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Nov 03, 2017 / 07:53

Upgrading Vietnam’s urban infrastructure through international efforts

Ngoc Thuy

Thirty years after the launch of the economic reforms known as Doi Moi, Vietnam is considered a development success story, which marked by remarkable poverty reduction and economic growth. Vietnam reached middle-income status in 2009, achieved most Millennium Development Goals (MDGs), many of them ahead of time, and has adopted the Sustainable Development Goals (SDGs).

The economy has developed from being largely closed and centrally planned to dynamic and market-oriented, integrated and connected to the global economy. Furthermore, growth has been inclusive, translating into tangible gains for the Vietnamese people, economically and in broader welfare terms, with significant increases and improvements in access and quality of services. 
 
Ho Chi Minh city, the financial hub of Vietnam.
Ho Chi Minh city, the financial hub of Vietnam.
However, at the same time, Vietnam is highly vulnerable to climate change and natural disasters, and natural assets are exploited unsustainably. Weak institutions, often with overlapping mandates and responsibilities, and inadequate processes for coordination, impede state effectiveness. There are rising fiscal pressure and vulnerabilities in the banking sector, the domestic private sector is developing below potential, and labor productivity growth is diminishing. Needed investments in infrastructure exceed resources available, and the ability to mobilize private sector resources for such investments remains weak. Vietnam’s demographic and economic evolutions are also putting new demands on service delivery and social protection systems.

On September 14, the World Bank has launched the workshop on Country Partnership Framework for period 2017-2020 as the foundation for the cooperation with Vietnam in the coming future.With this framework, World bank will continue supporting Vietnam’s development to achieve higher objectives in the group of middle income countries, in turn contributes to a higher productivity and sustainable environmental development.
 
Vietnam has high demands for capital for infrastructure development.
Vietnam has high demands for capital for infrastructure development.
On the other hand, the Asian Development Bank (ADB) has also announced its country partnership strategy 2016 – 2020 for Vietnam, with an aim to support investments and policy reforms that promote more inclusive and environmentally sustainable economic growth. ADB’s strategic framework will be based on three pillars: promoting job creation and competitiveness; increasing the inclusiveness of infrastructure and service delivery; and improving environmental sustainability and climate change response. Recently, the ADB's Board of Directors has approved 170 million USD in loans to help Viet Nam upgrade urban infrastructure and address climate change, benefiting about 116,000 households in Hue, Vinh Yen, and Ha Giang.
 
According to ADB's expert, the current economic growth of Vietnam is partly thanks to urbanization. However, many cities, even as they continue to be the center of economic activities, lack key urban infrastructure services and remain vulnerable to climate change, particularly flooding. As such, the ADB will continue its cooperation with Provincial People’s Committees of Thua Thien Hue, Vinh Phuc, and Ha Giang, administrative authorities of the capital cities of Hue, Vinh Yen, and Ha Giang to make sure that their provincial capitals are green and climate-resilient, while enhancing their economic competitiveness.

More than 30 million people live in urban centers in Viet Nam, but the impact of urbanization is uneven across the country. Unlike the capital Ha Noi and other highly developed urban centers, secondary cities with populations between 50,000 to 300,000, such as Hue in central Viet Nam and Vinh Yen and Ha Giang in the northern part of the country are lagging behind. For instance, less than 60% of households in secondary cities have access to clean water and only 10% of wastewater is treated properly.

Apart from the loans, ADB will also administer a total of 14.1 million USD in technical assistance with the Ministry of Natural Resources and Environment—and 6 million USD in grant investment from the Global Environment Facility and the Urban Climate Change Resilience Trust Fund. The TA will mainstream a green and resilient city development approach across government agencies through policy advice and capacity building, and replicate the approach in other cities in Viet Nam.

As one of the most open economies in the World, Vietnam is seeking regional and global opportunities for further international integration. Vietnam is a member of the World Trade Organization (WTO), the Association of the Southeast Asian Nations (ASEAN) and the ASEAN Economic Community and has signed sixteen bilateral and multilateral trade agreements. Vietnam has sought participation in new free-trade agreements (FTAs), including the Vietnam-EU FTA, the Regional Comprehensive Economic Partnership (RECEP), and the Trans-Pacific Partnership (TPP).

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