For poverty reduction to take root in any country, people need the opportunities those in rich countries take for granted, in particular the chance to work and provide for a family. To boost private sector growth and job creation, many developing countries are striving to improve their economic and financial management, their legal systems, and essential infrastructure such as roads, water, and power.

Often, however, these countries lack the technical knowledge or experience to design strategies to pull together all the many elements that go toward making a robust economy. Through a combination of specialized staff and a wealth of accumulated knowledge and experience, the World Bank works to help governments prepare medium-term strategies to boost economic growth, in consultation with representatives of civil society, trade unions, and community groups.

In Vietnam, the Bank has been a partner providing guidance on the country's transition from a centrally-planned to an open economy since 1987, when the government invited the Bank to begin a dialogue on economic policy. In 1993, the government and the World Bank agreed on an initial program of country support to provide financial and technical assistance over a three-year period.

The donor community has since worked to help the Vietnamese government build the infrastructure essential for a thriving economy. Early Bank lending financed power and transport projects, and it evolved over time to include assistance for the rural sector, which has been the mainstay of the local economy. Projects aimed to provide more rural families and businesses with electricity, better roads, education, health care, and advice on agricultural issues.

The Bank and other international and bilateral aid agencies also advised the government on environmental policies and ways to consult more widely with communities across the country on development priorities. The International Finance Corporation, an arm of the World Bank that focuses on private sector development, provided technical assistance, training, microcredit, and equity capital to banks and small- and medium-sized businesses.

Vietnam evolved from an importer of rice to the world's third-largest rice exporter. Between 1990 and 1997, export earnings grew by 25 percent a year, and by the end of the 1990s, exports accounted for half the country's national income.

As its agricultural sector grew, economic growth in Vietnam picked up. Growth averaged about 8 percent per year between 1990 and 1997. During this time, foreign investment—largely from within East Asia—peaked at 10 percent of Vietnam's gross domestic product. Vietnam's growth rate slowed during the 1997/98 Asian financial crisis but by 2002 was back to around 7 percent per year.

This growth has brought change for many Vietnamese. In the 1980s, it was estimaed that 70 percent of households were living in poverty. By 2002, the figure had dropped to 29 percent. The fall in poverty was accompanied by a parallel improvement in social indicators, such as decreased mortality rates for children under five.

The Vietnamese government is continuing to work with its development partners on long-term plans to build on these gains. In 2001, the authorities outlined a ten-year strategy to further open the country to investment and trade, and to pursue reforms to modernize systems of government and business regulation.

The plan forms the basis for Vietnam's Poverty Reduction Strategy, which includes customized targets and plans to achieve the Millennium Development Goals. The Bank has provided $350 million to help Vietnam achieve the goals laid out in its strategy and plans to provide continued direct support to Vietnam's poverty reduction priorities.

Despite significant gains in the effort to reduce poverty, Vietnam needs to accelerate reforms in the areas of governance, state-owned companies, and banking. Advances that stemmed from one-time events, such as land reform, need to be supported by longer-term efforts to prevent a rise in inequality and to ensure continued poverty reduction and economic growth.

Looking forward, Vietnam needs to prepare for accession to the World Trade Organization and to spur job creation for the 1.5 million Vietnamese who enter the labor market every year.

Donors can further help Vietnam by working more closely together. The European Union is leading a group of donors working towards better aid coordination. Joining them in this effort are the World Bank, the Asian Development Bank, and the French, German and Japanese bilateral agencies.