Charting a prosperous future for Viet Nam

Few countries have endured as chequered a history as Viet Nam. But from the ravages of war, a new nation has emerged – one marked not by conflict but by rapid economic growth and social progress. Replace the vivid imagery of warfare with a far more relevant and contemporary picture of bustling cities and commerce; of throngs of tourists from countries near and far; and of a landscape that enjoys global acclaim for its natural beauty and diversity.

So, what’s the problem?

Unfortunately, while Viet Nam’s story has been one of accelerated progress – per capita income rising from below US$100 to an estimated at US$2,200 in 2015, and a steep reduction in poverty from 58 to 10% between 1993 and 2010 – there remains much work still to do to maximise the impact of development programmes and secure a prosperous future.

Economic growth has been slower in the years since the financial crisis; poverty remains endemic among particular ethnic groups and in more remote areas. Research to support Viet Nam”s 2015 National Human Development Report showed a similar slowdown has occurred in wider developmental progress, including health and education.

For Bakhodir Burkhanov, deputy country director for the UN Development Programme in Viet Nam (UNDP), it remains a country of contrasts – where  socialist values still officially reign supreme, but where market reforms continue to permeate through the economy. “Many see Viet Nam as a development success story and they are right to do so,” he says. “But equally, there is no doubt that the gains of recent years are far from complete.”

Engaging with the Party

The UNDP has operated in Viet Nam for nearly 40 years. Today, it is tasked with helping the government address the myriad challenges that come with its new status as a lower middle-income country. To do so, points out Burkhanov, involves working with the Communist Party, an institution that is guides all branches – legislature, judiciary and executive – and all levels of government.

“Viet Nam has maintained a ‘democratic centralist’ model” he explains. “It is the forum where official politics takes place. Reforms happen through debates and consensus-building among its members, some of whom are more liberal and others more traditional, and at its various levels. At UNDP we’re in the business of promoting development for the people, which involves working with all stakeholders and influencers.”

He goes on to point out that many international development partners in Viet Nam have successfully engaged the Party and its senior cadres in various policy initiatives. In fact, there is a cohort of serving and retired officials who are advising our work in a variety of areas, including civil society development, justice and administrative reform, among other issues.

These advisors were, to varying degrees, involved in the series of political and economic reforms (Doi Moi) launched in 1986, which helped to progressively transform Viet Nam from one of the world’s poorest nations to a middle-income country. These were decisive, but not overnight reforms, and progressively created a “market economy with socialist orientation”. Doi Moi involved the abolition of a centrally-planned system dependent on state subsidies, creating in its place a new market-driven economy meant to facilitate greater competition between public and private sectors.

Today’s generation of policymakers are focusing on Viet Nam”s recent growth and development hiatus. They are seeking urgent solutions to rejuvenating the country”s performance and have responded with further economic liberalization and international integration steps, for example by joining the Trans-Pacific Partnership (TPP) trade agreement.

The UN”s One Plan 2012-2016 is designed to support Viet Nam in this endeavour, responding to its needs as a new middle-income country and addressing the wider socio-economic and environmental challenges. UNDP is helping by focusing on areas such as inclusive and equitable growth; governance and participation; and sustainable development. “Viet Nam is known as a highly rules-based society,” points out Burkhanov. “It is a country that has strong respect for the letter of the law but, as in many other countries, there is a disconnect between what is adopted as a policy or law, and how it gets implemented. This is where an organisation like UNDP can help.”

The road ahead

Burkhanov believes that much of the success of any future reform programme rests on the ability of the country’s leaders to implement the proposed changes. Contrary to what outsiders might suspect, the key leaders are by no means confined to Ha Noi’s corridors of power. “Viet Nam is in fact a decentralised country,” he says. “A lot of authority rests with the provincial level. Provinces have significant leeway in interpreting and adopting policies from the centre, and this has enabled some localities to adopt a more innovative and forward-looking development policies. A lot of this is to do with leadership and the ability of leaders at local level to take certain risks.”

It is also worth reiterating that Viet Nam”s progress over the past decades has been truly remarkable. That tens of millions of Vietnamese have been lifted out of poverty is not in dispute, but the challenge now, according to Burkhanov, is to “move from quantity to quality”, with the creation of a robust service delivery ethos being key.

“Service delivery has historically not been a priority but this is starting to change,” he says. “For example, we have been keen to involve civil society in policy debates and implementation. In the past, they have been viewed with suspicion, but we are helping demonstrate that for certain issues – such as building resilience of communities to disasters – they can act as service delivery partners and the government has become more comfortable with that notion. But the policy space for meaningful engagement of civil society organisations is still rudimentary and we are working to make sure that new laws help enlarge this space.”

Viet Nam is also making strides as a member of the international community. It participates actively in ASEAN and is building relationships with key global and regional players; it has signed a number of free trade agreements and is using its geographic location at the crossroads of major trade routes to influence wider debates in south-east Asia. “International integration is hugely important for Viet Nam,” says Burkhanov. “It is generally agreed to have gained from its trade agreements and there is more to come, particularly as a result of instruments such as the TPP.”

Such economic reforms – together with other measures on gender equality, social protection and environmental sustainability – will help power Viet Nam through the next phase of its development, believes Burkhanov. “Quality, sustainable and inclusive growth – that’s what we are aiming for,” he concludes. “While this is no time for complacency, there is a real excitement in the air. It”s tangible and a real testament to the belief that even better days lie ahead.”

 

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