EU disburses EUR13 million for Vietnam’s economic reform

The European Union delegation to Vietnam has disbursed EUR13 million (US$16.5 million) to support the implementation of Vietnam’s Socio Economic Development Plan (SEDP) in the 2006-2010 period.

The Ambassador and Head of the EU Delegation to Vietnam, Sean Doyle, announced the aid package in a press release in Hanoi on July 15.

“The disbursement of EUR 13 million confirms the strong and continued support of the EU to the Vietnamese Government’s reform strategy and poverty-reduction agenda,” said Doyle. “The EU Delegation will continue to work closely with the government on key policy reforms, in addition to providing technical assistance to build capacity of strategic institutions.”

The aid is part of a EUR 44 million grant agreement, signed by the EU and the government of Vietnam in 2009. Under this agreement, funds will be distributed to Vietnam annually over three years through the joint-donor Poverty Reduction Support Credit (PRSC) mechanism, which is the general budget support mechanism used by all donors in Vietnam. The EU has been an active member of the PRSC since 2004 and is the second largest grant donor.

Disbursement of the EUR44 million grant is subject to a satisfactory joint government/donor assessment of progress in policy reform, as well as a firm commitment from the government to improve public financial management and focus on poverty-reducing growth.

This year, the disbursement of EUR13 million tranche takes account of timely and appropriate policy reform in a number of key areas, such as enhancing the financial management of State-Owned Enterprises, formulating an education development strategy and a comprehensive anti-corruption strategy, elaborating a public debt management law, and formulating a national target programme on adaptation to climate change.