, bankruptcy, transferal, sell-off or leasing. - Encourage citizens and enterprises from all economic sectors to do business in areas not prohibited by law. - Replace Decree No. 56/CP governing Enterprises Supplying Public Utilities with a new Decree requiring sound accounting practices and financial independence; State to give equal preferential treatment to suppliers of public goods and services regardless of form of ownership. - Implement the Prime Minister’s Decision 187/1999/QD-TTg dated 16 September 1999 on the Renovation of the management organization of State-owned Forest Farms. - Revise and amend mechanisms and policies to establish an integrated, coherent and consistent legal framework to enhance SOE autonomy and market-based decisions, improving efficiency and accountability. - Introduce mechanisms and policies to provide preferential treatment to selected industries, areas, products and services where there is a clear need. - Promulgate policies to enable fair competition and control monopolies. - Corporate governance, accountability and human resources: - Issue criteria to evaluate business performance and specify supervision and sanction mechanisms applicable to each type of SOE, particularly those fully or largely owned by the State and State Corporations. - Renovate accounting, auditing, reporting, and information sharing systems to make state enterprise operations and finances transparent. - Establish the Financial Investment Company on an experimental basis where the State acts as investor and manager of capital instead of transferor of capital funding. - Correct and supplement the Regulation on Managing Investment and Construction to give more investment decision-making power to enterprises. - Replace Decrees No. 28/CP and 03/2001/ND-CP with a new decree to better regulate labor, salary and income management in SOEs. - Issue criteria and regulations on competitive examination for key management positions in SOEs emphasizing capable and experienced managers; develop training systems for enterprise managers. - Apply policies to ensure appropriate material and spiritual incentives to enterprise managers depending on contribution to business performance. - Replace Decision No. 83/1998/QD-TTg with a new regulation to permit payment of a salary and salary allowance to members of the Board of Directors, the Management Board of State Corporations and large-scale independent enterprises, while defining responsibilities and sanctions. - Financial restructuring and labor support: - Introduce mechanisms and policies to deal with non-performing loans of SOEs; establish and quickly operationalize an asset management company to resolve SOE debt and unused assets to improve corporate finance soundness. - Prepare policies for redundant workers (especially female workers) from SOE reorganization to receive re-training and a basic salary payment for a certain period while searching for new employment; provide unemployment benefits if unable to find a job; allow early retirement and provide support for those seeking new jobs. - Create linkages between depositors and borrowers in the banking system; expand successful micro-finance models initiated by NGOs and civil organizations; tightly link provision of credit for cultivation with agricultural extension. - Equitization, privatization and liquidation: - Accelerate equitization of SOEs where the State does not need 100% ownership; adopt policies to reduce inequities in preference shares held by workers of equitized SOEs and regulate fixed holding periods for such shares. - Study possibility of using part of enterprise equity to issue dividend-earning but non-transferable shares to enterprise workers. - Streamline and simplify equitization procedures to be more transparent and conform with the Enterprise Law and the Law on Encouraging Domestic Investment; allow investors to buy shares in equitized enterprises where the State does not hold dominant shares at first issuance. - Issue a new decree to replace Decree No. 44/1998/ND-CP on Equitization of SOEs. - Revise and amend articles in Decree No. 103/1999/ND-CP on accelerating transfer, sale, business subcontracting and leasing of SOEs. - Invest in, develop and establish new SOEs necessary in key industries and areas after due diligence to avoid medium and long term adverse effects on the state budget. - Merge, dissolve or declare bankrupt inefficient SOEs not subject to equitization, transfer, sale, business subcontracting or leasing. - Revise and amend articles in Decrees No. 50/CP and 38/CP on Establishment, Reorganization, Dissolution and Declaration of Bankruptcy of SOEs to require newly formed SOEs to have status of a shareholding company. - Restrict establishment of 100 percent state-owned SOEs to industries requiring State monopoly or where non-State sectors are not interested or incapable of investing. - Revise the Law on Enterprise Bankruptcy to allow the authority that approved establishment of the SOE to declare the enterprise bankrupt. - Replace system of management oversight by line ministries with state management based on policies, laws, standards and norms; give SOEs the right to make decisions on establishment of State corporations and business associations. - Cooperation, labor code and social insurance: - Encourage diverse forms of co-operation and joint ventures between enterprises across sectors. - Promote role of business associations in providing business development services, acting as bridge between Government and enterprises, promoting exports and trade, and protecting member rights. - Expand implementation of the revised Labor Code. - Draft the Law on Social Insurance and add to employment insurance policy based on principle of “the State, the enterprise and the workers make contributions together”. - Revise and amend the Law on State-Owned Enterprises to permit greater autonomy and ensure greater accountability; issue regulations on establishment, organization, operation, reorganization, dissolution and bankruptcy of SOEs. ### 3. Create conditions for land use, support business production and develop small and medium-size enterprises, farms and various types of enterprises in the private sector - Rationale: Small and medium enterprises (SMEs) play an important role in economic growth, job creation and poverty reduction; the State encourages and supports SMEs, especially in remote, isolated and rural areas. - Institutional and legal support: - Rapidly implement Government Decree No. 90/2001/ND-CP on development of small and medium-sized enterprises. - Establish the Office of SMEs and develop organizations to promote and support SMEs at central and local levels. - Develop legal framework and specific policies to encourage and support SMEs, ensuring easy access to Government support programs in investment and credit, land use, market information, technical consultancy, training services, human resources development and other services. - Finance, tax and land-use support: - Ensure SMEs can access bank credit; State to establish various funds to support investment, offer medium and long term loans, establish a fund to provide credit services to SMEs; expand forms of credit for lease and purchase and for unsecured loans. - Provide on a selective basis preferential taxes, tax reductions and tax exemptions and financing for scientific research and technological renovation programs and for enterprises that employ poor workers, especially women. - Extend preferential eligibility for investment and credit to small enterprises, individual household businesses, family businesses engaged in processing activities, handicrafts and fine arts; pay attention to programs supporting SMEs managed by women. - Allow SMEs to benefit from land-use rights same as SOEs in accordance with the Land Law (conversion, transferring, inheritance, secured loans, renting out land-use rights). - Business development services, technology and training: - Encourage businesses in all sectors to establish technical support centers regionally to provide basic services, training and skill transfer. - Develop market for services including accounting, auditing, marketing and advertising; establish business incubators to nurture SMEs during early stages. - Develop the technology market to increase technology transfer and market development between large enterprises and SMEs. - Provide longer tax holidays for projects involving technological renovation; establish a national training and job creation fund and support training services and technology transfers. - Capacity building and regulatory simplification: - Strengthen capacity of central and local organizations charged with managing and supporting SMEs; provide financial support for business representative, business development and consulting organizations serving SMEs. - Coordinate programs among state management organizations, business associations, vocational centers, and state and private consulting and training facilities to develop a sustainable network for providers of business development services. - Develop concrete policies to create a supportive environment for production and business activities—credit support, market information, production technology, tax exemption and infrastructure—to assist enterprises in selected industries and poor areas. - Set up a relevant financial mechanism for SMEs soon. - Continue to renovate accounting, tax registration and tax payment systems to simplify reflection of SME characteristics, especially in rural and mountainous areas, to make taxation more convenient and avoid tax collection losses. - Cooperatives and farm economy: - Encourage development of co-operatives in accordance with the Co-operative Law and various forms of business co-operation respecting freedom, democracy and transparency. - Pursue clear resolution of outstanding debts of old cooperatives; dissolve cooperatives with only nominal existence and no economic basis or voluntary member participation. - Encourage development of legal consultancies for community-based organizations and facilitate better management of community resources; provide guidance on implementing policies to encourage cooperative development. - Encourage development of and provide long-term protection to the farm economy; implement Decree No.03/2000/ND-CP on development of the farm economy. - Create favorable conditions for households engaging in production and business activities to participate in the market by promoting and completing market institutions; promote consultancy services for households and groups to encourage gradual transformation into enterprises. ### 4. Encourage foreign investment and consider it a long-term component of the national economy - Strategic framework: Implement Government's Resolution No. 09/2001/NQ-CP on attracting and improving the efficiency of foreign direct investment (FDI) to Vietnam during the 2001-2005 period. - Priority measures: - Diversify forms of attracting FDI; implement policy to allow foreign investors to establish shareholding companies and transform foreign invested enterprises in operation into shareholding companies. - Review regularly legal writings issued by central ministries and provinces related to foreign investment, business certification and other certifying documents. - Continue upgrading infrastructure (roads, bridges, seaports, airports, telecommunication systems, power stations, etc) to attract FDI. - Continue implementation of roadmap for harmonizing taxation regimes, land lease price, price of services, electricity, fares for domestic flights and international seaport charges applied to foreign invested and domestic enterprises. - Open more sectors to foreign investment; encourage FDI in export-oriented industries, primary product industries, high technology, new materials, electronics industries, and labor intensive industries or industries where Vietnam has a comparative advantage. - Complementary actions: - Increase the share of official development assistance (ODA) for agricultural and rural development, human resources development, education, health care, science and technology, and environmental protection. - Review licensed foreign invested projects more efficiently to enable timely assistance and address problems. - Continue policy on decentralization of state management of foreign investment; improve administrative procedures; renovate modes of investment mobilization and promotion. - Improve capacity of staff and strengthen training of technical workers for employment in the foreign invested sector. *Source: _cr0425 - PART III* ### 5. Implementation of the Public Administration Reform (PAR), Legal Reform and pro-poor Good ### 5. Implementation of the Public Administration Reform (PAR), Legal Reform and pro-poor Good Governance ### Overall objective and PAR scope - Build a healthy, effective, efficient and accountable State Administration at all levels able to develop policies and provide services to meet people’s needs and to encourage opportunities for the poor and disadvantaged. - PAR to be carried out in four areas: administrative institutions, organizational structure, building the body of staff and civil servants, and public finance reform. - Establish a transparent State administration with a simple organizational structure and a contingent of government staff and civil servants whose quality, capability, profession and qualifications meet the country’s requirements for socio-economic development. ### Key tasks and reforms for governance and public administration - Improve the system of legal institutions, policies and mechanisms to suit industrialization and modernization, with priority to economic institutions and the organization and operation of the administrative system. - Renovate the process of legal writings, drafting, and promulgation; bring objectivity and democracy into law- and policy-making and mobilize the people’s intellect to improve the quality of legal writings. - Clearly identify functions: what the Government must do, what can be jointly done by Government, people and private organizations, and what should be done by people and private organizations only. - Reform organizational structure by reducing the number of focal points of ministries and agencies and applying multi-sector and multi-field management responsibilities for ministries. - Ensure management is accountable, transparent, easy to understand and not an inconvenience to stakeholders. - Make information about services, policies and development plans public regularly and accessible through a one-stop shop system. - Implement PAR in ministries directly impacting the poor (examples given: the Ministry of Agriculture and Rural Development, the Ministry of Health, the Ministry of Education and Training, Ministry of Labor, Invalids and Social Affairs) to ensure poor access to health care, education, infrastructure, water and electricity at local level, especially in mountainous and urban poor areas. - Ensure transparency of the local budget; define the process for preparing the budget and allocating expenditures in each sector to make sure a pro-poor approach is adopted. - Vigorously implement decentralization of public administration while strengthening capacity and responsibility of local administrative apparatus and enhancing supervision and monitoring at the grassroots level; streamline local organizational structures to have fewer focal points. - Simplify and make public administration and business registration procedures more transparent; reduce transaction costs for import-export activities; reform delivery of public services to be more convenient and less time-consuming. - Ensure strict compliance with the law by agencies and civil servants; provide sufficient information and publicize it. - Increase effectiveness of the administrative apparatus; strengthen agencies’ sense of responsibility and commitment to transparency in activities under their public authority and jurisdiction. - Renovate auditing function for administrative agencies; increase accountability and effectiveness in expenditure of the state budget; bring democracy and transparency to public finances. - Strengthen anti-corruption measures and oppose wasteful spending; ensure prudent and frugal use of public funds under the Ordinance on Saving, especially in procurement, licensing, capital investment, and project management. - Efficiently resolve legal cases and long-standing civil disputes; revise, amend and adopt regulations on compulsory registration of real estate and assets belonging to civil servants; ensure timely dealing with violations by civil servants. ### Fiscal policy, tax reform and budget management (Maintain macroeconomic stability) - Implement fiscal policy based on equality and efficiency; make public and transparent the sources of revenues and expenditures of budgets at all levels and the use of contributions from the people. - Create a sound and open fiscal environment to release and develop all fiscal resources, develop and expand revenue sources, and mobilize foreign capital resources. - Develop a public administration mechanism to ensure a balance between capital investment and recurrent expenditures, particularly to finance maintenance of existing public assets. - Link State Budget expenditure reform with better implementation of socialization policies in better-off regions to enable greater allocation to disadvantaged regions. - Renovate and complete decentralization of fiscal management and budgeting. - Maximize mobilization of all fiscal resources to achieve socio-economic development, social equity and poverty reduction. - Consolidate fiscal policy system and mechanisms to create a favorable, attractive and transparent environment to encourage expansion of economic sectors, increase business productivity, and liberate productive capacity. - Raise the share of medium and long term capital mobilized for economic development by diversifying capital instruments (government bonds, investment bonds, municipal bonds, housing bonds, etc); diversify non-banking monetary and financial organizations and investment funds; develop capital, stock and real-estate markets to securitize domestic assets and capital resources. - Continue tax system reform consistent with renovation and international agreements along the following lines: - Simplify and gradually adopt a unified tax system with no distinction between enterprises of different economic sectors, and between Vietnamese and foreign invested enterprises. - Gradually raise the share of revenues from direct taxes as a percentage of total state budget revenue by completing the Business Income Tax Law, reducing tax rates and moving towards a unified framework for taxing income of Vietnamese and foreign invested enterprises; promulgate the Individual Income Tax Law instead of the State Law of Income tax for high-income individuals to ensure social equity and create development incentives. - Complete the system of tax collection with respect to land using a single type of land use tax and one form of tax collection for incomes generated from land use. - Research promulgation of an asset tax to generate more budget revenue and create favorable conditions for asset transfer, sale and rotation. - Complete the system of indirect taxes by gradually reducing import taxes per international agreements; complete VAT by adopting a unified tax schedule; expand VAT coverage to imported goods; expand goods subject to special consumption tax; research application of new taxes related to protecting domestic production (such as anti-dumping taxes). - Limit tax exemptions and gradually narrow scope of tax-based social policies to ensure preferential taxes are properly targeted, prioritizing new investment, production expansion, technology renovation, new product development, high technology professions, export production and labor-intensive projects that contribute to job creation and poverty reduction. - Modernize tax collection system; widen range of taxpayers that self-declare and pay directly to the State Treasury; enhance inspection and enforcement to control tax evasion, smuggling and trade fraud. - Expand socialization in education, training, health, culture, sports and other public services where all economic sectors participate; continue targeting policies to reduce or exempt contributions by the poor. - Complete fiscal regulations and policies to create a favorable, transparent and attractive environment for efficient competition regionally. - Complete policies and mechanisms on foreign borrowings and repayment by improving fiscal planning and project efficiency assessment; renovate monitoring of foreign borrowing activities by enterprises, especially SOEs; construct an information system to analyze, forecast and evaluate safety of ODA borrowings and Government debt management; increase efficiency of the Accumulation Fund for Foreign Debt Repayment. - Implement equity in fiscal allocation policies; increase State Budget efficiency in regulating macroeconomic performance and resolving social problems. - Complete policies on primary reallocation to harmonize economic benefits among the State, enterprises and workers; expand redistribution via public welfare system including insurance, social welfare, preferential fiscal regimes and social support to narrow the gap between rich and poor. - Continue State budget reform via revenue restructuring and clearly defining scope of budget expenditures to increase efficiency in regulating macroeconomic performance and resolving social problems. - Prioritize capital resources from the State Budget for socio-economic infrastructure; emphasize increasing investment share for agriculture and rural areas, education and training, science and technology, culture and health care. - Adopt a mechanism of direct and indirect support from the State Budget for all enterprises without distinction between economic sectors to develop human resources, provide information, promote trade, develop new markets and provide extension and advisory services. - Combine State Budget resources with external assistance and contributions from people to implement national target programs (health, education, poverty reduction, environmental protection, job creation) focusing on areas with high poverty rates, ethnic minority and disadvantaged areas. - Use State Budget to increase financial reserves and enhance budget planning quality; regularly assess efficiency of State Budget utilization; increase control over budget expenditure; ensure State Treasury as major body controlling budget outflows. - Amend and adopt mechanisms, norms, and criteria for budget expenditure aligned with development needs; fully implement policy safeguarding investment resources from budget from project inception through implementation; prevent deficits and misspending in public expenditure. - Maintain an active balance in the State Budget to increase savings gradually and ensure fiscal level for macroeconomic stability and state financial security. - Renovate management of enterprise finance to separate state finance from enterprise finance, ensuring SOEs’ freedom to conduct business, right to self-determination and responsibility under market economy rules. - Renovate fiscal policies to promote rapid development of capital, stock, financial services and real-estate markets to mobilize resources for socio-economic development. - Implement policies to promote thrift and curb misspending; enhance efficiency in natural resources, land and public asset management. - Actively pursue international financial integration with appropriate steps and roadmaps; expand cooperation and international financial relationships. - Complete legal basis and enhance accounting and auditing quality (Promulgate the Accounting Law); increase efficiency of State finance and budget inspection, control and monitoring. ### Monetary policy and banking sector reform - Develop and implement a monetary policy to reinforce macroeconomic stability, control inflation, promote production and consumption, stimulate development investment, and ensure rapid and sustainable economic growth. - Renovate monetary policy toward using indirect instruments; gradually improve exchange rate and interest rate policies and open market operations to enhance monetary policy efficiency and raise convertibility of the Vietnamese dong, aiming to favor the poor. - Enhance the State Bank's role in monetary regulation, credit supervision, and strengthen its organization, institutions and personnel. - Develop the secondary market, especially the inter-bank market for domestic and foreign currencies, and develop financial instruments for exchange rate risk prevention/management. - Develop capital and monetary markets involving banks, non-bank financial institutions, insurance companies, investment funds and guarantee funds to attract savings and expand medium- and long-term funding; reduce capital and credit subsidies. - Implement the Vietnamese accounting system, including application of international accounting standards in commercial banks and bank supervision. - Safely and gradually develop the stock market based on evaluation of the Stock Transaction Center in Ho Chi Minh City; encourage qualified stock companies including FDI and equitized enterprises to list. - Improve exchange rate management to ensure short-run flexibility and long-run stability to encourage exports and stabilize the monetary market; liberalize current and capital account transactions while developing measures to monitor and control international capital flows and external debts; control and minimize use of foreign currencies domestically; gradually reduce the rate of foreign exchange surrender and move towards completely abolishing this regulation by 2003. - Further improve open market operations by increasing instruments and attracting more players to make them key monetary regulation instruments; harmonize Government monetary policy and debt management policy (issuing Government bonds). - Establish an early warning system based on changes in enterprise income statements and balance sheets and corporate finance analysis to recommend actions to credit institutions to prevent or control risks (interest rate, exchange rate, debt, payment ability), thereby securing the banking system and macroeconomic stability. - Set up asset management companies to resolve debt problems; develop measures to address collateralized overdue loans following market-based rules. - Gradually shift from collateral-based lending to project- and economic contract-based and market supply-demand relationship-based lending; enhance commercial banks’ autonomy and responsibility in business activities and competition. ### Commercial bank reform and rural finance - Implement a strategy to reform commercial banks to restore health to the banking system and improve safety and efficiency of financial intermediation. - Focus of reform: curb growth of bad debts and ensure safe, efficient commercial banking activities; encourage non-banking system development and diversify savings mobilization channels and medium- and long-term financial instruments. - Implement reform alongside SOE reform; reform of state-owned commercial banks aims to reinforce management responsibility, initiative, and profit-generation capacity and to commercialize activities. - Establish debt administration and asset management companies (AMC) to address bad debts; debt resolution to include lending reduction and debt clearance for SOEs that are disbanded, leased, and equitized. - Provide supplemental funds to state-owned commercial banks on a 3-year basis according to progress in meeting defined conditions related to organizational restructuring and annual reduction of non-performing loans. - Strengthen regulatory framework, inspection and supervision of all banks; strengthen regulatory rights of lenders to impound and sell collateral assets and transfer land use rights; develop bank inspection policies and procedures based on risk assessment. - Continue restructuring and strengthening of joint-stock commercial banks; complete financial assessment and approve restructuring plans; withdraw licenses or merge weak joint-stock banks; improve legal framework to create conditions for expansion of joint-stock bank activities on equal-competition basis; impose strict penalties on law-violating banks. - Create a favorable and stable environment for credit and microfinance operations to increase flexibility of rural finance to meet poor households’ needs; reform rural credit and finance systems and diversify credit instruments to attract private investment in manufacturing and processing of agricultural products. _Italic: Source — _cr0425 - 5. Implementation of the Public Administration Reform (PAR), Legal Reform and pro-poor Good Governance_ (PDF content provided)_. ### 3. Trade Policy ### _cr0425 - 3. Trade Policy ### Open-door policy and international integration - Continue the open-door policy and actively integrate into the international community to promote development. - Lay the foundations for successful negotiations for WTO accession; actively implement commitments under bilateral and multilateral trade agreements and cooperation mechanisms, with special attention to commitments under the ASEAN framework (such as AFTA, AICO, AIA), APEC, ASEM, the Vietnam – US bilateral trade agreement, and commitments made with international financial institutions. ### Market access, liberalization, and non‑tariff barriers - Enterprises from different economic sectors are given freedom to engage in the business of foreign trade, including export, import and various services, excepting activities not permitted by law. - Implement the management mechanism on exported and imported goods in the period of 2001-2005 issued as an attachment to the Prime Minister's Decision 46/2001/QD-TTg dated on April 4, 2001. - Continue to remove non-tariff barriers, and complete the removal of all imported goods from the temporary exclusion list in the AFTA commitment to the inclusion list by 2003. - Abolish non-tariff restrictions on goods in the temporary exclusion list when the import tax level applied to goods imported from ASEAN countries has been reduced lower or equal to 20 percent. - Continue to abolish restrictions applied to rice exporting and fertilizer importing enterprises. ### Protection, quotas, and quality control - Gradually expand the use of auctions to renew garment export quotas in order to improve market access to exporters (including those from the private sector). - Apply a target-based, conditional and time-bound protection policy that is in line with the country’s integration process. - Strengthen the capacity of institutions and the nation to establish criteria for measurement and to carry out quality inspection of goods. - Implement a roadmap to reduce import taxes levied on goods that serve as major inputs for agricultural products, in order to help decrease input costs for the poor. ### Legal and commercial policy framework - Assess the application of the Commercial Law with a view to revising and amending new terms; promulgate soon the Law on Competition, Most-Favored Nation Law and Law on National Treatment; complete the commercial policy system. - Prepare and promulgate commercial policies in accordance with WTO regulations on certain imported goods with respect to customs quotas, tax on environmental costs, anti-dumping tariffs, tariff to penalize subsidies, and so on. ### Support to exporters, enterprises, and disadvantaged groups - Government should encourage export activities, especially in key products that have comparative advantage, through operations of the Export Credit Support Fund, the Export Credit Guarantee Fund and prepare for the establishment of the Export and Import Bank in the near future. - Provide information and support to enterprises, especially those managed by women, in developing business strategies that fit with the integration process, to help increase their competitiveness in domestic and international markets, increase their market share in traditional markets, and find new markets. - The Government shall have various methods to help exporters and importers access information, and participate in trade exhibitions and trade fairs. - Simplify administrative procedures, especially customs procedures; reduce transactions costs for export activities and costs of other export services (e.g. transportation, warehousing, etc.). - Establish a system to insure export goods, especially for agricultural products, and an export bonus mechanism based on the value added of exported goods. ### Monitoring impacts on poverty and market access for the poor - Study the impacts of trade policies and adopt effective measures to minimize adverse impacts on the poor caused by global economic integration and trade liberalization. - Improve market access for the poor, especially those living in rural, upland and remote areas; stimulate consumption; develop markets or centers to trade and exchange goods in poor areas to help integrate the poor with other groups; and make the market more accessible for them by exchanging goods and production experience. ### Enforcement and price response - Actively implement measures to fight against smuggling and trade fraud. - Take the initiative in responding to price fluctuations in international market, especially with respect to price of agricultural products and crude oil. *Source: _cr0425 - 3. Trade Policy* ### 4. Large-scale infrastructure projects help reduce poverty on a large scale. ### 4. Large-scale infrastructure projects help reduce poverty on a large scale. ### Role of infrastructure in growth and poverty reduction - Infrastructure development and investment increase efficiency, lead to growth, and help poverty reduction by increasing income and budget availability for redistribution. - Large-scale infrastructure projects (roads, bridges, ports, production factories, electricity transmission lines) built in the 90s have made an important contribution to economic growth and poverty reduction in Vietnam. - New infrastructure investment: - improves business environment; - creates jobs and increases income through expansion of production and business; - boosts consumption, stimulating service-sector businesses; - reduces geographical differences and regional disparities by improving exchange of goods and services; - increases market access, diversifies agricultural products, raises productivity, and promotes non-agricultural activities in rural areas; - minimizes income losses from natural calamities or production shocks; - enables development of tourism, creating jobs and increasing local incomes. ### Impact examples and specific outcomes - National Highway No.5 (JBIC analysis): - travelling time between Hanoi and Hai Phong reduced by half; - number of transport vehicles doubled during 1999-2003; - goods handled by Hai Phong Port increased by 1.5 times during 2001-2002; - by mid-2003, 4 industrial zones along Road No.5 account for 85% of FDI coming in the North, creating 14,000 jobs; - provinces along this road recorded growth rates between 1995 and 2000 higher than the country’s and the Red River Delta’s average. - My Thuan bridge and upgrading of National Highway No.1: - travelling time between HCMC and Can Tho reduced from 5 to 3.5 hours; - amounts of passengers and goods doubled; - tourism in Can Tho greatly boosted. - North-South 500 Kv line: - effectively reduced electricity shortage in the Central and Southern provinces; - the new transmission accounts for 20% of electricity demand in the South and of the demand in the Central Province; - rural South surveys show percentage of low-income households having access to electricity increased from 54% to 72%. ### Investment in social infrastructure - Building new hospitals and upgrading equipment, and bringing more doctors and nurses to remote, mountainous areas: - provides high-quality health care for everyone, reduces unit cost, and expands community access to basic health care. - Investment in education infrastructure (universities, technical colleges): - supports human resources development, modernizes production forces, accelerates economic growth, and aids sustainable poverty reduction. - Scientific R&D infrastructure: - makes researchers more successful in inventing and applying new technologies to production. - Cultural infrastructure (museums, parks, sports facilities, theatres): - improves cultural life, recreation, and creativity. - Investment in water supply, drainage, housing, and public facilities: - improves living conditions, enhances environmental protection, and supports sustainable growth. ### Evaluation of current status — Achievements - Major projects in roads, seaports, airports, post service, irrigation, and electricity have been effective in meeting economic development demands and improving living conditions, especially in poor areas. - Infrastructure network is appropriately allocated and concentrates to serve three key economic zones, promoting national growth. - Cross-sector contribution to infrastructure development has created jobs and narrowed supply-demand gaps. - Technologies in large-scale infrastructure have been upgraded; some reach regional and international levels. - Electricity industry growth over the past ten years met the needs of a fast-growing economy with new power stations in operation. - Transport: land and railway networks guarantee smooth and safe transportation; new roads built/upgraded to modern standards; airports and seaports upgraded and expanded. - Post and telecommunications modernization: - in 2003, there have been 8.5 telephones for every 100 inhabitants; - international telecommunication network expanded with more than 5000 channels directly connecting to nearly 40 countries; - Internet service is strongly growing. - Irrigation system: - 75 irrigation works throughout the country, protecting 80% of cultivation areas from drought and 70% from flooding. - Large-scale irrigation works, dams, canals contributed to changing agricultural production structure, higher productivity, and rapid growth of agriculture, forestry, and fishery sector. - Footnote: 200 irrigation works were built from 1996-2000, water supply capacity was increased 10%, drainage capacity was increased 20%, saving 30% of land area and 30% of water supply, reducing 30-60% management cost and creating about 40 thousand jobs. - Housing: - Between 1996 and 2000, 16.5 million square meters of houses built for the Northern Uplands and 9.5 million square meters for the Central Highland. - Health: - network of district hospitals and health care centers developed; major hospitals received new and modern equipment. - Education and training: - progress with university planning; new universities built in difficult regions (Northwest, Central, Mekong Delta); job skill training expanding. - Scientific R&D organizations rearranged and received more investments. - Urban and rural water supply improved: - Footnote: during 1996-2000, urban water supply increased by 610,000 cubic metres per day with an extra of 850 kilometres of water line; - By 2000, water supply capacity reached 400,000 cubic metres per day for Hanoi and 650,000 cubic metres for HCM City with capacity per capita averaging 100-120 litres per day; - 70-85% of the urban population have access to clean water supply. ### Evaluation of current status — Remaining problems 1. Underdevelopment and gaps - Overall infrastructure remains underdeveloped and fails to fully meet socio-economic development and economic restructuring demands. - Project completion often delayed; inter-regional road network underinvested and fails to meet international quality standards. - Irrigation system not fully integrated; slow implementation of water reservoir systems in mountainous areas; tertiary canal network construction behind schedule. - Lack of master and sectoral plans for infrastructure building; ecological and sustainable development receive insufficient attention; overlapping projects waste resources. - Large-scale infrastructure fails to meet demands of a more modern way of life (electricity, post and telecommunication, transport). - Social infrastructure underdeveloped and not fully integrated; education infrastructure insufficient, lacking detailed plans for major universities and colleges; insufficient investments for major hospitals. - Vietnam’s infrastructure lags regional peers in quality and quantity; high costs in social services affect competitiveness in international economic integration and foreign investment attraction. - Comparative service costs (survey): - cost to transport a container for a distance of 40 feet: USD1,500 for Vietnam, USD870 for China, USD697 for Malaysia, USD675 for Indonesia, USD540 for Singapore. - 1kwh costs: USD0.07 for Vietnam, USD0.05 for Malaysia, USD0.04 for South Korea, USD0.03 for Indonesia. - a 3-minute international call from Vietnam to Japan costs USD6.93 while the same call costs USD2.29 from Thailand and USD0.97 from Singapore. - Road and transport comparisons: - roads in developed countries often have 4-6-8 lanes; regional countries 2-4-6 lanes; roads in Vietnam have 1-2 lanes. - percentage of asphalt road: 95-100% in developed countries, 60-65% in regional countries, and only 40% in Vietnam. - percentage of double road: Japan 90%, Korea 80%, China 30%, Vietnam none. - percentage of railway electrification: Japan 60%, Korea 75%, China 55%, Vietnam 0. - numbers of landings: Seoul Kimpo 195000 turns, Changi 340,000 turns, Tan Son Nhat 38,000 turns. - passenger lounge area: Seoul Kimpo 175000 m2, Changi 505,000 m2, Tan Son Nhat 117,000 m2. 2. Constrained and fragmented resources - Resources provided mainly for key sectors and areas; domestic resources limited; budget spending far from demands; local resources too small. - Credit-financed infrastructure in remote and mountainous areas constrained by cost recovery and reluctance of business investment. - ODA used for large-scale projects but concentrated in major urban projects and key areas, not remote rural areas; varying donor disbursement mechanisms cause difficulties. - Counterpart fund allocation for provinces and poor regions difficult to match, affecting attraction and harmonization of investment and project implementation cycles. - Maintenance funding insufficient, causing quick downgrade of infrastructure and tension in investment resources. - Private-sector funding limited; incentive policy needed to encourage private and foreign investment. 3. Project preparation and management weaknesses - Insufficient evaluation of environmental impacts of large-scale infrastructure; issues include noise pollution and traffic accidents. - Inadequate solutions for resettlement and compensation, slowing site clearance and project completion. - Poor project management capacity, especially for new technologies and donor mechanisms; lack of professional training for project management. - Monopolies in some infrastructure services cause excessive costs, low quality, and limited accessibility for the poor. 4. Slow and insufficient financing policy - Issuance of financing policies is slow, affecting mobilization of funding even when budget allocations are decided. - Mechanisms to use soft credit sources for large projects are often incomplete, causing implementation difficulties. - Use of ODA tied with high interest rates and equipment procurement conditions; no policy allowing Vietnamese contractors to bid for lower costs. - Some more developed regions could borrow soft credit funds to invest in infrastructure but policies to allow them to do so are lacking. - Mechanisms to mobilize private capital are not effective; private funding use is arbitrary, not transparent, and not accountable to the community. - Embezzlement and waste in project management remain unchecked; community supervision not fully realized. ### Objectives and directions for large-scale infrastructure development (general objectives for 2020) - To build up the foundation for the development of a modern infrastructure system for an industrialized Vietnam by 2020. - To form a large-scale infrastructure system guaranteeing steady and stable economic operation and creating a driving force for economic industrialization and modernization. - To form a regionally integrated infrastructure system for rational distribution of resources, thereby reducing the regional development gap and ensuring all economic sectors can have equal access to infrastructure. - To build up a large-scale infrastructure system capable of receiving modern technologies of the world and being competitive in the process of regional and international integration. *Source: _cr0425 - 4. Large-scale infrastructure projects help reduce poverty on a large scale.* ### 2. Directions for large-scale infrastructure development: ### 2. Directions for large-scale infrastructure development ### (1) Criteria for selection of priority sectors and industries - Investment in infrastructure must be linked to goals for socio-economic development in general and must be planned for the years to come, thus maximizing the use of the whole system. - Project selection of priority sectors or fields should be based on concrete analysis of choice between growth and poverty reduction in each period, each region and each field, harmonizing these two goals. - In the same area and for the same benefit, projects that help more with poverty reduction will be selected. - Selection must be based on criteria such as project benefits, operating costs, maintenance costs, cost recovery possibilities, etc. - Based on cost-benefit analysis, prioritize the projects with positive benefit and higher cost recovery possibility. - Evaluation should be carried out for social impacts on poverty reduction, project targeted beneficiaries, and impact expansion of project. - Footnote: Choosing investment priority aims to maximize the economic return rate (ERR) or the poverty reduction rate (PRR). If investment to have equality were needed then the return rate would be low. Some researches prove that building communal roads in poor provinces could help to achieve reduction in poverty but could not make much contribution to growth. ### (2) Directions for priority fields - Priority fields will be selected in parallel to the implementation of the Public Investment Programme. - Transport: continue investments for main transport network connecting key econ zones, for the protection of borders, post and telecommunication infrastructure. - Irrigation: focus on water supply and main channels in Tay Nguyen, the Central, the Mekong Delta and the Red River Delta. - Electricity: key projects will be Son La hydropower station and other stations in border regions, island areas and mountainous or remote areas. - Education and training: concentrate resources on major State universities to meet the standards of large universities in region and in the world. - Science and technology: priority to research laboratories and facilities, especially biological technology, informatics, material technology. - Health service: focus investments on central and regional hospitals to upgrade treatment facilities. - Culture and information: priority to radio and television broadcasting to assist international integration. - Water supply and drainage: projects in major cities and industrial areas such as Hanoi and HCM City will receive higher priority to meet drinking water demand and step by step solve flood issues. - Housing development: priority to housing programmes in flood prone areas, calamity-affected areas in the North, the highland in the South, the coastal areas in the Central, new urban areas and industrial zones. ### (3) Directions for economic infrastructure development - Energy: develop in advance to meet socio-economic, national defence and security demands in line with industrialization and modernization; fully exploit natural resources for energy and recycled sources; pursue regional and international integration in Mekong electricity network cooperation; studies for atomic energy. - Target electricity generation capacity: 53 billion kwh by 2005, 88-93 billion kwh by 2010. - Target to reduce electricity waste rate to 10% by 2010. - Integrate national electricity network with regional networks to guarantee safe and effective supply. - Step by step establish a competitive market for electricity supply; diversify investments and businesses; continue electricity price reform under approved roadmap; implement organizational and administrative reforms; provide more financial sources; minimize pollution and environmental damages. - Transport: develop infrastructure in line with industrialization and modernization; complete national transport network; modernize key transport lines and international air and sea ports; build network connecting regions and other countries. - Targets by 2010: 450 million tons of cargo and 112 billion tons per kilometre; 1.225 billion passengers with 57.6 billion passengers per kilometre. - By 2005: all national highways will have asphalt or concrete cover; bridges over major rivers be completed and major national highways be widened. - Priority projects: upgrade national highways connecting important economic regions, border areas and the Southern Highlands; rural road network; roads to air and sea ports; new highway parallel to National Highway No.1; inter-provincial roads in the Mekong Delta; border roads in the Northern provinces; bridges over major rivers; complete the Ho Chi Minh Highway. - Strengthen capacity for maintenance works; apply advanced science and technology in management and maintenance. - Study feasibility of fast-speed highway network in more developed regions and heavy-traffic areas. - Continue upgrading existing railway network, guarantee railway safety and shorten travel times; open new railways to important economic centres. - Develop trans-Asia railway and road networks connecting ASEAN capital cities, industrial centres, cultural and tourist destinations, seaports, river ports, container ports to form a trans-national traffic corridor. - Complete the network of national and local seaports; develop river transport; invest in modern transport vehicles; modernize domestic and international airports; modernize airways and air traffic control systems. - Continue development of basic transport network and public transport in major cities to reduce traffic jams and environmental pollution. - Irrigation and flood protection: - Continue investments in irrigation works to reproduce cultivation land, increase crops, change plant structure, exploit new cultivation land, guarantee agricultural diversification and food security. - Strengthen and upgrade river and coastal dykes to anticipate high flooding and severe storms. - Complete during 2001-2005 the irrigation and water drainage network for the Mekong Delta to minimize adverse effects of calamities in the Central and Southern Highlands. - Accelerate consolidation programme for irrigation quays and trenches based on mutual State and community investment; encourage private investment in irrigation works, targeting 20%-40% of funding from the community for new works and 20%-30% for maintenance of existing works. - Targets by 2005: 6.6 million hectors of rice cultivation and 1.5 million hectors of vegetable cultivation fully watered. - Information and telecommunication: - Accelerate development of national information system in a stable, modern and long-term manner for socio-economic development and national defence and security. - Create a healthy legal environment to encourage Vietnam’s Post and Telecommunication service to reach regional standard; expand telecommunication business to prevent monopolies; apply high technologies and manufacture international standard telecommunication products for future export. - Targets by 2005: 100% coverage of fibre cable and for all communes to have access to telephone services; develop internet service. - Enhance capability to integrate in international telecommunication network with competitive costs; increase quality and time duration of broadcasting programmes; modernize technical facilities and gradually transform to digital technology. ### (4) Directions for social infrastructure development - Education: - Major move to enhance educational quality to reach international standards adapted to Vietnam. - Prioritize human resources development, particularly highly capable scientists, managers and skilful workers. - Effectively implement the Law of Education; radically reform school curriculum towards diversification and modernization; national universities and research centres to take initiative in redefining goals, reforming methodology and contents. - Step by step modernize schools; complete university and college network, concentrating on universities that can compete regionally. - Priority to teacher-training universities; build new universities per master plan turning universities into training and research centres. - Expand international cooperation in education and training between universities and research centres. - Continue to invest in research and experiment capacity for scientists; facilitate studies on new technological application to raise competitiveness and economic efficiency. - Health: - Invest and modernize major hospitals in cities and district health centres to provide treatment for serious illness and check contagious epidemics. - Develop pharmaceutical industry into a spearheaded business, guaranteeing sufficient supply of quality and safe pharmaceutical products. - Target for 2010: standardize practices of all pharmaceutical producers, researchers and businesses. - Invest in modern technologies and equipment in pharmaceutical production; build new industrial manufacturers for anti-biotic and pharmaceutical materials, especially using herbal sources; guarantee sufficient and regular supply of medicines listed for the national health care programme. - Housing and urban planning: - Plan new inhabitant centres; provide houses for inhabitants of flooded areas in the Mekong Delta to guarantee normal daily life and minimize loss of lives and poverties. - Study plans for inhabitant areas surrounding major urban centres and industrial zones; plans for housing in natural calamity-affected areas in the Central, the Northern and the Southern Highlands. - Water supply and sanitation: - Make plans for clean water supply for each area; double supply capacity for urban and industrial centres. - Target by 2010: 90% urban dwellers having access to clean water; reduce water waste from the current 39.4% to 30% by 2010; complete water supply networks for major and heavily-populated cities. - Target capacity: 5-5.5 million cubic metres per day by 2010. - Train staff and workers in management, maintenance and user guidance; improve mechanism to use soft credit for water supply projects. - Concentrate investments in sewerage, drainage and waste management in urban and industrial areas; prevent regular flooding in raining season, first in Hanoi and HCM city. ### IV. Policies and solutions for large-scale infrastructure development 1. Enhance planning and planning management - Ensure suitable timetable for construction with long-term effectiveness aligned with available economic resources. - Focus on investment and construction planning, updated planning for each project based on real demand; determine scale, time and timetable for each infrastructure project. - Integrate sectoral planning into general planning and land-use planning; combine large-scale infrastructure with small and medium-scale infrastructure into an integrated network. - Reform planning so socio-economic infrastructure planning includes countrywide and inter-region characters. - Ensure publicity and transparency for general planning and socio-economic strategies; encourage community participation in examination and supervision of projects under implementation. 2. Develop infrastructure to ensure spreading impacts of dynamic economic areas - Enhance spreading impacts from high-potential areas to adjoining areas to promote balanced regional growth. - Strengthen links between high growth centres and adjoining areas via national and inter-provincial transport roads connecting rural, remote areas and neighbouring countries. 3. Diversify resources for investment - Objective: guarantee capital mobilization for large-scale infrastructure investment will accelerate economic growth while not affecting financial sources for poverty reduction. (1) New policies and mechanisms to maximize resource mobilization - Increase State budget incomes; continue tax policy reform and enhance tax management effectiveness to guarantee long-term financial sources for infrastructure development and growth targets. - Make policies to boost investment demands appropriate to each area and mobilize local resources; continue issuing public bonds, government bonds, project bonds to pool capital for key projects. - Study and implement plan for development of a financial market for capital mobilization for the whole economy. - Quickly implement the amended Law of Land to develop land-use rights and property market, enhancing capitalization and raising budget incomes. - Accelerate rearranging and reforming State-owned enterprises (SOEs); accelerate equalization of SOEs, particularly large, profit-making SOEs for which 100% control by the State is not required, expanding stock market and social capitalization. - Make policies and mechanisms to prevent monopolies in some infrastructure services to raise economic efficiency and competitiveness. (2) Continue policies that encourage private sector participation - Amend and complete legal provisions to create a sufficient and integrated legal framework for implementing the Law on Domestic Investment Promotion; allow private enterprises land-use rights equally to State enterprises as provided by the amended Land Law; support private sector in capital raising, production expansion, market and technology access. - Extend BOT investments; select and list appropriate BOT projects and publicly inform projects for public choice; encourage foreign investors in BOT projects. - Extend mechanism of exchanging land for infrastructure; offer bids for land-use rights to raise funds for urban infrastructure such as roads and water supply. - Mobilize unused capital from the population through issuing government bonds for BOT projects. (3) Attract more foreign capital - Intensify international cooperation related to FDI attraction; implement Vietnam-Japan joint initiative on improving investment environment; pursue multilateral cooperation within ASEAN, APEC, ASEM; intensify investment promotion in key markets like Japan, EU, the United States and others. - For ODA: issue policies and mechanisms for inviting ODA to infrastructure projects; guarantee sufficient counterpart fund for ODA projects; ensure timely compensation, site clearance and resettlement; harmonize procedures for ODA projects regarding licensing, bidding, supervising and evaluating; organize training for project managers from central to local levels. - Attract ODA and other overseas financial assistance within a general strategy for foreign loans and payments to ensure effective use and debt payment ability. (4) Guarantee fair and effective distribution of resources - Ensure enough funding for infrastructure development in key economic areas while supporting poor and less developed provinces. - Select priority projects based on precise evaluation of economic benefit and social impact. - State budget-funded investments focused on national road network, mountainous and border areas; irrigation works; key power stations; key projects for education, science and technology, health care. - Prioritize grant ODA sources for projects of poverty reduction, health care, education, human resources development, social issues (job creation, water supply); environment protection and natural resources development. - Use ODA loans for projects in agricultural and rural development; transport; communication; energy; social infrastructure, etc. - Direct private capital to electricity generation and transmission projects, rural transport infrastructure, irrigation, water supply in rural and cities areas, and private and semi private schools. *Source: _cr0425 - 2. Directions for large-scale infrastructure development* ### 4. Pay adequate attention to environment and inhabitant resettlement concerning large-scale ### 4. Pay adequate attention to environment and inhabitant resettlement concerning large-scale infrastructure projects ### Environment protection - Evaluation of environmental and social impacts of large-scale infrastructure projects must be a constitutional part of the projects. Evaluation results must be considered throughout the process of implementation with a view to minimizing negative impacts to environment and sustainable development. - Evaluation of environmental impacts must be incorporated as a separate item in the project record, which must prove a sustainable use of natural resources, environmental impacts and solutions involved. - Financial funding for environment protection measures must be included in the estimated costs for the project. - The assessment of environment impact must keep standard requirements on environment issued by government agencies in order to use effectively natural resources for sustainable development targets. - Survey public opinions on environmental and social impacts of projects during the process of making the evaluation report. - Project investor must submit a report on environmental impact to the State management authorities before the project can be approved. - Create conditions for government agencies on environment management to supervise, monitor the project implementation. ### Inhabitants’ life stability and resettlement - The State makes appropriate policies for compensations when using land for national defence and security purposes or for national or public interests. Compensations can be made in cash, housing or land. - Apart from site-clearance compensations, project investors must be responsible for supporting expenses for re-training farmers who have been removed from their land. If there is demand for workers, investors must offer new jobs to these farmers as first priority. - For those tenants who have to leave, the State will support expenses for them to resettle. In case of big projects when local inhabitants have to move to new settlement quarters, the State will provide moving allowances or offer them similar policies as those who go to settle down in new economic zones. - Resettlement programmes are carried out under existing laws and regulations and in that sense; the inhabitants have become beneficiaries of the infrastructure projects. New resettlement quarters must have infrastructure appropriate to the local conditions and planning. - Funding for infrastructure in resettlement quarters will be taken from the infrastructure compensation fund on project site, land capitalization and other supporting sources. ### Working accident reduction and traffic safety guarantee - Promote information dissemination on work safety regulations for workers on infrastructure construction projects, particularly for complicated and high-risk projects such as mining channels, high-voltage transmission lines, etc. - Equip necessary facilities for work safety during construction; enhance the capacity of ministries, management authorities and project management boards in supervising the implementation of accident preventive measures on construction sites. - During operation of road works, apply measures for traffic safety; disseminate traffic law and regulations to raise community’s consciousness for traffic law observation. - Traffic will be more closely scrutinized and traffic law offences will be more severely fined or punished. - Improve the system of road signs and traffic lights and strengthen traffic police responsibility for educating and guiding traffic law for the community. ### Reform management mechanism for infrastructure projects - Urgently implement new regulations on construction investment in any stage from project formation to operation; enhance examination and approval to avoid overlapping and ineffective investments. - Enhance decentralization while increasing capability and responsibility in project management by ministries, sectors and provinces; strengthen supervision and evaluation of investment projects in the whole licensing process to guarantee mobilized capital is used properly and efficiently. - Projects supervision and evaluation must address both direct and indirect benefits and point out necessary corrections. - Carry out measures to minimize risks in project construction and operation. - Promote community involvement in examination and supervision. - Enhance managerial capacity of authorities involved in project management; standardize staff work and increase training courses for project managing staff during and after implementation. - Enhance accessibility to new building technologies and new management standards with special attention to project supervision. - Require regular reports, particularly on evaluation results of key projects; keep regular updating of information and managerial know-how. ### Building relations with partners - Close working relations between the Government and donor organizations will create favorable conditions for the long-term effect of investment in large-scale infrastructure projects. - Support measures associated with large-scale infrastructure services—such as building rural road networks, developing human resources, improving investment environment, enhancing project management capacity, operating capability—are needed. - Community groups that are not beneficiaries of growth should be supported through poverty reduction programmes. - Strengthening relations with donors will help strategic decisions and use external potential and input. - Diversify financial assistance. Close technical supervision and examination are needed especially for large-scale infrastructure projects to ensure environmental and social requirements are met. - Continue sharing information and co-decisions between Vietnamese authorities and donors throughout implementation and management. ### Enhance maintenance for large-scale infrastructure projects - Operating effectiveness and usefulness depend greatly on proper implementation and maintenance. Budget spending on operations and maintenance work for infrastructure services continues to be insufficient to ensure proper upkeep of facilities.16 - There is a lack of continuity of coordination between project management and maintenance responsible authorities, reducing project effectiveness. - Maintenance solutions: - Increase funding from the State budget as a separate fund for effective maintenance. - Build a mechanism for mobilizing financial sources other than budget for maintenance work. Maintenance cost should remain as a separate item in project spending. - Use fees for using public infrastructure services (roads, irrigation and other public works) as budget income, which can be spent on maintenance. - For public works that can generate incomes (transport, irrigation, public utility businesses), add maintenance cost under existing regulations to production costs and properly follow maintenance standards. - Extend various forms of private investment and promote social investment in education, health and other social activities; encourage local and foreign investors to invest under BOT for public service projects to increase funding for maintenance. - Decentralize management for public projects; use unpaid labour for maintenance work. - Financial funding for maintenance of budget-invested infrastructure projects should be planned, taking into account the public spending programme. - Footnote data preserved: - Regular spending on maintenance for irrigation works is as low as 2% of total invested capital for irrigation and 8% in case of education projects, 10% in case of health care projects. Annual spending on maintenance for road network is just enough for only 30% of demands.16 ### Realize cost-reduction solutions to increase accessibility of the poor to infrastructure services - One reason for limited accessibility of the poor is that service fees are often too high compared to their incomes. - State budgetary support is needed to develop infrastructure services in rural and remote areas. Private sector should be encouraged to invest in areas where the local community is able to pay. - Appropriate fee policies should be adopted for large-scale infrastructure services in poor localities to help the poor use these services. - Raise efficiency of building and operating infrastructure services by enhancing management capacity and applying advanced technology to reduce costs and raise competitiveness. - Implement solutions to prevent waste and downgrading of infrastructure services. *Source: Excerpt from "The Comprehensive Poverty Reduction and Growth Strategy"* ### 1.2 million hectare, with total production volume of approximately 2.6 million tons, of which shrimp production ### _cr0425 - 1.2 million hectare, with total production volume of approximately 2.6 million tons, of which shrimp production ### Aquaculture, fisheries and sustainable production - Area under aquaculture and related aquatic production: 1.2 million hectare. - Total production volume: approximately 2.6 million tons. - Shrimp production amounts to about 300 thousand tons. - Policy objectives and interventions: - Ensure the sustainability of the growth of aquaculture production. - Improve the access of poor fishery households to production inputs, information, extension services, credit and markets. - Improve capacity in recovery, management and risk prevention in aquatic production including both aquaculture and fishing. - Diversify aquaculture production; rapidly expand specialized shrimp and fish areas, or integrated shrimp-rice and fish-rice areas by making full use of ponds, lakes, surface water, rivers, and streams. - Implement policies on subsidized investment, training, technology transfer, and breeds for poor households engaged in aquaculture. - Require aquaculture and seafood production to go hand-in-hand with environmental protection and sustainable development. - Encourage seafood farming through policies on investment support, credit on preferential terms, and other favorable policies. ### Applied research, technology transfer, and extension - Strategic focus: - Strengthen applied research and technology transfer as a primary measure to raise production efficiency and diversify incomes from agriculture, forestry, aquatic production and other rural activities. - Prioritize research and development of seeds and breeds with high productivity and high quality and value, modern cultivation technologies, effective plant protection and veterinary services, and post-harvest technologies. - Strengthen socio-economic and environmental research. - Re-orient and re-organize the current agricultural research system. - Increase budget expenditure for research, creating new varieties of breed, and technical training. - Training and extension measures: - Implement training courses for local officers and poverty reduction cadre in planning for socio-economic development, project management and poverty reduction methods. - Expand vocational training for rural youth; Government provides investment support infrastructure while students only have to contribute monthly fees. - Establish a mechanism to support the expenses of vocational training facilities at the local level. - Encourage development and raise quality of training and agricultural extension services, focusing extension expenditures on disadvantaged areas. - Provide poor households regularly with market information on new varieties, guidance on production techniques, production experiences, introduction of successful business models and new effective ways to conduct business. - Train cadre to provide extension and advisory services to women, local people and those who know the languages of ethnic minorities. - Support research to develop low-cost but highly efficient technologies needed by the poor. - Encourage sharing of production experience between researchers, managers, technical personnel and farmers. - Build and disseminate effective self-help poverty reduction models for different areas. - Encourage and support voluntary joint and self-managed forms of extension services (self-help groups, social services groups, savings and credit groups, marketing groups, education and training groups, women’s groups, etc.). ### Market development, commercialization and export promotion - Continue implementation of Government's Resolution No. 09/2000/ NQ-CP and No. 05/2001/NQ-CP on initiatives and policies aimed at changing economic structure and marketing agricultural products. - Support export activities and expansion of export markets for agricultural and forestry products. - Study and promulgate policies, within the framework of Vietnam’s trade-related commitments, to support production and marketing of high economic value and potentially competitive products, including rice, rubber, coffee, tea, raw materials for processing (wood, sugar cane, cotton, mulberry...), shrimp, fish. - Encourage enterprises and individuals to engage in horizontal (production-processing-distribution) and vertical (commodity-association) cooperation to facilitate distribution of marketed surplus for farmers. - Set up appropriate legal framework to promote various forms of economic contracts between enterprises and individuals, and farmers and local communities. - Provide favorable conditions (access to credit, tax reduction and exemption) to enterprises investing in processing or developing material supply areas, in remote and disadvantaged regions, or where poor communities live. ### Rural diversification, non-farm employment and SMEs - Continue to encourage agricultural diversification and the development of rural professions according to Prime Minister's Decree No. 132/2000/QD-TTg dated 24/11/2000. - Government will promulgate a master plan and directions to develop rural professions according to the market mechanism to ensure sustainable development and environmental protection. - Promote shifts in production structure toward labor-intensive, multi-purpose, commodity-oriented production to increase value added per unit of land and labor. - Reduce monopoly of SOEs in agricultural product markets; create conditions for private enterprises, particularly in poor areas. - Establish supportive legal, institutional, financial and business environment to facilitate formation of small and medium rural enterprises and create more non-farm employment; give special attention to female-headed SMEs operating in processing and services. - Complete policies to encourage investment, technology transfer, marketing, greater use of domestic materials (wood, rattan, bamboo, leaves etc.). - Provide loans on preferential terms, ease land rental costs, provide tax exemption, and freedom to conduct business and market products. - Support development of infrastructure for traditional craft villages; support training, technology transfer, and information dissemination. - Encourage at least one training center in each district/local area to train in local traditional professions and encourage crafts people, cooperatives, craft and trade associations, and unions to open training classes. - For regions with production difficulties and many poor households, increase investments to build infrastructure: roads, power supply, water supply, communications, schools, village clinics, and support establishment of small and medium sized rural enterprises. - Focus investment on non-farm rural businesses: processing and storing agricultural products, producing construction materials, bamboo and rattan products, handicrafts, pottery, glass, textiles; modernize processing industries, packaging and marketing; set up handicraft and processing centers in rural areas. - Allocate a share of annual plan and national program budget for direct investments to create opportunities for poor farmers to shift production structure and expand specialized trades (interest-free loans for mill construction, purchasing equipment; support for training in new techniques; organizing supply of materials and marketing of products). ### Rural finance, credit access and financial system reform - Objectives: - Improve access to financial and credit services in rural areas (saving and credit). - Reform and renovate the rural financial and credit system, establish a sustainable credit market. - Create conditions to facilitate investment in modernizing and diversifying agricultural products and mobilize private investment in processing high quality products. - Enable poor households to "lend-and-borrow" money easily. - Expand savings fund system and develop policies to mobilize dormant capital from communities to generate more credit resources for rural sector. - Strengthen role, organization and general direction of the Bank for the Poor and the system of People’s Credit Fund. - Operational measures: - Improve loan procedures and formalities by introducing the one-stop shop approach to improve access of the poor to capital. - Pay special attention to providing medium term and long term loans matched to the production cycle. - Apply appropriate credit policies to targeted groups, with priority given to women. - In the near future, continue policy of providing credit at low interest rates to poor people; in the long term shift from subsidizing interest rates towards improving access by simplifying lending procedures combined with training. - Directly subsidize banks and credit funds operating in disadvantaged areas to offset additional transaction costs, enabling them to maintain interest rates on a par with the general level. ### Production organization, cooperatives and market participation - Reorganize production, protect and encourage household, farm and private economies to shift towards large-scale labor intensive production. - Continue to strengthen the collective economy with diverse forms and sizes on principle of voluntary membership, democracy, transparency, efficiency and empowerment of cooperative participants. - Provide economic information regularly to poor communes and households and guidance for farm communities to select marketable, high-return products. - Encourage development of formal and informal assistance among farmers (self-help groups, savings and credit groups, marketing groups, education and training groups, women’s groups). - Strengthen farmers' position in cooperatives to improve access to bank credit, insurance, extension services and marketing. - Create favorable conditions for households engaged in production and business activities to participate in the market and encourage gradual transformation of household enterprises into joint stock companies with large-scale production. ### Disaster prevention, mitigation and social safety nets - Develop a disaster prevention strategy to minimize losses and stabilize livelihoods and production in disaster-prone areas. - Strengthen disaster prevention and mitigation program, build hydrometeorology and information systems, raise awareness and capacity to respond to natural disasters, build infrastructure and safe sites, establish emergency reserves and train rescue teams. - Establish the Fund for Recovery from Disaster to provide timely assistance to the poor in case of disaster. - Set up social safety net systems such as the Hunger Prevention Fund for use before harvest periods. - Annually use State budget funds to invest in building and mending dykes and other flood and drought prevention facilities; build flood prevention and distribution facilities in the North. - In the Central region: adjust population master plan, build flood prevention facilities and lakes, finance building houses on stilts, complete irrigation sea dyke system, estuary dykes and flood control to reduce losses, especially in the Mekong river delta during high water season. - Establish local flood prevention funds mobilized from people’s contributions according to government regulations and prepare reserve plans for weather problems. ### Industry, urban development and job creation - Industry development objectives: - Ensure fast and efficient industrial development that is competitive and responsive to market demand. - Focus investments to upgrade technology and modernize industries. - Achieve a balance of industries with comparative advantage, high-technology, strategic, processing, labor-intensive and local materials-intensive industries. - Supporting agriculture and rural sector: - Develop and modernize industries that support agriculture (chemicals, fertilizer, packaging). - Diversify and modernize mechanical engineering to meet agricultural demand (small tractors, processing machines, post-harvest technologies, modern insecticide spraying machines, water pumps). - Develop microbiology industries to enable environmentally safe agriculture and protect consumer health. - SME linkages and rural industry: - Develop and expand linkages between small-scale and large-scale industries based on SMEs in traditional businesses applying modern and environmentally clean technologies. - Expand subcontract activities in rural areas and encourage small-scale private enterprises to invest, adopt long-term perspectives and employ more workers. - Encourage large companies in transportation, construction and other labor-absorbing sectors to hire more people and create stable jobs. - Provide incentives: business production site facilitation, reduced land rental costs (including zero cost rent in some rural areas), income-tax reduction proportional to recruited workers, reallocation of inefficient production sites, public recognition for job-creating entrepreneurs. - Encourage banks, financial organizations, large enterprises and individuals to channel investment to SMEs and provide economic information and training. - Support SMEs to become direct exporters and develop stable relationships with foreign trading partners. - Establish trade promotion centers and SME support centers under Government Decree No. 90/2001/ND-CP dated on November 23, 2001. - Provide guidance and regulations to encourage industry relocation to rural areas and establishment of rural industry centers with incentives (land, inputs, investment, credit, tax and fees, market information, science, technology, environment, labor training). - Urban poverty and infrastructure: - Encourage urban poor self-effort with Government and community assistance; no discrimination between local and migrant poor. - Set up framework and master plan for urban development to address slums and temporary shacks and develop a national urbanization strategy. - Create jobs and reduce unemployment through economic growth strategies and investments across sectors. - Improve and expand vocational training and job services for urban poor. - Provide loans to urban poor via savings programs and community credit; priority subsidies for education, health care, housing renovation and essential infrastructure (water supply, drainage, electricity, sanitation). - Continue programs to upgrade local infrastructure, renovate and expand urban transport and public transport; ensure basic services to poor communities. - Extend urban waste garbage management on principle of socialization to reduce pollution in urban poor areas; develop public health-care programs. - Develop urban housing policies for poor communities and low-income people; upgrade current living areas in line with financial resources while ensuring employment for the poor. - Create conditions for poor to contribute to infrastructure projects in their commune, district or town, providing income-generating opportunities. - Develop urban development strategies that include poverty reduction objectives and allocate land for building houses for the poor to achieve balanced urban development and reduce rich-poor gaps. - Protect the urban environment and adopt water, air and land pollution treatment measures; develop standards and procedures in urban design and planning that account for environmental sanitation and the poor’s ability to pay. - Implement administrative procedure reform that considers realities of poor people regarding land and housing management, issuance of business and construction certificates, and resident registration. - Encourage community mobilization among the poor to contribute financial resources, labor and experience to housing, infrastructure development and income-generating activities. *Source: The Comprehensive Poverty Reduction and Growth Strategy* ### 3. Infrastructure development to create opportunities for poor areas, poor communes and poor ### _cr0425 - 3. Infrastructure development to create opportunities for poor areas, poor communes and poor ### Infrastructure development — overall objectives - Continue development of infrastructure (transportation, post, electricity, etc.) to create capacity for socio-economic development. - Concentrate on trade and marketing infrastructure: ports, warehouses, loading and discharging berths, market places, and on providing market information to reduce costs and increase competitiveness of agricultural products. ### 3.1 Electricity development and consumption in poor communes - For poor communes located in power line-accessible areas: - Government invests in high-voltage lines, medium-voltage transformers and first-top electric meters. - Low-voltage lines and household access lines (below the first-top meters) are financed by the people. - Distribution and sales management: payment made to the State at the price of the first-top meter. - Forms of supply/management: electricity management division at commune level; electricity supply co-operatives; sales contractors (groups of households); local electricity companies responsible for sales. - For communes that cannot access the national electrical grid (estimated to number about 200 poor communes): - Government provides capital financing or concessional credits with zero interest rate to develop self-supplying plants (small-scale hydro-electricity, household generators, groups of households using solar-energy, wind power, etc.). - For extremely poor households: - State provides additional financial support to set up connection lines from main electricity grids to each household and finance internal electrical wiring. - Capacity-building and pricing: - Government will support training, training cadre, managers, operators and maintenance personnel. - Immediate priority: remote and isolated regions and difficult terrain. - Regulations on electricity usage in every commune will be formulated. - Government will provide instructions on lowering electricity prices for the poor to ensure they are not much higher than standard city charges. - Maintenance and repairs: - Spending on maintenance in electrical projects covered by annual payments from consumers. - For extremely poor communes, Government will provide partial financial support for major repairs. ### 3.2 On developing road transport - Build and upgrade transportation using "State and people working together" mechanism; replace bamboo "monkey" bridges with new concrete bridges. - Ensure all commune centers and commune-group centers are reached by car-accessible roads. - For mountainous provinces: build roads for medium and small trucks to reach commune or commune-group centers. - Difficult terrain: Phase 1 roads for motorcycles and horse-carts; Phase 2 expand to cars and trucks. - Quantitative targets: - Ensure that 30 percent of roads will be made of concrete. - Ensure 70 percent of rural roads can be transportable year round. - Abolish 80 percent of "monkey" bridges in the Mekong River Delta area. - Public transportation: - Gradually develop public transportation; provide cargo and passenger transport in rural and poor areas. - Special policies: - For remote and isolated communes with rural industrial zones, adopt special policies to build roads connecting to main highways and upgrade deteriorated roads. - Investment sharing for roads within communes: - People's contributions: 60% of total investment (in the form of labor and locally produced materials). - State provides 30% of total investment (major materials such as cement, steel). - Priority to upgrading, expanding and rehabilitating existing roads that are not year-round passable; new constructions considered when resources available. - Inter-commune and connection roads: - State supports most materials and bulldozer services; remainder covered by mobilized local resources. - Program integration: - Integrate Program No. 135, mountainous commune-group centers development program, and socio-economic development programs in Northern mountainous areas, Central Highlands and the Mekong River Delta to mobilize resources efficiently. - Participation and transparency: - Publicize opportunities for people in poor communes to participate in project selection and decision-making for State-funded transport projects, based on the Decree on Grass-roots Democracy. - Project selection and decision-making must be public, democratized, and based on resources mobilizable from localities. - Additional transport modes: - Rehabilitate and upgrade the existing train system and construct other essential train lines. - Upgrade the domestic waterway system, especially in the Red River delta and Mekong river delta, to enable round-the-clock utilization. - Upgrade urban infrastructure, especially in Hanoi and Ho Chi Minh City, and reduce traffic jams. ### 3.3 Small-scale irrigation works for poor communes - For poor communes within Targeted Program No. 135 lacking an irrigation system or with deteriorated systems: - State provides support from the state budget to invest in new systems or upgrade existing ones. - In extremely poor mountainous areas with no water-cultivation: - State supports development of terraced fields, local food production conditions, or forest planting. - For communes near main irrigation stations: - State invests in developing irrigation canals to supply water and provides material support with the people for inner-field canal systems. - Continue focusing investment in small-scale irrigation works in poor communes and areas. - Irrigation fees: - Collect irrigation fees for State-invested constructions; fees should cover recurrent and operating costs, not initial investment outlays. - Local responsibility: - Formulate regulations defining commune-level responsibility to maintain and manage small-scale irrigation works long-term with community participation. - Current contribution patterns: - People's contribution accounts for 20-40 percent of total investment expenditure for new irrigation construction. - People's contribution accounts for about 20-30 percent of total maintenance and recurrent expenditure. - Explore applying this formula on a larger scale. - For areas without local water resources, especially remote and isolated areas: - State should provide more support and assistance. ### 3.4 Development of the information network in the countryside - Continue development of the information network in countryside, especially poor, remote, and extremely difficult communes. - Continue establishing cultural-model post offices in all communes and particularly in poor communes. - Post office usage is very high among poor people but capital recovery is difficult; State will research mechanisms to support development of commune cultural-model post offices. ### 3.5 Development of kindergartens and nursery schools - Role and benefits: - Kindergartens and nursery schools help the poor access public services, reduce poverty sustainably, reduce malnutrition, develop intellectual skills, and enable timely school entry. - They also free girls from childcare duties, increasing girls' school attendance and allowing parents to increase working time. - Coverage and attendance statistics (by 1998): - 26 percent of total communes have kindergartens. - 77 percent have nursery schools. - Kindergarten attendance: 4 percent. - Nursery school attendance: 40 percent. - Regional disparities (by 1998): - Central Highland: kindergarten 2 percent and nursery school attendance 25 percent. - Mekong River Delta: kindergarten 1.5 percent and nursery school attendance 14 percent. - State action: - Research and develop suitable mechanisms for kindergarten and nursery development, especially in remote, isolated and ethnic minority areas. ### 4. Education system — equity and quality (selected policies and targets) - Implement the Strategy to Develop Education 2001-2010 (Decision 201/2001/QD-TTg on December 28, 2001). - Objectives: - Renovate educational objectives, content and curriculum to standardize and modernize toward regional and global standards. - Raise quality of universal education; increase average hours of study and percentage of children in school all day, especially in rural areas. - Raise quality of higher and post-secondary education and vocational training. - Teachers and management: - Develop teacher contingent to appropriate numbers, structure and standards. - Renovate teacher training programs and nurture teachers, lecturers; maintain and raise ethical standards. - Renovate education management toward greater effectiveness and strong decentralization to promote local initiative and responsibility. - Structure and access: - Complete the structure of the national education system; develop network of grassroots schools; diversify and standardize links from technical school to university and post-graduate. - Prioritize higher-level technical and industrial schools and grassroots education for ethnic minorities and remote regions. - Non-state participation: - Encourage all society to participate; develop schools outside the public sector with priority mechanisms for land renting and credit access. - Expand funds to encourage study and investment in education; develop community-based education centers. - Fees and equity: - Renovate education fee regime to match quality while providing exemptions and reductions for poor people. - Remove gender gaps and gender-related prejudice; apply special measures for women and girls in remote, isolated and ethnic minority areas. - International cooperation: - Promote international cooperation in training and cooperative research. - Equality of access and quality for poor and disadvantaged groups: - Complete policies on equality of access; focus on primary and junior secondary access for rural and poor children; ensure gender equality. - Invest in material facilities: replace bamboo-and-leaf classrooms; provide adequate teaching and studying facilities for all primary and junior secondary schools. - Develop concrete and semi-concrete schools in disaster-prone areas. - Maintain and expand boarding school system in remote, highland and isolated regions; implement boarding in communes and district-level models to encourage poor households to send children to school. - Attract ethnic minority girls to boarding schools; increase female representation. - Improve quality of training and educational programs, textbooks, and teacher capacity-building in poor areas. - Implement special policies for staff in disadvantaged areas: salary and allowance improvements, training priority, preferential regimes. - Apply measures to raise share of female teachers from ethnic minorities. - Financial support and student assistance: - Construct exemption and full support mechanisms in primary education covering school fees, textbooks, contribution fees, meals, lodging, and transport costs for children from poor households. - Provide timely support to families with children in primary school living in areas affected by calamities to prevent dropouts. - Gradually pay attention to poor students at higher education levels. - Language and selection policies: - Create conditions for ethnic minority peoples to study and become fluent in the national language and their own language. - Prioritize training cadre in extremely disadvantaged communes and provide targeted training and special selection mechanisms. - Employment linkage: - Adopt policies to encourage rural youth to study and find appropriate jobs after graduation (scholarship funds, job-seeker assistance funds, subsidizing people who return to work in their homelands). - Strengthen education and dissemination on targeted programs and professional occupations to encourage investment in education and training. - Financing targets: - Increase the share of spending on training and education in the state budget from 15% in 2000 to at least 18% by 2005 and to 20% by 2010. - State budget focus: primary education level, mountainous and rural areas, high quality education and sectors that have difficulty attracting non-budgetary investments. - Obtain concessional funding from the World Bank, the Asian Development Bank, other international organizations and other countries. - Encourage private sector participation in education, particularly vocational training. - Encourage investment forms and expansion of the labor market to increase job opportunities and high productivity jobs for poor people and regions. - Implement preferential mechanisms for land use and provide concessional credit for investment in basic education. *Source: _cr0425 - 3. Infrastructure development to create opportunities for poor areas, poor communes and poor* ### 5. Improve the quality of health services, family planning programs, improve access and reduce ### _cr0425 - 5. Improve the quality of health services, family planning programs, improve access and reduce ### Strengthening grassroots health services and access - Improve access for the poor, especially women and children, to basic health services; ensure equality in accessing and using health service. - Reform the operation of the Committee for Health Care at the grass roots level. - Harness the capacity of the army health service by combining military and civil health care to provide health services to local people, especially in mountainous, islands, borders, and remote areas. - Regulate and develop the non-state health service. - Consolidate and develop health services in poor regions. Ensure that 100% of commune and villages will have clinics. - By 2005: - 100% of inter-commune polyclinics will have doctors; - 65% of all communes will have doctors (in mountainous areas: 50%); - 100% of commune clinics will have midwives (60% will be secondary midwives) and midwifery. - By 2010: - 80% of all communes will have a doctor (in mountainous areas: 60%); - 100% of villages will have at least primary health-care staff. - Expand training to develop local health staff, with priority to on-site training of ethnic staff in mountainous, remote, and disadvantaged areas. - Promulgate favorable policies (salary, health insurance, social insurance, hospital shift allowance, and preferential training...) to encourage health care staff working in mountainous, remote, isolated areas and areas that lack medical staff. ### Priority policies for disadvantaged and special groups - Draft and promulgate priority policy in health care for mountainous, remote and isolated regions, with special attention to ethnic minorities and poor people. - Special health policy is needed for women, children, and dependent elderly who live alone. - Promote the application of traditional medicine in health care. Encourage the development of herbal and traditional medicines to reduce the cost burden for the poor. ### Improving quality of public and curative care - Improve the quality of public health services, especially at the grassroots level, in mountainous, remote and isolated areas by applying the national standard for commune health services. - Plan the curative care network and define areas of specialization. - Strengthen professional capacity and medical ethics of health cadre. - Promote supervision and technical assistance from higher levels to the grassroots so grassroots can correctly diagnose and cure diseases, reduce overload at higher levels, and improve efficiency. ### Preventive health, infectious diseases, and maternal/child programs - Continue to develop preventive health care and health improvement, reducing infection and mortality rates. - Implement national targeted programs to control infectious and dangerous diseases affecting the poor, such as malaria, goiter, tuberculosis, leprosy, and mental illness. - Take effective measures to prevent spread of these diseases; take care of HIV/AIDS patients in the community and have policies about bringing up the children of those who died from HIV/AIDS; ensure no discrimination against HIV/AIDS patients in access to work. - Implement effectively the National Action Program for Children of Vietnam and the Strategy to Care for Maternal Health in the period 2001-2010. Ensure that all children can access basic health care services. - Take appropriate and effective measures to improve mother and child nutrition and improve the quality of health services provided to mothers and children. - Have means to prevent and overcome quickly health consequences caused by natural disasters. - Effectively implement national policy to prevent accidents, injuries and the effects of smoking. Strengthen supervision and checks to ensure food quality and safety. - Continue integration of National targeted programs between the health care sector and poverty reduction. Strengthen communication for health education; discourage backward customs, habits and lifestyles that are unhealthy. - Increase the percentage of families that have access to clean water and hygienic latrines. Accelerate socialization of health activities and mobilize people to participate in sanitation activities and preventive health care. ### Funding, financial protection, and medical supplies - Increase funding for health with priority to people living in mountainous, remote and isolated areas and regions with a high poverty rate. - Provide more funding to develop the grassroots health service network and improve provision of medical equipment; ensure supply of medical equipment is adequate according to the Medical Equipment Category List issued by the Ministry of Health. - Establish a financial mechanism to fully cover expenditures for regular health care activities of commune and district health centers, especially in mountainous, remote and isolated areas and areas with large ethnic minority populations. - Extend pre-pay health care services and health insurance, especially in rural areas, moving towards compulsory health insurance for all. - Implement policies and measures to reduce the cost burden for the poor for curative services. The state ensures adequate funding from the budget to carry out pro-poor policies such as: - reducing and exempting the cost of accessing health care services; - buying insurance cards for the poor, the dependent elderly who live alone, the disabled; - implement the hospital fee exemption policy for ethnic minority peoples and children under 6 years old. - The State provides free of charge common medicines to treat social diseases (such as malaria, goiter, indisposition, tuberculosis, mental problems) and basic vaccines for children. - The State implements targeted subsidy policies to prevent diseases in mountainous areas. - The State provides ordinary medical subsidy of VND 20 thousand per capita per annum for ethnic minority people living in Region III. ### Family planning and population strategy - Organize to implement effectively the Vietnam Population Strategy in the 2001-2010 period. - Consider implementation of family planning and reduction of the birth rate as an important step to poverty reduction. - Attach special attention to publicize family planning to couples of high fertility age, targeting males. - Diversify and use communication and educational channels to improve knowledge and commitment to family planning and maintaining an appropriate family size. - Step by step achieve an appropriate population growth rate to improve quality of life for all strata; integrate population targets in development plans. ### Promote culture, information dissemination, and expanding choices - Promote investment, develop culture and information, build an advanced culture with a strong national identity; preserve and restore tangible and intangible cultural heritage. - Encourage socio-economic associations, communities and foreigners to invest in culture and information dissemination at the grassroots level in isolated, remote, rural, mountainous and ethnic minority areas. - By 2005, ensure all communes have cultural centers (telephones, libraries, books, newspapers, meeting rooms) with regular operating hours. - Encourage social associations (voluntary youth, pupil, student associations) to carry out mobile information dissemination to poor households and ethnic minorities on cultural knowledge, new lifestyles, health and hygiene, science and technology. - Upgrade and expand the information system at grassroots level in many forms and in national and ethnic languages. - Improve education programs to be entertaining to attract participation of children and ensure all communes have newspapers and magazines to improve language ability of ethnic minority children. - Continue to complete nationwide broadcasting and television systems; ensure that more than 90% of households can see Vietnamese television programs and that 95% will be able to hear the Voice of Vietnam by 2005. - Government support policies to ensure poor communes have a communications station to disseminate State policies and information on science and technology. - Undertake initial investment in essential cultural and information facilities; supplemental O&M will be mobilized by communities. - Develop province- and area-appropriate management and operation mechanisms for these facilities. ### Protecting the environment and ensuring healthy lives for the poor - Implement the National Strategy for the Environment; integrate environment issues in plans, programs, and projects and make environmental protection a development evaluation criterion. - Enhance women's participation in environmental protection and maintaining a healthy life for the poor. Pay attention to safe use of chemicals, food safety and hygiene. - Improve water quality and increase the number of people having access to clean water. Improve the quality of natural and planted forest and enhance social, economic, and environmental value of forest land. - Deal with environmental deterioration in industrial zones, densely populated and crowded living quarters by encouraging clean production and tightly controlling waste; carry out pollution control and emergency services for environmental disasters. - Implement projects on environmental recovery and protection: protect watershed forests, build national parks and protected forest areas, plant trees, and preserve bio-diversity. - Establish public environmental protection projects in cities and towns such as garbage and waste water treatment, dust and noise pollution treatment; develop two-compartment latrine systems in rural areas; advise mountainous ethnic people about hygienic practices. - Prevent environmental problems by effective natural resource use, strict water resource management, waste control, and reasonable resettlement linked to development concerns. - Apply environmental impact estimates for every socio-economic development project and use policy measures to encourage private sector participation and clean production technologies. - Stop degradation of natural resources, protect atmosphere and forests, implement anti-drought measures and halt desertification; strengthen management of bio-technology and fresh water, and enforce safer use of harmful chemicals. - Manage land sustainably and plan reasonable use of land and water resources; pay attention to poor, remote and isolated areas to harmonize economic growth, poverty reduction and environmental protection. - Continue to implement the National Strategy for Rural Clean Water Supply and Sanitation during the period to 2010 (Decision No. 104/2000/QD-TTg dated August 25th, 2000): - Ensure that 85% of the rural population will have access to clean and safe water with the capacity of 60 liters/person per day and that 70% will have access to hygienic latrines and have good personal hygienic care by 2010. - Strive that by 2005, all kindergartens, schools, hospitals, medical stations, office buildings, and markets in rural areas will have clean water and hygienic latrines. - Priority to water-shortage and disadvantaged areas (drought areas, islands, high mountains, and saline areas). - Strengthen education, mobilization, control and supervision over household and concentrated livestock breeding and production processes in handicraft villages to ensure environmental protection of communes. - Provide state budget incentives to assist regions with difficult conditions, concentrating on poor people, especially mountainous areas with large ethnic minority populations; other regions will mobilize community and beneficiary contributions. - Government will assist investment in creating water resources, reserve capital from the state budget in assistance finance and concessional credit for rural water supply and sanitation projects. - Establish the National Environmental Fund with funds from the state budget (using revenues from natural resource and pollution charges), common contributions and other voluntary programs to cover costs of environmental activities. - Establish policies to reward compliance with laws on protecting forests, water resources and the environment; impose strict penalties on violators. - Encourage business production and social service organizations to develop environmental services and ecological tourism. - Employ tax policy to encourage clean production technologies and environmentally friendly energy use (gas, solar, wind, other thermal energy resources). - Complete and supplement legal and regulatory frameworks to implement Laws on Water Resources, Law on Environmental Protection, Law on Health Care for the People and other legal documents. - Strengthen international cooperation in environmental protection, especially with neighboring and regional countries on preventing pollution and transferring anti-pollution technologies. - Implement systems for environmental control and evaluation of natural resources, especially in remote, isolated, and poor areas; focus on timely reports on three environmental indicators: ratio of forest cover, percent of communes with access to clean water, and water and air quality; include sustainable environmental development in annual development plans. *Source: The Comprehensive Poverty Reduction and Growth Strategy (excerpt).* ### 1. Create favorable conditions in social infrastructure and production capacity so that regions can ### 1. Create favorable conditions in social infrastructure and production capacity so that regions can develop on their own; narrow the social development gap between different regions ### 1.1. Concentrate resources on successfully implementing the National Targeted Programs for Hunger Eradication, Poverty Reduction, and Employment during 2001-2005 - Continue to allocate resources and create opportunities for poor households to reduce poverty in a sustainable way: expand credit to poor households so that they can develop business production. - Expand agricultural and forestry extension to provide guidance to the poor on how to do business. - Replicate models for poverty reduction based on each region’s particular characteristics. - Expand the range of targeted support beyond the poor communes under the 135 program of the Government, and include provision of infrastructure, support for professional development, training of poverty reduction staff, stabilizing the issue of migration and building new economic areas. - Link poverty reduction with job creation. - Continue to provide loans to small projects for job creation through the National Fund for Job Creation. - Enhance the capacity of job service centers, improve the statistical system of information on the labor market, and train staff. ### 1.2. Additional measures to create more opportunities and resources for poverty reduction - Increase investment in underdeveloped areas to narrow the development gap between regions, and between urban and rural areas. - Encourage big enterprises to invest in poor areas to create more employment, and support the development of small and medium enterprises (SMEs). - State budget expenditure should focus more on infrastructure development, especially roads and irrigation, and create more non-agricultural jobs in rural areas. - Renovate infrastructure development mechanisms in poor areas. - Continue to improve the allocation of public expenditures to agriculture and rural development (e.g. agricultural extension, national targeted programs, etc.) to provinces, based on differences in socio-economic development, the poverty rate, and the province's own budget resources. - Mobilize the poor to build basic infrastructure as a job opportunity, with attention to attracting women and men to planning, building, and monitoring infrastructure, with priority given to women's needs. - Attach special importance to the development of rural roads in poor areas. - Develop special priority policies to expand rural roads as well as upgrade the quality of this network. - Replace bamboo-made “monkey” bridges; create opportunities for poor localities to manage development and maintenance of their own rural transport infrastructure. - Expand the supply of grid-transmitted electricity; organize, manage and operate the electricity distribution system, especially in remote and isolated areas with complicated terrain and low level of consumer discipline. - For border and island areas, areas far from the national power grid, and especially disadvantaged households eligible for policy-based support, the Government will finance part of the investment required for construction of low-voltage primary line and sub-lines transmitting power to homes. - Develop rural markets, especially in mountainous, isolated, remote areas and islands, to ensure provision of basic commodities and facilitate distribution of agricultural products. - Government priority support for price and transportation costs of essential goods serving production and livelihood needs of farm households in extremely disadvantaged communes. - Price and transport cost subsidies to extremely disadvantaged communes should be linked to agricultural extension, supporting shifts in breed structure, crop pattern, and other programs to support the poor in terms of capital, land, markets. - Ensure state subsidies reach the right beneficiaries and avoid excess reliance on state support. - Improve the investment and business environment and job security for the non-state sector. - Ensure at least the minimum level of benefits for rural migrants to cities. - Promote the market for services and the market for agricultural and rural products. - Build small district industrial zones and craft villages to create jobs for idle agricultural workers and to increase income of farmers. ### 2. Stabilize and raise the living standards of ethnic minorities - Continue to implement the socio-economic development program for extremely disadvantaged communes (program 135), ensure communes have essential infrastructure. - Develop infrastructure and commune clusters, plan residential areas, promote agricultural, forestry and fishery production, and train commune staff. - Step by step narrow the gap between ethnic groups in terms of material and spiritual lives. - Implement allocation of land and forests to individuals, households, and organizations in ethnic, mountainous areas, especially ethnic households. - Ensure entitlement of individual and collective land use rights to ethnic minorities and mountainous people. - Implement fixed-cultivation and fixed-residence, restrict free migration, stabilize production and improve living standards in a manner suitable to customs and practices, based on a master plan for population distribution promoting concentrated population clusters, commune clusters and townships. - Simultaneously consider infrastructure conditions: transport, water and electricity supply, communications, markets, etc. - Exploit the potential of these areas with respect to land and labor; intensify development of forestry, cash crops, fruit trees, and traditional handicrafts. - Provide guidance on how to do business, transfer technology and provide information to develop a market-oriented commodity producing economy; increase the share of industry and services and gradually eliminate autarchic economy in ethnic minority and mountainous areas. - Develop agricultural and forest production farms sized to management level and production capacity of each area; combine agro-processing industry development with product distribution for different economic sectors. - Raise intellectual level of the people and preserve traditional cultural values. - Give priority to training and utilizing ethnic cadre at local level and gradually increase the percentage of ethnic cadres. - Provide preferential treatment and effectively utilize village elders and village leaders; implement policy of maintaining strong solidarity among ethnic groups. - Consolidate and expand education, health care, culture and information activities for ethnic minority peoples. - Preserve and develop reading and writing in ethnic languages. - Provide access to kindergarten education for ethnic minority children and opportunities to complete primary education in Vietnamese. - Teach in ethnic languages at school for ethnic groups that have written languages. - Provide information on poverty reduction programs in an accessible manner and in places where ethnic peoples can have easy access. ### 3. Realize gender equality for the advancement of women and the benefit of children - Implement the National Strategy for the Advancement of Women in Vietnam to 2010 (Decision No. 19/2002/QD-TTg dated January 21, 2002). - Improve material and spiritual life of women; raise capacity, ability and role for equal participation in political, economic, cultural and social activities. - Ensure all women can exercise equal rights in labor and work by providing enough cultivated land and basic resources, and setting targets for hiring women in newly created jobs. - Complete regulations and strengthen monitoring to implement policies on women workers to ensure equality in vocational training, social insurance, labor safety and retirement policies. - Mainstream gender issues in national targeted programs; establish a database on the labor market and vocational training disaggregated by gender. - Develop vocational training and employment service centers for women. - Enhance women's ability to access the credit system and poverty reduction resources and coach women to utilize capital and obtain credit directly. - Ensure equal access to education and improve professional skills; encourage girls from remote, isolated and ethnic regions to attend secondary school, boarding schools, colleges and universities; provide support to poor women and girls to go to school. - Correct gender inequality in major fields of study and engender vocational training; review and improve textbook quality and remove prejudicial stereotyping of women. - Increase representation of women in managerial positions; establish the Learning Promotion Fund for women and set targets for percent of women in different levels of training and disciplines. - Improve women's health by increasing knowledge and improving behavior of health care and family planning service providers. - Strengthen basic health clinic system, including reproductive health and family planning consultations; encourage men to use contraceptive methods. - Ensure poor women can have easy access to health services. - Enhance quality of services before, during and after birth. - Implement measures to control HIV/AIDS and other sexually transmitted diseases. - Develop a database on occupational diseases. - Improve professional skills of health staff and quality of services in health clinics for women and children. - Address women's domestic work burden by investing in small-scale technologies for family needs, rural clean water, and energy projects. - Reorganize kindergarten and nursery school system to reduce domestic work burden for women and female children. - Launch campaigns to raise awareness about sharing family responsibilities. - Promote women's role and participation in decision-making, leadership and management positions by overcoming discrimination within the family and encouraging equal, respectful and cooperative family relationships. - Create favorable conditions for women to take part in village and commune meetings and in planning, implementing and monitoring projects and programs at all levels. - Review all policies on women workers and staff to ensure equal benefits. - Mainstream gender issues in political and administrative training courses. - Ensure equal participation and benefits for women in socio-economic development by improving laws and legal documents on protection of women's legal rights and benefits. - Improve awareness of, access to and utilization of legal tools for women. - Enhance capacity of administrative bodies and social organizations to implement policies and protect women's legal rights and benefits. - Strengthen women's rights in having the Land Use Registration Paper issued to them and enhance their role in decision making at the local level. - Strengthen public education campaigns with form and content appropriate for each area and group to improve awareness and responsibility of government bodies, associations, families and all citizens in the mission of gender equality. - Respect and ensure the rights of children in the family and society; strengthen public education and raise family awareness in nurturing children. ### III. DEVELOPMENT OF SOCIAL SAFETY NETS FOR THE POOR AND FOR VICTIMS OF NATURAL DISASTERS ### 1. Focus support on the poor, ethnic minority groups and other vulnerable people in society - Improve the ability of the poor to access good quality basic services and resources: primary health care, primary education, reproductive health, sound hygiene, good nutrition, homes, and free legal aid. - Establish a priority system for disadvantaged groups to benefit from national targeted programs on social development. - Establish a preferential regime for poor and vulnerable people to reduce contributions, fees and costs related to social transactions and access to basic social services, and in cultural and educational activities to elevate intellectual level and legal knowledge at no cost. - Address housing problems for the poor; develop flood-resistant residential quarters in Mekong River Delta and plan to remove temporary houses for poor households. ### 2. Expand social protection and the safety net - Amend State policies on support to disabled and vulnerable people to help them be self-employed or employed by others so they can earn enough to feed themselves and participate in community and social activities. - Complete social insurance policies to expand coverage to all parties and ensure consistency between insurance contribution and insurance benefit. - Diversify the voluntary safety net. - Strengthen measures to protect plants and animals (veterinary services and general epidemic management programs) in remote areas. - Develop pilot policies on plants, animal husbandry and market insurance in rural areas. - Strengthen agricultural extension as an effective method to reduce vulnerability of the poor. - Develop community-based insurance programs for the informal economic sector following the principle of group insurance (minimum household insurance). - Expand social protection and the social safety net through different funds. - Provide humanitarian support on a regular basis for the poor and hungry, especially those unable to work and with no one to rely upon; organize and carry out activities of these funds in communities and villages where the poor and vulnerable are concentrated. - Give special attention to assistance in kind (such as rice, foodstuff, clothing) to people in rural and selected urban areas in very difficult circumstances. - Supplement policies and measures to protect and educate children in extreme difficulty: disabled children and orphans, street children, working children, and victims of Agent Orange and HIV/AIDS. - Improve family responsibility in protecting and educating children; mobilize society to protect children in extreme difficulty. - Develop policies and measures to support the disabled, the elderly (those without any support), victims of toxic chemicals and HIV/AIDS. - Develop social relief centers in poor areas and localities that often suffer shocks to nurture those who lose ability and opportunity to earn a living. - Implement specific stipulations of Government Decree No. 07/2000/ND-CP dated March 9, 2000 on the policy to provide social relief in the three-year period from 2001-2003. - Adjust method of state budget allocation to implement social policies; give local authorities the initiative, especially at commune/district level, to strengthen development of community funds at village and commune levels. ### 3. Develop solutions to support the poor and the vulnerable to improve their conditions to participate in labor markets - Improve access of poor workers and disadvantaged groups to the labor market and to training. - Resolve the problem of labor redundancy and gradually introduce unemployment insurance. - Increase the number and quality of jobs created, especially in the non-state sector. - Complete the Labor Law to promote labor market development and ensure job security. - Oppose arbitrary dismissals; ensure stable work with rising income and comfortable working conditions. - Reduce workplace accidents. - Ensure gender equity with respect to retirement age; oppose use of "early retirement" as a tool to solve redundancy problems at SOEs and other labor market problems. ### 4. Develop an effective system of emergency social relief solutions - Develop an effective system of emergency social relief solutions for poor and vulnerable people hurt by natural disasters, accidents, and other negative social shocks. - Improve mechanism to establish and coordinate the Emergency Relief Fund. - Help the poor take preventive measures against natural disasters (storms, flood, drought, pests) by organizing training and transferring knowledge and practical experiences about managing natural disasters. - Provide a share of needed financial support to help improve housing conditions to prevent storms and flood. - Reorganize populated areas, production infrastructure and social infrastructure to facilitate prevention and combat of natural disasters and to provide relief. - Organize and prepare aid facilities to respond rapidly to limit negative effects of natural disasters; provide guidance for the poor to take initiative to help each other when hit by natural disasters. - Organize assistance to help the poor recover from natural disasters so they can quickly resume normal life and production. - Provide necessary factors of production (seeds, trees, livestock, tools for cultivation); solve environmental problems after disasters. - Build facilities to store food, foodstuffs, and clothes in communities where natural disasters are frequent for rapid distribution to disaster victims. *Source: _cr0425 - 1. Create favorable conditions in social infrastructure and production capacity so that regions can* ### 5. Expand the participation and enhance the role of domestic social organizations and non- ### _cr0425 - 5. Expand the participation and enhance the role of domestic social organizations and non- ### Participation of domestic social organizations and NGOs - The Fatherland Front at all levels takes the lead and coordinates with governments of different levels and mass organizations to develop measures to motivate agencies, enterprises and the entire people to take part in social relief and to help the poor. - Encourage relief aid and humanitarian assistance from non-governmental organizations, mass organizations, and social organizations to develop the social safety net, to effectively help the vulnerable, especially: - the elderly without support, - orphan children, - victims of toxic chemicals and HIV. ### Total investment requirement for Five Year Development Plan 2001–2005 - Preliminary funding estimates for industries and sectors (agriculture, forestry, fishery; industry and construction; transportation, post and communications; education; culture; health; science and technology; services; public sector; and various national target programs on poverty reduction) is about VND 840 – 980 thousand billion (US$ 60 – 70 billion), equal to 1.5-1.75 times compared to total investment implemented during the 1996-2000 period. - Table of total investment required (VND thousand billion, at 2000 price): - Total 840 - 980 - Agriculture, Forestry, fishery and Irrigation 110 – 133 - Industry and construction 370 – 400 - Transportation and post 126 – 147 - Education and training 30 – 40 - Technology, science and environment 6 – 14 - Health and social affairs 16 – 28 - Housing, public services, water supply 118 – 130 - Culture, information and sports 14 – 15 - State administration 26 – 28 - Other sectors and activities 24 – 35 ### Mobilization capacity for total social investment (2001-2005) - It is possible to mobilize over a period of five years VND 840 thousand billion, including: - Domestic resources: about 21% of GDP, totaling about VND 560 thousand billion, representing two thirds of total capital investment, or about USD 40 billion. - External resource mobilization: estimated to be about US$ 20 billion, of which: - total registered capital of direct foreign investment projects (FDI) and increases in the capital of existing projects: about US$ 15 billion (US$ 12 billion in registered capital from new projects and US$ 3 billion in increased capital from existing projects). - funds available for implementation: estimated at US$ 11 billion. - total Official Development Assistance (ODA): estimated to total US$ 9 billion (US$ 7,5 billion in loans and US$ 1,5 billion in grants). - Projections on capital resource mobilization for 2001-2005 period (at 2000 price): - Total 1996-2000 implementation: 555 (VND thou. billion) 100.0% → Mobilization ability 2001-2005: 840 (VND thou. billion) 100.0% - Of which: - Domestic capital 320.5 (57.7%) → 561 (66.8%) - Foreign capital 234.5 (42.3%) → 279 (33.2%) - I. State sector (public investment) 295.8 (53.3%) → 467 (55.5%) - 1. Domestic mobilization 198.9 (35.8%) → 341.0 (40.6%) - State budget (exc. ODA) 83.9 (15.1%) → 123.2 (14.7%) - Credit (excl. on-lending ODA) 17.7 (3.2%) → 55.8 (6.6%) - State enterprise 97.3 (17.5%) → 162 (19.3%) - 2. Official development assistance (ODA) 96.5 (17.4%) → 126 (15.0%) - II. Private sector 259.6 (46.8%) → 373 (44.4%) - 1. Domestic private sector 121.6 (21.9%) → 220 (26.2%) - 2. Foreign direct investment (FDI) 138 (24,9) → 153 (18.2) - Interpretation of mobilization projections: - State sector share projected at 55.5%; state budget (excluding ODA) 14.7%; state credits 6.6%; state enterprises 19.3%; ODA 15%; domestic private sector 26.2%; FDI 18.2%. - Private sector share projected to increase from 21.9% (1996-2000) to 26.2% (2001-2005) but remains around one fourth of total social investment. ### Priority directions for 2001-2005 - Agriculture and rural development: - Prioritize shifting plant and animal production structure, expand production, develop infrastructure (flood protection and irrigation, rural roads, drinking water and electricity), processing and post-harvest activities, afforestation and forest protection, aquaculture, apply new varieties, with priority to poor, remote and mountainous communes and ethnic groups. - Health care: - Prioritize development of the basic health care network to ensure 100% of communes have medical stations with basic equipment and medicine. - Increase health staff to remote, mountainous and difficult areas. - Invest in preventative health care and primary health care; upgrade hospital systems, polyclinics, and quality at commune level. - Provide effective financial support for the health care of the poor. - Training and education: - Prioritize upgrading and building new schools to ensure enough schools from kindergarten to upper secondary. - Rehabilitate schools in difficult and disaster-prone areas. - Renovate training contents and programs; expand teacher training centers. - Transport: - Invest in and ensure efficiency in developing transport, especially rural areas. - Provincial and district transport master plans must be integrated with the national transport master plan. - Continue the program of the State and the people working together, ensuring 60% of inputs are from local people (labor, local materials, portion in cash); Government to provide 30% of total inputs in the form of necessary materials and technical support. - Science and technology: - Attach special importance to infrastructure for information technology, software technology, and information industry. - Environmental protection: - Continue to invest in environmental protection, implement and expand projects to improve the environment and resolve environmental pollution. - Integration of targeted programs: - Ensure programs targeting difficult regions and many poor households (Hunger Elimination and Poverty Reduction and Employment Program; Population and Family Planning Program; Programs to prevent social diseases, dangerous infectious diseases and HIV/AIDS; Program for clean water and hygienic rural environment; Program for the development of culture, education and training; Social and Economic Development Program for Extremely Disadvantaged Communes (Program 135); Five Million Hectare Forestry Project) are integrated into social development plans of sectors and provinces. - State budget priorities: - Give priority to provinces and cities with low HDI and GDI indicators to reduce regional gaps and encourage poor-focused policies. ### Allocation scenarios and implications - Two scenarios for allocation of social investment capital: - Scenario 1: Total VND 840.0 thousand billion (US$ 60 billion) — minimum to meet objectives quantitatively but not qualitatively. - Scenario 2: Total VND 980.0 thousand billion (US$ 70 billion) — higher capital to achieve objectives in both qualitative and quantitative terms. - Table 5.3 (selected figures, Thous. Bill. VND and %): - Total 1996-2000 actual: 555.0 (100.0%) - Plan 2001-2005 Scenario 1: 840.0 (100.0%); Scenario 2: 980.0 (100.0%) - Agriculture, Forestry, Fishery and Irrigation: 1996-2000 actual 63.0 (11.4%) → Scenario 1 109.2 (13.0%) → Scenario 2 133.0 (13.5%) - Industry and Construction: 238.0 (43.0%) → Scenario 1 369.6 (44.0%) → Scenario 2 406.0 (41.4%) - Transportation and Post: 85.4 (15.4%) → Scenario 1 126 (15.0%) → Scenario 2 147.0 (15.0%) - Housing, Public Services, Water Supply: 82.6 (15.0%) → Scenario 1 117.6 (14.0%) → Scenario 2 126.0 (12.9%) - Technology, Science, Environment, Basic Surveys: 2.8 (0.4%) → Scenario 1 5.6 (0.6%) → Scenario 2 14.0 (1.4%) - Education and Training: 15.4 (2.7%) → Scenario 1 30.8 (3.7%) → Scenario 2 42.0 (4.3%) - Health and Social Affairs: 8.4 (1.5%) → Scenario 1 16.8 (2.0%) → Scenario 2 28.0 (2.9%) - Culture, Information and Sports: 7.0 (1.3%) → Scenario 1 14.0 (1.7%) → Scenario 2 21.0 (2.1%) - State Management: 18.2 (3.2%) → Scenario 1 26.6 (3.2%) → Scenario 2 28.0 (2.9%) - Other sectors and activities: 33.6 (6.1%) → Scenario 1 23.8 (2.8%) → Scenario 2 35.0 (3.6%) - Under Scenario 1: - Agriculture, forestry, fishery and irrigation: VND 109 thousand billion or 13% of total. - Industry and construction: VND 369 thousand billion or 44%. - Transportation and post: VND 126 thousand billion or 15%. - Science, technology and environment: VND 5.6 thousand billion or 0.6%. - Training and education: VND 31 thousand billion or 3.7%. - Health, culture, sports: VND 30 thousand billion or 3.7%. - Housing, water supply, public services: VND 117.6 thousand billion or 14%. - Public administration: VND 50.4 thousand billion or 6%. - Note: Objectives achievable quantitatively but not qualitatively under Scenario 1. - Under Scenario 2: - Agriculture, forestry, fishery and irrigation: VND 133 thousand billion or 13.5%. - Industry and construction: VND 406 thousand billion or 41.4%. - Transportation and post: VND 147 thousand billion or 15%. - Science, technology, environment and basic surveys: VND 14 thousand billion or 1.4%. - Training and education: VND 42 thousand billion or 4.3%. - Health, culture, sports: VND 28 thousand billion or 2.9%. - Housing, water, public infrastructure and services: VND 126 thousand billion or 12.9%. - Public administration and other: VND 63 thousand billion or 6.5%. - Under this scenario, objectives can be achieved in both qualitative and quantitative terms. - Strategy to achieve Scenario 2: - Mobilize additional VND 140 thousand billion relative to Scenario 1. - 50% of the additional funding will be mobilized from domestic resources, mainly from the private sector and households. - State will revise investment policies to strongly encourage private sectors and other sectors to expand investment. - Mobilize remaining additional funding from the international community and foreign investors. *Source: Ministry of Planning and Investment — content from The Comprehensive Poverty Reduction and Growth Strategy (excerpt).* ### 1. Investment capital requirement from the state budget ### 1. Investment capital requirement from the state budget ### Capital expenditure requirements (overview) - Total requirement for capital expenditure from the state budget is about VND 190-200 thousand billion. - Sectoral breakdown (major items described in source text): - Agriculture, forestry and fishery: more than VND 50-60 thousand billion for developing new variety of plants and husbandry, aquaculture infrastructure, upgrading and renovating irrigation systems, building reservoirs with flood preventing in Central part, and repairing deteriorated dykes. - Transport, post and communications: VND 60-70 thousand billion for building new and upgrading 5,000 km of highway, restoring bridges along the Thong Nhat railway, expanding and gradually modernizing important sea ports such as Hai Phong, Sai Gon, Da Nang, Can Tho; consolidating and developing inter-provincial roads in Mekong river delta, Central Highlands, and Northern Mountainous areas. - Education and training, health, social and other services: 50-65 thousand billion for expanding the school network, improving the quality of teaching, strengthening primary health care; resolve the problems of urban water supply and drainage. ### 2. Requirement for current expenditure from state budget ### Recurrent expenditure totals and sector shares - Total requirement for recurrent expenditure in the state budget for the 2001-2005 period is about VND 450-460 thousand billion (not including repayment of principal). - Sector allocations (highlights): - Agriculture, forestry and fishery: more than VND 20 thousand billion. - Transport, post and communication: VND 20 thousand billion. - Health and social spending: VND 100 thousand billion. - Training and education: about VND 110-120 thousand billion. - Coverage targets noted: covering 80% of primary school costs (for cities and towns, the state budget covers 60-80%); 60% for secondary schools (for cities and towns, 40-50%); 20% for vocational training (cities and towns, 5-10%); and to cover the cost of exempting school fees and other supporting policies for children from poor households in remote, mountainous and ethnic areas. ### Recurrent expenditure program growth and asset maintenance - Recurrent expenditure of programs and projects during 2001-2005 is estimated to total about VND 10 thousand billion, representing an increase of 1.5 times compared to the 1996-2000 period. - Cost of asset maintenance over 2001-2005 is estimated at VND 52 thousand billion, an increase of VND 20 thousand billion or 164% of maintenance costs during the 1996-2000 five year period. - Maintenance financing requirements by sector (2001-2005): - Agriculture, irrigation, fishery: VND 4.6 thousand billion, equal to 2.8 times the 1996-2000 period. - Transport, post and communications: VND 16 thousand billion, equal to 2.1 times the 1996-2000 period. - Training and education: VND 9 thousand billion, equal to 1.9 times. - Health care: VND 2.5 thousand billion, equal to 2.3 times. - Maintenance requirement for 2003-2005 (three-year subtotal): VND 32.5 thousand billion, of which transportation, post will require VND 10.2 thousand billion; training and education will require VND 5.7 thousand billion. ### SOE and state-owned bank reform financing (2001-2003) - Total estimated financing required from the state budget for SOE and state-owned commercial bank reform for 2001-2003: about VND 35 thousand billion. - Cost of SOE restructuring: VND 10.6 thousand billion. - Resolving SOE bad debts: VND 4.6 thousand billion. - Cost of covering redundancy: VND 6 thousand billion. - Provision of regulation capital for financial companies: VND 1.5 thousand billion. - Cost of reforming the four state-owned commercial banks: VND 17 thousand billion. ### 3. Mobilization capacity from state budget ### Fiscal targets and revenue projections - Undertake legal and policy reform to ensure mobilization rate of the state budget is about 20% of GDP, of which revenues from taxes and fees will account for approximately 18%. - Assumptions for the five year period 2001-2005: - GDP growth rate: 7.5% per year on average. - Estimated state budget revenues for 2001-2005: VND 620 thousand billion, of which revenues from taxes and fees will be VND 560 thousand billion. ### Expenditure envelope and composition (2001-2005, excluding principal repayment) - Estimated state budget expenditure over 2001-2005: about VND 630 thousand billion, a rise of VND 220 thousand billion, or 1.5 times the 1996-2000 period. - Investment expenditure: VND 185 thousand billion, an increase of VND 60 thousand billion, or 1.48 times. - Current expenditure: VND 445 thousand billion, an increase of VND 157 thousand billion or 1.5 times. ### State budget expenditure by sector (summary of Table 5.4; unit: 1,000 billion) - Total (1996-2000 actual): Total 414.4; Investment 126.0; Recurrent 288.4. - Total (2001-2005 estimated): Total 630.0; Investment 185.0; Recurrent 445.0. - Of which (2001-2005 estimated): - Agriculture, forestry, fishery and irrigation: Total 65.8; Investment 46.2; Recurrent 19.3. - Transportation and post: Total 72.8; Investment 54.6; Recurrent 18.2. - Housing, water supply, public infrastructure and services: Total 28.0; Investment 21.0; Recurrent 7.0. - Science, technology, basic surveys, environment: Total 14.0; Investment 4.2; Recurrent 9.8. - Education, general training, and vocational training: Total 114.8; Investment 14.0; Recurrent 100.8. - Health and social affairs (social security, insurance, allowance...): Total 119.0; Investment 12.6; Recurrent 106.4. ### Expenditure structure (summary of Table 5.5; unit: %) - Total: 1996-2000 (actual) — Total 100.0; Investment 100.0; Recurrent 100.0. 2001-2005 (estimated) — Total 100.0; Investment 100.0; Recurrent 100.0. - Sector shares (2001-2005 estimated): - Agriculture, forestry, fishery and irrigation: Total 10.4; Investment 24.8; Recurrent 4.4. - Transportation and post: Total 11.5; Investment 29.3; Recurrent 4.0. - Housing, water supply, public infrastructure and services: Total 4.4; Investment 11.3; Recurrent 1.6. - Science, technology, basic surveys, environment: Total 2.2; Investment 2.3; Recurrent 2.2. - Education, general training and vocational training: Total 18.2; Investment 7.5; Recurrent 22.6. - Health and social affairs: Total 18.8; Investment 6.8; Recurrent 23.9. ### Poverty-related sectoral five-year expenditure (2001-2005) - Five year expenditure plan for six sectors closely linked to poverty reduction is estimated at about VND 420 thousand billion, representing two thirds of total budget expenditure, or 1.6 times actual expenditures in 1996-2000. - Sectoral totals and percent increases (2001-2005): - Agriculture, forestry, fishery and irrigation: VND 65.8 thousand billion, increase of 55%. - Transportation and post: VND 72.8 thousand billion, increase of 50%. - Housing, water supply, public infrastructure and services: VND 28 thousand billion, increase of 54%. - Science, technology and environment: VND 14 thousand billion, 100% increase. - Education and vocational training: VND 114.8 thousand billion, increase of 75%. - Health and social spending: VND 119 thousand billion, increase of 57%. ### III. POVERTY REDUCTION ### 1. Expenditure requirement for poverty reduction targets (2003-2005) - Total expenditure requirement to meet selected social and poverty reduction objectives of eight sectors over 2003-2005: VND 84 thousand billion (VND 84,475 billion in detailed table), of which: - Recurrent expenditure: VND 54 thousand billion (VND 54,002 billion in detailed table). - Capital expenditure: VND 30 thousand billion (VND 30,473 billion in detailed table). ### Projections on state spending priorities for 8 selected social and poverty reduction objectives over 3 years, 2003-2005 (Table 5.6; Unit: VND billion) - Totals by year: - 2003: 28,330 - 2004: 27,870 - 2005: 28,275 - Total (2003-2005): 84,475 - Recurrent by year: - 2003: 17,280 - 2004: 18,001 - 2005: 18,719 - Total recurrent (2003-2005): 54,002 - Investment by year: - 2003: 11,050 - 2004: 9,869 - 2005: 9,556 - Total investment (2003-2005): 30,473 - Breakdown by sector (2003 / 2004 / 2005 / Total): - Agriculture: 5,002 / 4,906 / 4,772 / 14,681 - Recurrent: 3,001 / 2,944 / 2,863 / 8,808 - Investment: 2,001 / 1,963 / 1,909 / 5,872 - Health: 3,752 / 3,835 / 3,971 / 11,558 - Recurrent: 3,276 / 3,348 / 3,384 / 10,008 - Investment: 476 / 487 / 587 / 1,550 - Education: 4,520 / 4,555 / 4,589 / 13,664 - Recurrent: 1,778 / 1,813 / 1,847 / 5,438 - Investment: 2,742 / 2,742 / 2,742 / 8,226 - Urban development: 1,500 / 1,500 / 1,500 / 4,500 - Recurrent: 75 / 75 / 75 / 225 - Investment: 1,425 / 1,425 / 1,425 / 4,275 - Electricity (All capital expenditure): 1,248 / 261 / 75 / 1,584 - Transportation: 3,083 / 2,982 / 2,890 / 8,955 - Recurrent: 925 / 1,041 / 1,175 / 3,141 - Investment: 2,158 / 1,941 / 1,715 / 5,814 - Labor and social insurance (All recurrent expenditure): 7,225 / 7,731 / 8,272 / 23,229 - National targeted programs: 2,000 / 2,100 / 2,205 / 6,305 - Recurrent: 1,000 / 1,050 / 1,103 / 3,153 - Investment: 1,000 / 1,050 / 1,103 / 3,153 ### Poverty-reduction priorities and program notes - Agriculture and rural economy: focus on basic infrastructure, improved research, provision of new varieties, extension services, improving/upgrading/ building irrigation systems in remote areas; budget estimated at about VND 14.7 thousand billion (2003-2005). - Health care: improving quality and access to basic health care for the poor; reducing infectious diseases; preventing HIV/AIDS; total allocation VND 11.5 thousand billion (VND 10 thousand billion recurrent; VND 1.5 thousand billion capital). - Education: upgrading infrastructure and facilities for education universalization; improving quality in remote areas and ethnic groups; exemption of education charges for poor households; proposed allocation VND 13.7 thousand billion (VND 5.4 thousand billion recurrent; VND 8.3 thousand billion capital). - Urban infrastructure: total VND 4.5 thousand billion (VND 0.2 thousand billion recurrent; VND 4.3 thousand billion capital) to improve housing, water supply, electricity in poor urban areas. - Electrification: budget VND 1.6 thousand billion to connect remote communes to national grid; government to finance high voltage lines, transformers, meters; household connections funded by local budgets, concessional credits and contributions from the poor. - Transport: priority to road links to remote communes and upgrading rural roads in poor districts; total cost about VND 9 thousand billion (recurrent > VND 3 thousand billion; capital VND 6 thousand billion). - Labor and social safety net: covers costs implemented through MOLISA and provinces including social guarantees, protection centers, transfers, national programs for job creation, drug control, prostitution control, pre-harvest hunger prevention and disaster relief; total mainly recurrent: VND 23.2 thousand billion. - National targeted programs: program 135, national job creation program, rural water and sanitation program; total VND 6.3 thousand billion (VND 3.1 thousand billion capital; VND 3.2 thousand billion recurrent for 2003-2005). ### 1.2. Programs and projects to be expanded to disadvantaged areas (selected) - Irrigation development in Central Highlands and Central Region (Thanh Hoa to Ninh Thuan) to expand irrigated land to about VND 8 thousand hectares and develop reservoirs for flood prevention: total budget over 2001-2005 estimated at VND 23 thousand billion (Central Highlands VND 3 thousand billion; Central Region VND 20 thousand billion). - Develop infrastructure in density residential areas, upgrade floors to reduce flood damage, and build houses for 200 thousand households in the Mekong River Delta: total budget about VND 7 thousand billion. - Demolish dilapidated houses and replace for 440 thousand ethnic minority and heavily flood-affected households (100 thousand Northern Mountainous; 90 thousand in 4 Central Highland provinces; 130 thousand in Mekong River Delta; 120 thousand in other provinces): total budget about VND 10 thousand billion. - Support mountainous people to make terraced farms and develop alternative crops to replace opium in upland areas: total investment support (2001-2005) about VND 200 billion. ### Implementation note - The list of industries and sectoral activities may be incomplete and may have overlapping investment estimates between growth and poverty reduction; sectors are important and expenditure requirements are substantial. Resource mobilization and prioritization will occur when integrating these into investment development plans of ministries, provinces, and national targeted programs. ### 2. National targeted programs related to poverty reduction ### General funding structure and totals - Investment funding for national targeted programs and projects comes from state budget and provincial budgets, integrated funding from various programs/projects, loans, and community mobilization. - Funds from the state budget are estimated to account for 30% of the total investment for these programs and projects. - Estimated cost of eight programs and national projects in the Five Year Plan (2001-2005): about VND 70-75 thousand billion (USD 5-5.5 billion). ### Total investment requirement for national programs and projects (Table 5.7; Total investment 2001-2005, Thousand billion) - Total: 70 - 75 1. Poverty reduction and employment: 27 - 28 2. Clean water and hygienic rural environment: 8.0 - 8.5 3. Population and family planning: 3.5 - 4.0 4. Program to prevent communicable and dangerous diseases and HIV/AIDS: 5.0 - 5.5 5. Cultural development program: 1.5 - 2.0 6. Training and education program: 6.5 - 7.0 7. Program for the social and economic development of communes experiencing special difficulties: 8.5 - 9.0 8. Five million hectare forestry project: 10.0 - 11.0 ### Estimated coverage and state budget role - Based on demand and mobilization capacity, total budget for these projects and programs for 2001-2005 is estimated to be twice total investment during 1996-2000: about VND 60 thousand billion, of which the state budget will cover one third. ### Objectives and estimated costs of selected national targeted programs (highlights) - National targeted program for hunger eradication, poverty reduction and employment: total investment about VND 22.5 thousand billion. - Clean water and hygienic rural environment: total investment about VND 7.1 thousand billion. - Population and family planning programs: total investment about VND 2.5 thousand billion. - Program to prevent communicable and dangerous diseases and HIV/AIDS: total budget about VND 4.5 thousand billion. - Cultural development program: total budget about VND 1.3 thousand billion. - Education and training programs: total budget about VND 6 thousand billion. - Social, economic development programs for extremely disadvantaged communes (program 135): total budget about VND 7.6 thousand billion. - Five million hectare forestry project: total budget about VND 8.5 thousand billion. ### Additional financing note - Continue to provide investment support and mobilize resources from communities and beneficiaries and implement projects supported by international community and government agencies in areas such as agricultural diversification; rural infrastructure development; poverty reduction in six Northern Mountainous provinces; poverty reduction in five central provinces; community based rural development; forest protection and rural development. *Source: _cr0425 - 1. Investment capital requirement from the state budget* ### 3. Implementation mechanism ### 3. Implementation mechanism ### Decentralization and local autonomy - Continue decentralization; expand the autonomy of local authorities to take the initiative in prioritizing projects and programs. - Put the grassroots in charge of the management and construction of local economic development and poverty reduction projects in line with the direction, goals and plans approved by the Government to ensure their effectiveness and to avoid risks. - Enhance the role, accountability and management capacity of local bodies in human resource allocation and implementation of poverty reduction projects. - Set clear criteria for budget allocation and for prioritizing public projects at the local level. - Integrate and move towards unifying the scope of national targeted programs, paying special attention to programs such as commune cluster development, resettlement and fixed cultivation, and socio-economic development programs for extremely disadvantaged communes in mountainous, remote and isolated areas. - Allow for greater ownership and initiative at the commune and district level in managing and using the Community Fund, Social Relief Fund, etc. - Enhance efficiency of capital utilization for development investment programs, national targeted programs, pro-poor programs and projects. - Strengthen decentralization of management and utilization of ODA resources. - Simplify investment and administrative procedures to accelerate program and project implementation. ### Institutional arrangements and assignment of responsibilities - Implementation requires focused guidance and close coordination among Government Office, Ministry of Planning and Investment, Ministry of Labour, Invalids and Social Affairs, Ministry of Finance, the State Bank of Vietnam, Government Organization and Personnel Committee, Steering Committee of SOE Reform and Development, Ministry of Agriculture and Rural Development, Ministry of Fishery, Ministry of Industry, Ministry of Transport and Communications, Ministry of Health, Ministry of Education and Training, Ministry of Construction, Committee for Ethnic Minorities and Mountainous Areas, Ministry of Science, Technology and Environment, General Statistical Office, Central Office of the Women’s Union, etc. - Research to establish a Steering Committee for the Comprehensive Poverty Reduction and Growth Strategy (CPRGS) to help the Prime Minister provide guidance. - The Prime Minister assigned the Ministry of Planning and Investment to: - Lead and cooperate with concerned organizations to guide line ministries, sectoral agencies and provinces to set up plans and integrate the CPRGS into national and annual and five year socio-economic development plans. - Inspect, monitor and prepare a comprehensive overview of implementation and report to the Prime Minister. - The Ministry of Planning and Investment will coordinate with line ministries to establish an Inter-ministerial Working Unit (with representatives from concerned line ministries) to coordinate CPRGS implementation, monitoring and evaluation. - A Secretariat will be formed to assist the Inter-ministerial Working Unit. - Line ministries, government agencies and provinces will concretize and incorporate CPRGS objectives into their annual plans; organize annual monitoring and evaluation and report results and propose measures to improve performance. - The General Statistical Office, Ministry of Labour, Invalids and Social Affairs and other concerned ministries will plan surveys and collect information using the monitoring and evaluation indicator system in the Strategy. - Every year, based on state budget funding capacity and progress, the Ministry of Planning and Investment, the Ministry of Finance, governmental agencies and provinces will determine expenditure levels needed to implement the Strategy. ### Capacity development of implementation apparatus - Assign responsibility to concerned line ministries, provincial and local authorities regarding monitoring and evaluation of CPRGS and other sectoral activities within its framework. - Strengthen the network and contingent of poverty staff at all levels, especially in extremely disadvantaged communes. - Increase professional level of staff and provide support to help them carry out their tasks. ### Participation of people, civil society and social organizations - Promote widespread propagation and dissemination of the CPRGS to reach all the people. - The General Statistical Office, Ministry of Labour, Invalids and Social Affairs and other concerned ministries will annually organize collection of information based on the Strategy's monitoring and evaluation indicators. - Step-by-step develop a widely accessible website on the CPRGS. - Institutionalize consultation among line ministries, sectoral agencies, poor communities, business organizations, domestic and international social organizations and local community-based organizations to improve monitoring and evaluation quality. - Establish criteria and procedures to evaluate and select public investment programs and projects with priority given to assessing social and economic benefits. - Identify, analyze and evaluate possible risks during implementation and establish appropriate policies to minimize them. ### Monitoring and evaluation: objectives and coverage - Objective: organize monitoring and evaluation to ensure laid-out targets are achieved within projected timetable and resources; uncover irrationalities in mechanisms, policies and sectoral measures and make adjustments and policy amendments. - Monitoring and evaluation covers: - (i) effectiveness of economic growth and poverty reduction; - (ii) progress in resource mobilization and implementation; - (iii) assessment of the impact of policies and programs on poverty reduction and socio-economic impact on the poor and society. - Monitoring and evaluation of growth and poverty reduction targets will be conducted at national, sectoral and local levels and disaggregated by rural/urban, gender and social quintile. ### System of indicators - The indicator system includes: - (i) indicators to monitor outputs of economic development and poverty reduction; - (ii) indicators to monitor and evaluate inputs of resources for the Strategy; - (iii) indicators to monitor and evaluate achievements according to targets laid out in the Strategy; - (iv) indicators to evaluate the impact of every program and strategy affecting the poor and the whole society. - Indicators will be developed in detail by regions, provinces, rural/urban areas and gender and further disaggregated by economic sector, social quintile and ethnicity. - The listed categories of indicators include: - Development objectives (indicators related to goals covering socio-economic sectors related to the poor). - Indicators that are targets for a given period, to the year 2005 and 2010 in particular. - Intermediate indicators (monitoring indicators) to monitor actual progress. - Each indicator is shown with its statistical frequency and monitoring organization (see Appendix 1). ### Responsibility and data collection for monitoring and evaluation - To ensure unbiased, reliable and high-quality assessments, information for CPRGS evaluation must be systematic, comprehensive, practical and updated regularly. - The General Statistical Office will conduct the household living standard survey on a bi-annual basis; the survey format will combine a fixed module and an alternate module. - Promulgate the Law on Statistics to encourage dissemination of information and data to users and improve policy analysis capacity of Government officials. - Independent research organizations (NGOs, universities, etc.) will organize consultations with the people, collect and analyze data to assess situation and trends in economic growth and poverty. - Line ministries and provinces will prepare and make public thematic and summary reports of CPRGS implementation within their sector or locality. - The Ministry of Planning and Investment will coordinate with line ministries to prepare and make public the Annual Report on Implementation of the CPRGS. - The Government of Vietnam welcomes participation of specialists, domestic and international organizations (including donors, NGOs, social and professional organizations at local and community level) in preparation and implementation of the CPRGS. - The Government calls on international donors to provide financial and technical support and hopes they will link their medium term (3 to 5 years) country support strategy with the CPRGS. ### Key numeric targets and indicators (as presented) - GDP in 2010 to double GDP in 2000. - Value-added in industry and construction to grow by 10.0-10.5% on average during the period 2001-2010. - Value-added of agriculture, forestry and fishery to grow by 4.0-4.5% on average during the period 2001-2010. - Value-added of services to grow by 7.0-8.0% on average during the period 2001-2010. - Export growth rate to more than double GDP growth rate. - By 2010: share in GDP of agriculture will be 16-17%; industry 40-41% and services 42-43%. - By 2010: share in total labour force of industry will be 23-24%; agriculture, forestry and fishery 50%; services 26-27%. - To ensure domestic saving exceeds 30% of GDP. - Mobilize VND 840 thousand billion (US$ 60 billion) for development investment in the period 2001-2005, of which VND 220 thousand billion (US$ 15.7 billion) will come from the domestic private sector and US$ 11 billion from FDI. - Bi-annual household living standard survey. - The Government calls on donors to link medium term (3 to 5 years) support strategies with the CPRGS. - Poverty reduction targets (2000 to 2010): - Reduce the incidence of poverty by two fifths according to international standards and by three fifths according to national standards. - Reduce the international standard-based food poverty incidence (2,100 Kcal per capita daily) by three fourths. - Provide basic infrastructure to 80% of poor communes by 2005 and 100% by 2010. - Expand the national transmission grid to 900 poor commune centers by 2005. - Ensure that 80% of urban and 60% of rural population will have access to clean and safe water by 2005; 85% of rural population to have access to clean and safe water by 2010. - Reporting frequencies cited in Appendix 1 include: Annual; Quarterly; Annual and every two years (household living standard survey); Bi-annual. *Source: _cr0425 - 3. Implementation mechanism* ### 3. Job creation ### 3. Job creation ### Objectives and targets - Provide jobs to 1.4 - 1.5 million people per annum. - Raise the share of female workers to 50% of total new jobholders by 2010. - Increase the share of trained workers in the total workforce to 30% in 2005 and 40% in 2010. - Increase the ratio of rural working time utilization of people of working age to about 80% by 2005 and 85% by 2010. - Reduce the share of urban unemployed among the total number of people of working age to about 5% in 2004 and to less than 5% by 2010. ### Monitoring indicators - Number of jobs created annually. - Number of new jobs created annually. - Ratio of female workers in total newly created jobs. - Number of jobs in non-state sector. - Number of new jobs in non-state sector. - Percent of landless poor households that have found jobs. - Percent of poor households with access to credit and loans for job creation. - Number of workers by sectors (agriculture, industry and services). - Percent of trained workers in total labour force. - Total workers trained annually. - Coefficient of rural working time. - Rate of urban unemployment. ### Reporting frequency and agencies - Reporting frequency: Annual (employment and statistical surveys). - Reporting agencies: GSO, MOLISA and provinces. *Source: _cr0425 - 3. Job creation* ### 1. Fiscal policy and public ### 1. Fiscal policy and public expenditure management: ### Fiscal policy and public expenditure management - Implement appropriate fiscal policies to safeguard medium-term sustainability. - Strengthen tax system, increase tax base along the lines of developing the sources of tax revenue and increasing the efficiency of the tax payment system but still remain pro-poor tax policies and system. - Amend some articles of the Revised State Budget Law (2002). - Gradually implement the recommendations that are agreed upon in the Public Expenditure Review. - Increase expenditures for basic social services and rural infrastructure and bias public expenditure in favor of poor provinces. - Increase budget transparency to improve the information base for decision-making and target setting. - Improve budgetary revenue and the expenditure monitoring system at all levels. - Continue to make public information on annual budgetary revenues and expenditures at various levels in a more scientific and proper manner. ### Monetary policy - Implement prudent monetary policy to control inflation. - Introduce monetary and credit controls with an aim to improving the effectiveness of monitoring monetary policy and meeting the targeted objectives. - Continue to implement a basic interest rate policy with an aim to move towards liberalizing interest rates. ### Banking sector and financial organizations (mobilize domestic capital resources) - Reform banking sector and financial organizations to mobilize domestic capital resources. - Develop and implement the plans for restructuring four state-owned commercial banks (SOCBs) in accordance with the overall framework for banking sector reform (2002-2004). - Complete the international accounting standard (IAS)-based financial audits for four large SOCBs by independent auditing companies (2003); resolve all inadequate issues of auditing (2004). - Separate preferential and policy-based credit activities from the State-owned commercial banks, and let them operate in a competitive environment. - Address audit qualifications laid out in the IAS Audit Report on 2000 accounts (2003). - Resolve non-performing loans of state-owned commercial banks to 20% of total debts (2002) and another 30% of non-performing loans (2003). - Complete the separation of the Bank for the Poor from the Bank for Agriculture and Rural Development of Vietnam and let it act as a policy-based bank. (2003). - Increase Bank for the Poor’s lending to disadvantaged areas. - Restructure and reinforce joint stock banks, close or merge weak banks and ensure that they are in compliance with prudential regulations. Reduce the number of total joint stock banks to 28 (2003). - Implement Decision No. 1627 to reclassify all non-performing loans in the four SOCBs and to phase–in provisioning within 3 years (2003-2005) to bring loan loss provisions in line with international standards and to allow for financial status assessment of SOCBs. - Promulgate a decree guiding the implementation of the revised Land Law to create favourable conditions for transfer, leasing, and mortgage to borrow loans from banks and to make contribution to joint ventures. - Provide concrete guidelines on regulations to allow foreign banks operating in Vietnam to accept land use rights as collateral. - State-owned commercial banks should raise gradually the share of credit to private small and medium enterprises and enterprises operating in rural and disadvantage areas. - Allow Postal Savings and the People Credit Funds to receive deposits and expand their operating scope in order to lend for production development. ### Foreign exchange policies - Foreign exchange policies to increase competitiveness, liberalize the current account. - Increase flexibility and transparency of the foreign exchange regime. - Develop inter-bank foreign exchange market. - Build a system and measures to control the foreign capital rotation, especially short-term capital. Control and limit using foreign currencies within Vietnam territory. - Reduce gradually the ratio of foreign exchange surrender. ### External debt policies - External debt policies to keep debt service burden at a serviceable level. - Monitor all debts including debts incurred by government, SOEs, and those guaranteed by Government, debts of joint venture companies (including FDI loans) and private sector debts. ### Trade policy (open trade, promote exports, international integration, strengthen competitiveness) - Promote vigorously economic integration; strictly implement commitments in the process of integration. - Make active preparations to take part in committed bilateral and multi-lateral co-operation mechanisms. - Carry out the bilateral trade agreement with the United States, paving the way for accession to the World Trade Organization (WTO). - Implement trade polices for rural, mountainous and island areas; review the performance of the Law of Trade (2002-2003). - Increase the access to markets of the poor, particularly from rural, remote and isolated areas. - Continue to remove quota restriction barriers imposed on restricted import goods, excluding the barriers on petroleum, lubricant, diesel and sugar.... - Strictly implement Decision No. 46/QD-TTg on the export-import mechanism in the period 2001-2005. - Put all import goods that are currently in the Temporary Exemption List (TEL) into the Inclusion List (IL) with reduction of minimum rate import tax to 20% in order to implement CEPT/AFTA agreements (2003). - Continue to remove quantitative restrictions imposed on rice exporting enterprises and on fertilizer imports. - Increase gradually activities to organize quota auctions for garment exports to create favourable conditions for exporters (including those from private sector) to access the market. Expand the rate of quota auctions for garment exports to 35% and apply measures to improve auction procedures (2003). - Promulgate the Law of Competition (2003); promulgate the State Law on National Treatment and Most Favoured Nation Status (2003); promulgate the State Law on self-defense measure in international trade business (2002-2003). - Implement the Customs Law (2002) to simplify and rationalize customs procedures (2002-2005). - Operate effectively the Export Support Fund, the Export Credit Guarantee Fund (2002-2005). - Publish all trade laws, decrees, decisions, and rules of procedures in official gazettes. ### Protect the poor from negative impact of trade liberalization - Undertake research to examine the impact of trade policy reforms on the poor. ### Public administration reform; promote grass roots democracy and legal support for the poor - Accelerate the reform of public administration, providing the poor with knowledge of the Law and their legal rights and obligations. - Implement Decree No. 136/2001/QD-TTg issued by the Prime Minister on accelerating public administration reform in four areas: administrative institutions, management bodies, personnel strengthening and public expenditure. - Prioritize administration reform in key agencies that directly relate to the poor, such as MARD, MOH, MOTE, etc. to ensure the access of the poor to basic services of health, education, infrastructure, etc. in provinces, especially mountainous and urban poor areas. - Ensure that all citizens have access to information about the law and their legal rights and obligations, and that the poor have better access to the justice system. - Improve targeting for the poor and the allocation of resources to pro-poor programs. - Implement the action plans embedded in the Legal Needs Assessment. ### Development of large-scale infrastructure services for growth and poverty reduction - To better the work of planning and planning management in large-scale infrastructure development; guarantee a suitable construction timetable, a long-term effectiveness and balanced to available economic resources. - Large-scale infrastructure should be developed in a way that the spill-over and spreading effects of the dynamic economic areas, thus creating opportunities for inter-region cooperation. - Diversify investment resource for large scale infrastructure. - To integrate sectorial plans for development of infrastructure into master plan and land-use plan; closely combine large-scale infrastructure and small and medium-scale infrastructure into an integrated network. - To reform the work of planning towards regional planning so that socio-economic development planning includes country-wide and inter-region dimensions. - To publicise and make transparent the master plan and strategies for socio-economic development of the whole country, based on which planning for each sector or industry is carried out. - To extend the spill-over and spreading effects of dynamic economic areas in line with Vietnam’s current trend of development. - To intensify links between growth centres and adjoining areas in order to guarantee a balanced growth among different areas. - To build new policies and mechanism to mobilize to the maximum resources for development. - To carry out policies and mechanism encouraging private sector’ investment in large-scale infrastructure development. - To attract outside resources for infrastructure investment. - To ensure a fair and effective distribution of resources appropriate for infrastructure investment requirements. - To pay due attention to environmental and resettlement problems that arise from large-scale infrastructure projects. - Reform management mechanism for infrastructure service projects in line with current management trend. - Enhance the work of maintenance for large-scale infrastructure projects. - Realize cost-reduction solutions for infrastructure services, increase accessibility of the poor to infrastructure services. - To observe environmental standards imposed by the State environment authorities; efficiently use natural and human resources with a view to sustainable development. - To carry out surveys of public opinions on environmental and social impacts of infrastructure projects. - To facilitate the State environment protection authorities in examining, supervising the implementation of environment commitments set out in the project’s Environmental Impacts Evaluation Report. - To reform the management mechanism for principal construction investment, enhance management devolution for projects. - To harmonize relations with partners. - To increase State budget funding for maintenance work as a separate cost item. - To build a mechanism for mobilizing non-budget funding for maintenance cost. Maintenance cost is allocated as separate from project spending. - To fully account fee incomes from public work investment. - To extend private sector investments and promote society investment in education, health and social activities; encourage local and foreign investors to invest in BOT for public work projects. - Devolution of management for public works, using unpaid labour in the maintenance work. - To have appropriate fee policy to large-scale infrastructure services in poor localities so that the local community can use the services. - To have solutions to raise the efficiency of building and operating infrastructure services; enhance management capacity and apply advanced technology with a view to reducing costs and raising competitiveness for infrastructure services; apply solutions for prevention of waste and downgrading of infrastructure services. ### Policies and measures to develop major sectors and areas to ensure sustainable growth and create opportunities for the poor I. Policies and measures to develop sectors and areas and create opportunities for the poor. 1. Develop agriculture and the rural economy to reduce widely poverty - Continue to implement the Government's Resolution No. 09 and No. 05 on directions and policies to shift the economic structure and product sale. - Implement Resolution No. 13 to continue reform and improve the efficiency of Cooperatives; Resolution No. 14 to continue reform of mechanisms and policies to encourage the private sector. - Provide concrete guidelines to protect land use rights in accordance with the Revised Land Law. Advance the task of planning land use and link it to land transfers. Complete land classification and accelerate the process of issuing land use right certificates to farmers, including those living in mountainous communes. - Develop rural industrial zones at the district and commune level. Implement Decree No. 90 on support policies for developing small and medium enterprises. - Diversify professions and encourage developing off-farm professions in rural areas. Implement Decision No. 132 issued by the Prime Minister on developing rural professions. - Promote measures to help poor households that need cultivation land to be given enough land for production, to stabilize their livelihood, reduce poverty and gradually become richer. Allocate un-used and under-utilized land to poor farmers. - Encourage all economic sectors to invest in the agricultural sector; develop household-scale economies; disseminate economic models for farming in order to promote agricultural diversity and development. - Complete rural financial policies, expand access to financial and credit resources in rural areas. Increase the role of the People’s Credit Fund and micro fiscal programs in rural areas. - Develop regulations and standards regarding the safety and quality of agricultural products, and work jointly with farmers and traders to apply a monitoring mechanism for quality assurance. - Continue to liberalize input markets (fertilizer, insecticide, etc.) and output markets (rice, coffee, etc.). - Create an environment that enables farmers to become more market oriented by establishing a system for rapid access to market prices and price forecasts. Facilitate the development of closer links between farmers, traders, processors and exporters. - Policies to develop and manage fishery resources. Implement Decision No. 132 issued by the Prime Minister on the fiscal mechanism for rural road development programs, fishery infrastructure and rural professional infrastructure. - Research and issue policies on supporting production and consumption of important agricultural, forestry and fishery products that have high economic value, are competitive, have a large consumer market, both export and import substitutions, using technical, economic and market analysis to assess Vietnam’s comparative advantage for producing these commodities. - Raise annual investment in agricultural research with a fair share going to research for upland farming. Increase spending on extension to put in place a highly qualified extension service that is responsive to the needs of farmers, especially in ethnic minority areas. Encourage co-payments by farmers for extension services for industrial crops. 2. Develop industry and urban areas to create more jobs and to improve the living standard for the poor - Develop agricultural industries (chemicals, fertilizer, packaging, etc.). - Develop industries to process agricultural, forestry and fishery products, and microbiological industry. - Implement Decree No. 90 on encouraging the development of small and medium scale enterprises in specific traditional sectors and professions with modern technology. - Develop the legal framework to permit establishing business associations. - Develop an enabling policy environment for the operation of Business Development Service (BDS) providers, regardless of their ownership structure. [BDS refers to training, consultancy, technical services, accounting and auditing services, market information services, computer services, internet and telephone, advertising, etc).] - Provide guidance and implement regulations on preferential policies to encourage industries to relocate to rural areas. - Establish a strategy for urban development; promote urban-rural linkages that include suburban development along the lines of masterplans. - Integrate the development of urban infrastructure with job creation to reduce urban unemployment. - Promote the efficiency of employment promotion and vocational training centers; accelerate the export of workers and experts. - Carry out the reform of public administration procedures to reflect the actual situation of the urban poor in such areas as land and housing management, business and construction certificate issuance, residency registration, etc. - Develop criteria, process and norms in urban planning and design to ensure that sanitation and environmental requirements are met and that also take into account the requirements of the urban poor and their ability to pay. - Develop housing development policies for the urban poor; upgrade current residential neighborhoods squares taking into account the economic condition of the urban poor and also ensuring their employment. - Create access to basic social services for all urban people, including unregistered migrants. Develop measures to help poor people find appropriate jobs in urban areas. - Review labour migration policy and household registration policy to make it easy for people to move to better-paying jobs. - Develop decrees on the demand side of energy management and energy efficiency. 3. Develop infrastructure and create opportunities for the poor to access public services - Implement policies to ensure the provision of basic infrastructure, especially water supply and hygienic conditions for all poor areas, poor communes and poor quarters in cities and towns (Program No. 135. No. 143). - Continue the mechanism of the "State and people will do it together" to develop infrastructure in rural areas. The Government will provide support to train and coach staff responsible for effective management, operation, and maintenance of basic infrastructure construction. Formulate regulations on basic infrastructure construction at the commune level. - Promote the use of local labor in carrying out infrastructure projects. - Strengthen the participation of local people in planning, implementation and maintenance of local infrastructure projects. *Source: _cr0425 - 1. Fiscal policy and public* ### 4. Training and Education: ### 4. Training and Education: ### Training and basic education — goals and measures - Consolidate and develop gains from primary education universalization and eradication of illiteracy with the goal of achieving universalization of the net enrollment rate of primary education and gender equality, paying special attention to disadvantaged areas and communities. - Increase the net enrolment rate in lower secondary education with the aim of achieving universal lower secondary education by 2010. - Move towards completion of junior secondary education universalization and illiteracy eradication. - Raise the budget expenditure for education and training from 15% of total budget expenditure to 18% in 2005, moving in the direction of increasing expenditure for basic education. - Continue policies on package exemption of school fees for poor children; extend preferential loans to poor students to cover training fees. - Raise the awareness of parents in remote, isolated and ethnic minority communities about the value of education through information, education and communication. - Provide improved school infrastructure and facilities for basic education in difficult areas to replace “leaf” schools and start the move towards full-day schooling for such communities. - Expand the lending of textbooks and books for children to schoolchildren from ethnic minorities. - Encourage the participation of the private sector in education and training, especially vocational. - Adjust the rate of training levels; focus on training for a skilled workforce. - Develop special policies for teachers and training staff working in disadvantaged areas: complete the salary and allowance regime, training priorities and other preferential regimes; strengthen, train and stabilize the livelihood of teachers and training staff working in disadvantaged areas and train them on new teaching programs, methodologies and information to improve teaching. - Promote training according to location; apply the appointed selection enrolment for disadvantaged areas. - Implement priority regimes regarding land use and preferential loans for investment in education infrastructure. - Improve curriculum and teaching in tertiary education by linking scientific research and technology transfer in universities and colleges with research institutes. ### Higher education, research and private participation - Improve curriculum and teaching in tertiary education by linking scientific research and technology transfer in universities and colleges with research institutes. - Encourage private sector participation in vocational education and training; focus on producing a skilled workforce. ### Equity, access and targeted supports - Continue package exemptions of school fees for poor children and extend preferential loans to poor students to cover training fees. - Expand textbook lending to ethnic minority children. - Pay special attention to disadvantaged areas and communities in outreach, infrastructure and teacher support. ### Institutional and financing measures (education) - Raise budget expenditure for education and training from 15% of total budget expenditure to 18% in 2005, with increased emphasis on basic education. - Implement priority regimes for land use and preferential loans to support education infrastructure investments. --- ### Health — objectives and policy measures - Improve quality of health services; increase the equity and efficiency of the health care system; concentrate on developing basic health care and community health care. - Implement Instruction No. 06 issued by the Party's Central Secretariat on strengthening and completing the grassroots-based health care network; continue support policies on primary health care tasks for people, especially for poor people and poor areas. - Continue investments to develop health stations and ambulatory health groups in mountainous, remote and isolated areas. - Maintain achievements in abolishing infant poliomyelitis and tetanus. - Continue to implement extended vaccination in 10 kinds of vaccine for children. - Have appropriate policies to provide financial support to health services for poor people. - Encourage the development of traditional medicine in light of Instruction No. 25 issued by the Prime Minister. - Implement Government Resolution No. 90 on the socialization of health, education and culture. - Continue investment and complete policies for the National Action Plan on HIV/AIDS control and prevention; mobilize the masses to control and prevent HIV/AIDS and to manage care of those infected. - Have appropriate preferential mechanisms and policies for medical personnel working in disadvantaged, remote and isolated areas. - Strengthen information dissemination, education and propagation of hygienic practices, disease prevention and health improvement for poor people and poor areas. - Gradually increase the share of recurrent budget expenditure for health to 5% of total budget expenditure in 2005 and to 8% in 2010. - Implement appropriate policies to channel financial resources to support health care for the poor. - Implement the National Strategy on Maternal Health Care for the period of 2001-2010. - Promote the regime of health insurance and free-of-charge health examination and treatment for the poor; continue to expand the scope and level of support for medical examination, treatment and medicines for poor people and disadvantaged children. - Increase population coverage of health insurance by mobilizing premium collections among those who can afford to pay. - Implement Decision No. 147 issued by the Prime Minister on the implementation of the National Population Strategy of Vietnam for the period 2001-2010, strengthening information dissemination on family planning. --- ### Culture and information - Develop a modern culture closely linked to national identity and improve information provision to help people expand their capacity to make choices. - Promote investment to develop culture and information. - Concentrate investment on the development of commune cultural centers, extendable to meeting houses and recreation areas. - Government to provide primary material support to build essential infrastructure such as cultural houses, post offices, radio and television stations, libraries of technological and scientific books. --- ### Environmental protection and natural resources - Continue implementation of Decision No. 104 issued by the Prime Minister on the National Strategy for Rural Hygiene and Clean Water to the year 2010. - Approve and implement the National Strategy for Environmental Protection (NSEP) 2001-2010. - Strengthen capacity in government agencies at central and local levels for environmental assessments; improve environmental monitoring and disclosure of environmental data. - Limit and roll back environmental degradation in industrial zones and densely populated urban and rural areas. - Strengthen education, mobilization and control of environmental hygiene with respect to animal breeding at household and large-scale levels, and in craft villages. - Supplement, complete and develop new legal normative documents to guide implementation of the Water Resource Law, Environmental Protection Law and other legal documents; expand regulatory instruments and incentives for pollution reduction. - Build wastewater and rubbish treatment stations, dust and noise treatment facilities in cities and townships; develop auto-disintegrative latrines in rural areas. - Improve quality of natural resource management for the poor who mainly depend on natural resources for their livelihood; develop frameworks to enable community participation in natural resources management. - Encourage use of biogas in rural areas and develop solar, wind energy and other energy resources. - Develop classification of forestry and reform forest data collection; strengthen sustainability of natural resource use in rural areas. - Implement transfer of land and forests to farmers in association with fixed-cultivation and fixed-residence to stabilize livelihoods of mountainous farmers. - Research, revise and amend policies on standard price norms in caring for protected forests, afforestation and protective forest protection. - Evaluate current forest classification system and improve monitoring of forest covering level. - Integrate the National Program on 5 million hectare afforestation with the Forestry Assistance and Co-operation Program. - Implement the Water Resource Law to improve sustainable management of water resources, river headed forests and land resources. - Develop fishery production prudently, ensuring environmental assessment and proper area selection. --- ### Balanced development, gender equity and inclusion - Continue increasing investment in less developed areas to reduce the development gap between different areas, especially urban and rural areas. - Ensure appropriate population distribution across areas; increase step-by-step the quality of life for all population strata with the aim of reducing the gap in living standards between different strata and groups; bring population variables into development plans. - Implement Decision No. 19 issued by the Prime Minister on the National Strategy for the Advancement of Women to the year 2010. - Ensure that the names of both husband and wife appear on land-use rights certificates by 2005. - Increase the number of women in government-elected bodies. - Reduce inequality in family decision-making and increase the role of women with respect to their family's assets. - Strengthen women’s access to credit resources and capital from the National Strategy for Poverty Reduction to facilitate equitable access to social services. - Have policies to reduce the vulnerability of women against family violence. - Ensure ethnic minorities in mountainous areas benefit from growth; evaluate and disseminate models to support disadvantaged areas and ethnic minorities and encourage their participation in economic development. - Encourage NGOs and socio-political organizations to participate in poverty reduction by providing a legal framework for NGOs. - Improve the access of the poor to legal support services and help the poor improve knowledge of legal rights and obligations. - Increase two-way information systems between local government and poor families. - Implement fully the Decree on Democracy at the Grassroots Level and create an enabling environment for poor households to participate in local economic development plans. --- ### Social safety net and vulnerability reduction - Reduce negative impacts on the poor caused by ongoing reforms; broadly disseminate information on policy changes to facilitate farmers in changing production and business operations. - Ensure job security, extend unemployment insurance, provide training for redundant workforce and improve working conditions. - Develop solutions for emergency social relief for poor and vulnerable people affected by natural disasters and accidents. - Expand the official social safety net (health insurance, social insurance, etc.) and encourage development of voluntary safety nets (school insurance and insurance of crops, diseases, etc.). - Review and strengthen the role of labor unions in protecting worker rights and working conditions. - Improve targeting mechanisms of programs 133, 135, and 143 and implement them in a more participatory way. - Undertake independent evaluations of these programs and use findings to improve project design. --- ### Monitoring and evaluation — statistics and poverty monitoring - Promulgate the Law of Statistics. - Strengthen statistical agencies at various levels. - Promote transparency and data quality; strengthen the statistical database. - Strengthen the national account within 2 years and improve budget data quality to correspond to the Government's fiscal statistical standards. - Present a website of Vietnam in the International Fiscal Statistical Book published by the IMF. - Collect high quality data on the poverty situation and trends, and ensure that data and information is publicized and used regularly. - Implement enterprise surveys to collect high quality data on growth and employment trends, and make it publicly available. *Source: _cr0425 - 4. Training and Education:* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2004/_cr0425.pdf_