VOV: The UK government has given Vietnam US$40 million for the poverty reduction support credit programme (PRSC). What are the highlights the programme?
Ms Fiona: The recent approval of £20 million (US$40 million) for PRSC7 is a signal of the UK’s confidence in the Vietnamese Government’s commitment to inclusive growth and handling of recent economic problems. The PRSC fund is to help the Government in its wide reform agenda. From DFID, we are deeply involved in economic integration, education, gender, social protection, public financial management and anti-corruption. There has been a lot of progress in poverty reduction in Vietnam: a 45 percent reduction in poverty between 1993 and 2007, equivalent to 24 million people having been lifted out of poverty. However, these gains are fragile and threatened by the impact of the current economic difficulties. Together with other donors, the total contribution from PRSC is well over US$350 million. This is an important and relatively predictable source of foreign capital inflow for Vietnam. It’s particularly useful to Vietnam when the trade deficit is large and there may be volatility in the movement of global capital.
VOV: Could you tell me a bit more about how PRSC works?
Ms Fiona: Through the PRSC programme, donors talk with the Government about economic management issues such as State-owned enterprise and banking reforms that are important for Vietnam in the medium- and long-term. We also have an ongoing policy dialogue on health care, education and sanitation. These measures aim to help the poor better access basic services and therefore to reduce the gap between rich and poor, who tend to be more affected in difficult times.
VOV: How do you evaluate Vietnam’s progress in poverty reduction so far?
Ms Fiona: Vietnam has done very well on poverty reduction. Your poverty reduction rate is one of the fastest in the world. However, we think future gains will be slower as the poorest and most disadvantaged groups find it harder to engage in the mainstream economy. We believe Vietnam will soon become a middle income country, so it is now the time for the country to develop more systematic and targeted programmes to protect and support the most vulnerable people.
VOV: What do you think about the progress Vietnam has made in governance reform, especially on anti-corruption?
Ms Fiona: Vietnam has made quite a lot of progress in some key issues but certainly challenges remain. A central challenge is to change the culture of the bureaucracy and to tackle the spread of corruption. This needs a better link between planning and budgeting, a more realistic reform of the pay system and incentive systems for social servants and much more efficient institutional efforts towards anti-corruption. In its fight to improve governance, Government needs better data which is rigorously researched and is valid. DFID in partnership with the World Bank is therefore directly supporting Government to strengthen its Governance and Poverty Policy Analysis.
VOV: Why does the UK find it necessary to help Vietnam in this field?
Ms Fiona: Taking as an example, anti-corruption as I said earlier, this is a long-term fight and nowhere in the world is the fight yet won. But the UK has experience and has made some good progress in this area, and that’s why we want to work with Vietnam to assist with its efforts. And we have seen some recent progress in Vietnam, for example the Decree on Asset Declaration beginning to have an impact. We are now seeing the first cases of officials being brought to account for failing to declare assets. However, we need to see more energy in addressing corruption affecting State-owned enterprises and corruption in public investments and, as I said, it’s a long- term process. We’re working closely with the National Assembly to help strengthen their capacity from the national to the provincial level so that they can better oversee the functioning of the executive and represent the interests of the public. But we stand ready in the British government to do more with the government to advance the cause of transparency and accountability in Vietnam.
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