The Ireland Aid Review of 2002 recommended expansion into South East Asia to develop new country programmes "Which would combine a clear poverty focus on poverty reduction and basic needs with support for the growth of the private sector".

Vietnam was identified as a suitable base for a regional programme in South East Asia and an Embassy was established in Hanoi in 2005 with responsibility for the development of a South East Asia programme covering Vietnam, Laos and Cambodia. A phased approach was followed with an initial focus on establishing a programme in Vietnam and a total of €7.5 million was spent in 2005 and 2006 on development cooperation programmes. A Country Strategy Paper (CSP) setting out Irish Aid’s long-term development strategy for Vietnam covering 2007-2010 was approved in July 2007. It is aligned with Vietnam’s 5-year Socio-Economic Development Plan (2007-2010), around which donors have agreed to harmonise all development cooperation. The total budget for the CSP (2007-2010) is €87.53m with €22.6m allocated in 2008.

Vietnam has undergone rapid economic growth and social change following the progressive introduction of a market economy and the facilitation of private sector growth and investment. Economic growth has averaged 8% in recent years while poverty has declined from 58% of the population in 1993 to under 20% at present. There has been a continued improvement in key human development indicators such as education, health and life expectancy and Vietnam is on track to achieve the Millennium Development Goals (MDGs). However, it faces significant challenges in ensuring that the benefits of growth are equitably distributed and in preventing significant growth in inequality.

In view of Vietnam’s rapid economic growth it is expected that, over time, the balance of Irish Aid’s programme in the region will shift towards Vietnam’s less developed neighbours, Cambodia and Laos.

Programme Objectives

The overall focus of the Irish Aid programme is on promoting poverty reduction and reducing inequality.  It will provide support for the delivery of basic services and social protection to the poorest and most vulnerable sections of society; for promoting inclusive economic development and the growth of the private sector; and for promoting equality and increased state accountability to citizens.  The objective is to assist Vietnam meet the Millennium Development Goals by 2015. The main elements of the Irish Aid programme are as follows.

Macroeconomic Support

The main modality for supporting poverty reduction is the Poverty Reduction Support Credit (PRSC), a World Bank managed budget support mechanism. The PRSC is based on the four pillars of Vietnam’s Poverty Reduction Programme: promotion of growth and transition to a market economy; reducing poverty and ensuring social inclusion; sustainable development; and building modern governance. It involves support for the key aspects of the Government programme through co-funding of the pro-poor elements of the national development plan. It is supported by most of the leading donors and is the main mechanism for donor cooperation and harmonisation.

Programme for Ethnic Minorities (P135)

Poverty is most pronounced among the ethnic minorities who live in isolated highland regions. Poverty reduction in those areas is increasingly lagging behind that of other regions and it presents a considerable challenge for Vietnam’s government. Irish Aid supports a national poverty reduction programme targeting the poorest communes in ethnic minority areas - the Programme for Socio-economic Development in communes faced with extreme difficulties, or Programme 135.  The first stage of the programme, P135-1, supported basic rural infrastructure to connect isolated groups with main roads, markets and social services.  The current stage, P135-2 (2006-2010), seeks to promote economic development through improved local production of food and cash crops. Donor support aims to facilitate the expansion of the largely government funded P135 programme and improve transparency and participation.

Private Sector

The Irish Aid programme combines a clear focus on poverty reduction with support for the growth of the private sector, which is the main driver of economic growth. Irish Aid supports the Mekong Private Development Facility (MPDF), a multi-donor funded regional programme promoting the development of small and medium sized enterprises (SMEs) in Vietnam, Laos and Cambodia. Its goal is poverty reduction through economic development and employment generation. SMEs make up 90% of the private sector in the region and present considerable potential for job creation, for improving incomes and reducing poverty.  During 2008, MPDF will seek to build links with Ireland including proposed exchange visits in the areas of tourism and business development.

Health

Irish Aid co-funds with Atlantic Philanthropies, a leading private philantropy, the Ireland-Vietnam Blood-Borne Virus Initiative (IVVI), which is bringing Irish expertise to bear on blood-borne viral disease prevention and control in Vietnam. It involves a partnership between the National Virus Reference Laboratory (NVRL) in UCD, the main diagnostic laboratory for viral diseases in Ireland, and the National Institute of Hygiene and Epidemiology (NIHE) in Hanoi, which has a strategic role in national disease surveillance and control. The capacity building provided by the programme should enhance public health efforts in Vietnam to reduce the spread of blood borne viruses, including HIV and AIDS and Hepatitis, which are most prevalent among the poorest and most marginalised sections of society.

Civil Society

A Civil Society Fund (CSF) has been established in Hanoi to develop links with civil society and explore opportunities to further the CSP goals and objectives outside of mainstream programmes.  The Government of Vietnam is more open than in the past to the involvement of NGOs in the development process. 

One UN Reform

There are 14 UN agencies currently operating in Vietnam, each with its own programme. In the interests of aid effectiveness, the Government of Vietnam and donors are supporting a “One UN” reform process which involves all UN agencies in Vietnam combining their different programmes into a single “One Plan”, accompanied by One Budget, aligned to meet the needs of Vietnam. A number of donors, including Irish Aid, have agreed to support the process by providing untied funding to the One Plan. Irish Aid’s funding will support UN core programmes in Vietnam while at the same time promoting reform and reducing duplication of mandates and activities.

“Celtic Tiger” Initiative

The Irish Aid Review 2002, in recommending expansion into South East Asia, identified opportunities “where the experience of economic development in Ireland, of great interest to developing countries, could be effectively utilized”. In response to this and to requests from government partners, the CSP identified the intention to develop a “Celtic Tiger” initiative to explore how the lessons of Ireland’s economic and social development could be delivered as part of Irish Aid’s programme in South East Asia.  A consultancy study was commissioned and the study has identified a range of options, which are currently under consideration.

Laos / Cambodia

A common constraint to countrywide development in post conflict countries has been the presence of significant amounts of war munitions in the form of both landmines and Unexploded Ordnance (UXO).  Laos and Cambodia are heavily contaminated by mines and UXOs, which both impede development and exact a heavy toll in terms of disability and mortality.  Irish Aid provides support for the clearance of landmines and UXOs in Laos and Cambodia. In Laos support is divided equally between UXO Lao (national demining body) and the Mine Action Group (MAG), a specialised NGO involved in this area.  Irish Aid funds the clearance of landmines in Cambodia through its support for the specialised demining NGO, Halo Trust. 

Irish Aid Spending in South East Asia, 2007 (€19.48m)
Proposed Irish Aid Spending in Vietnam, 2008 (€22.6m)
Proposed Irish Aid Spending in Laos, 2008 (€1.0m)
Proposed Irish Aid Spending in Cambodia, 2008 (€0.5m)