Australia, UK finance Vietnam’s global integration

Representatives of Australia and the United Kingdom clinched a deal in Hanoi on Wednesday to provide a combined US$16.5 million for Vietnam to step up its integration into the world’s economy and cash in on its WTO membership.

The finance will go to the second phase of a technical assistance program entitled “Maintaining Sustainable Development and Poverty Reduction Gains through WTO Commitment Implementation,” also known as the Beyond WTO program.

Under the agreement, the Australian aid program AusAID will contribute A$12 million (some US$11 million) and the UK Department for International Development (DFID) will cover GBP3.4 million (around US$5.54 million) for phase two of this program.

The World Bank will provide technical assistance for the program whose second phase focuses on Vietnam’s implementation of commitments to the World Trade Organization (WTO) and in accordance with other international and regional agreements.

The specific aim is to improve competition, State-owned enterprise reform and land management; and help the rural sector adjust to the impact of economic integration through research and analysis of new market opportunities to inform policy making.

The second phase will also center on building the capacity of key Vietnamese institutions responsible for implementing economic reforms and working at provincial level to support the implementation of key economic reforms.

“‘Behind the border’ reforms are critical to ensuring that Vietnam is positioned to take full advantage of the resumption of trade and investment flows as the current downturn recedes,” said the Australian ambassador to Vietnam, Allaster Cox.

Cox said that in addition to infrastructure and human resource development, taking advantage of the global recovery would require an increase in the international competitiveness of Vietnam’s enterprises, sound frameworks for attracting long-term foreign investment and good policies to support business development.

“It is very important that these trade-related reforms are clearly reflected in Vietnam’s next Socio-Economic Development Plan for 2011-2015,” Cox said in a statement obtained by the Daily after the signing ceremony in Hanoi on Wednesday.

Fiona Lappin, head of DFID in Vietnam, commented in the statement that trade was essential for growth, for job creation, thus helping reduce poverty, but resulted in unexpected impact.

“…Not everyone will come out a winner from trade liberalization,” Lappin said. “In fact as trade expands and liberalizes, many jobs will be created, but some will also be lost – perhaps permanently. The poor are often the most affected, and many of them are women.”

Lappin said DFID would work with the Vietnamese Government to protect the poor from any negative externalities associated with trade liberalization and economic integration.

Minister of Trade and Industry Vu Huy Hoang said an action plan had been carried out over the years to make the most of opportunities and overcome the challenges prompted by the country’s WTO accession. He said Vietnam needed support from the international community to make the Government’s action plan a success.

The first phase of the five-year Beyond WTO program kicked off in October 2006, and on Wednesday was the start of the second phase. During the launch, Vietnam and the donors also showed the first Annual Work Plan for Phase II, which comprises 20 projects implemented from October 2009 to December 2010.

VietNamNet/SGT

Tags: Vietnam cooperation