Japan

1
Japans ODA Strategy in Vietnam

• Daisuke Matsunaga
• Minister
• Embassy of Japan in Vietnam

2
Table of Contents

• Background
• Three Priority Areas
• Growth Promotion
• Improvement in living / social conditions
• Institutional improvement
• Japans ODA commitments

3
Background(1)

• Global / Regional Integration Competition
• Although having achieved high growth rates,
  Vietnam faces difficult challenges both at home
  and abroad.
• Vietnam is being integrated into global and
  regional economies, with its full AFTA
  integration and WTO accession.

4
Background(2)

• Domestic Challenges
• Despite considerable improvements in social
  indicators brought about by the high growth in
  recent years, its absolute income level is still
  low. (lt600, IMF 2004)
• Social issues cannot be solved through economic
  growth alone, but in some cases may even
  deteriorate
• - Urban-rural disparities,
• - Poverty among ethnic minorities,
• - Environmental degradation,
• - Lack of urban infrastructure,
• - Problems in the transportation sector,
  etc.

5
Background(3)

• Two important agendas
• Economic Growth and Poverty Reduction
• Economic growth is a necessary condition for
  sustainable poverty reduction.
• However, it is not a sufficient condition,
  because
• Quality of growth (how the fruit of growth
  is distributed) is important.
• Existence of issues which growth does not
  resolve
• e.g. environmental gradation, urban
  congestion.
• On the other hand, improvement in social / living
  conditions provides basic conditions for
  subsequent growth.

6
Japans Three Priority Areas

• Economic growth promotion
• (leads to improved economic and social
  circumstances)
• Improvement in living and social conditions
• (addressing directly the question of poverty
  reduction)
• Institutional development
• (problems associated with a transitional
  economy / society, fundamental to both growth
  promotion and living / social conditions
  improvement)

7
Three Priority Areas Basic standpoints

• Support for development priorities of the
  Vietnamese government
• Japans three priority areas correspond to the
  development priorities of the Vietnamese
  government embodied in such development plans as
  CPRGS and SEDP.
• Japan, respecting national ownership, supports
  the development priorities of the Vietnamese
  government.

8
Priority Areas (1) Growth Promotion

• Significance of economic growth
• Engine for growth (private sector,
  incl. FDI), appropriate institutions and
  policies, and a foundation for economic
  activities (economic infrastructure and human
  resources) are important.
• Main areas
• Improvement in investment climate
• SMEs and private sector development
• Development of economic infrastructure
  (transport, power and information and
  telecommunications)
• Various economic reforms, including SOE and
  banking sector reforms
• Human resources development to support growth

9
Priority Areas (2) Improvement of living /
social conditions

• Main areas
• Education
• Health care
• Rural development
• Urban drainage, waste water treatment
• Environment

10
Priority Areas (3) Institution improvement

• Significance of institutional improvements
• Serves as a basis for both economic and social
  activities.
• Following cross-sectoral issues are targeted,
  together with individual sectors indicated in
  (1) and (2) above.
• Main areas
• Legal framework development
• Administrative reforms
• (incl. civil service reform and fiscal
  reform)

11
Japans ODA Commitment (at CG meeting on
December 7, 2005)

• Total amount of assistance to Vietnam 100.9
  billion yen (9 )
• ODA Loans 90.8 billion yen (10.7)
• Japan will extend its assistance to basic
  infrastructure development of electricity and
  transportation, urban water environment
  improvement, human resource development, economic
  and social infrastructure development in
  provincial and rural areas.
• Grants 10.1 billion yen
• As for grant aid, Japan will provide a total of
  about 4.4 billion yen in such areas as health,
  medicine, rural development, and human resource
  development.
• Grass-roots assistance and human security
  assistance in such spheres as basic education and
  vocational training in rural areas.
• As for technical cooperation, Japan will accept
  377 trainees and invite 109 youths from Vietnam
  to Japan. In addition, Japan is implementing a
  total of 22 technical cooperation projects,
  including human resource development.