The agreement was reached by donors at an informal mid-year consultative group meeting held in the Central Highland province of Dak Lak on June 7-8. The meeting brought together more than 300 delegates representing foreign embassies, foreign donor organisations and Vietnamese ministries and agencies.

Deputy Prime Minister Pham Gia Khiem noted that like many other countries, Vietnam has been badly affected by the global financial meltdown and economic recession and the country is facing many difficulties.

He said that since early 2009 the Vietnamese government has introduced five major solutions to promote production and business and to ensure social welfare by stimulating investment and consumption, applying flexible financial and monetary policies and enhancing governance. As a result, in the first quarter of this year, Vietnam achieved a GDP growth rate of more than 3 percent while social stability was maintained.

He asked donors to look at the results of poverty reduction projects, pointing to the fact that many households that have benefited from such projects are at a serious risk of relapsing into poverty due to the economic downturn.

He proposed that donors continue to support Vietnam’s development process and allocate part of their funding to improve the welfare of local people in the Central Highlands.

Vietnam’s consistent policy is to pursue the Doi Moi (Renewal) process and international economic integration, said Mr Khiem, adding that the country will fully and strictly meet its commitments to international organisations although some countries have re-applied the protectionist policies.

In her speech, Victoria Kwakwa, World Bank Country Director for Vietnam, highlighted Vietnam’s efforts to weather the global financial storm and maintain its competitiveness. However, she said that Vietnam should strike a balance between economic development and social equality. 

She expressed her interest in the Central Highlands – one of the most disadvantaged regions in the country -- and asked the donors to use part of their aid for development there.

Mitsuo Sakaba, the ambassador of Japan – Vietnam’s biggest aid donor – said that his government will announce its aid projects for Vietnam in the 2009 fiscal year next week following the results of bilateral negotiations in May.

“Japan has experience in combating corruption and we will work closely with you to effectively implement Japanese-funded ODA projects in Vietnam,” said the ambassador.

Donors acknowledged Vietnam’s efforts to cushion itself from the negative impact of the global economic crisis by introducing three stimulus packages and other initiatives to support the poor – the most vulnerable group in society. However, they recommended that the government should take other necessary steps, as more challenges are lying ahead. They said that the government should be more transparent in its initiatives to prevent the crisis while paying more attention to employment and production of the private sector.

During the two-day meeting, donors focused on assessing the country’s macro-economic situation, the social impact of the economic downdraft on government policies, anti-corruption, how to adapt to and mitigate climate change, procedural harmonisation and aid efficiency. 

Since 2003, bilateral and multilateral donors have committed nearly US$50 billion in ODA to Vietnam./.