WELCOME AND GOOD MORNING
As Minister Vinh has just said, today’s meeting marks an important milestone in our development partnership. PM Dung, let me first express our sincere thanks to you and the Government for your willingness to work with development partners to create this new platform for high level dialogue.
We appreciate the considerable effort by the Government to get us to today’s first VDPF event. I would like to recognize the strong leadership of Minister Vinh and counterparts at MPI and the hard work of MOLISA, CEMA, MARD, MOC and MONRE. I thank colleague DPs who have also engaged actively, in particular the Governments of Australia, Germany, Ireland and Japan, and the ADB and the UN who have acted as lead agencies with government counterparts for the technical discussions over the last two months.
We believe the VDPF process will further strengthen our partnership, by deepening our dialogue and by allowing us to find concrete actions that we will work on together to contribute to Vietnam success as a MIC. The success of the VDPF is the collective responsibility of all of us represented here today: Gov, DPs, international and local NGOs. I urge ALL of us to commit to engage actively in a spirit of trust and mutual respect to ensure that the VDPF does indeed achieve the objectives we have set—deeper dialogue, greater action orientation and more inclusiveness.
Prime Minister we particularly look forward to our interaction with you this morning. This is a unique opportunity for us to engage with you on a range of strategic issues. We thank you for your openness to interact with us in this format and sincerely hope that you find it useful and time well spent.
I want to first spend a few minutes to share with all of us some very good news that truly deserves celebration. Yesterday the results of the OECD’s Programme for International Student Assessment (PISA) was released. Vietnam participated for the first time. PISA assesses the extent to which 15-year-old students have acquired key knowledge and skills that are essential for full participation in modern societies. The assessment, which focuses on reading, mathematics, science and problem-solving, does not just ascertain whether students can reproduce what they have learnt; it also examines how well they can extrapolate from what they have learnt and apply that knowledge in unfamiliar settings, both in and outside of school. This approach reflects the fact that modern societies reward individuals not for what they know, but for what they can do with what they know. A nationally representative sample of 15 year old Vietnamese students who participated in the assessment, scored high in all tests including Math, Reading and Science, all above OECD averages. Vietnam ranked 17th of 65 participating countries surpassing the USA, the UK, France, Australia and New Zealand. This augers very well for Vietnam’s long term development. I think it is befitting that we give a big round of applause to all students and teachers across the country, to the MOET and to the Government of Vietnam and other stakeholders in Vietnam’s education sector.
This year marks the midpoint of the SEDP 2011-2016. The Government’s review of progress shows that the fundamental thrust of the SEDP and the SEDS remains highly relevant. Vietnam needs to create a more competitive economy including through sound market institutions, to enable a return to more rapid growth while moving the economy up the production value chain; it needs new development approaches and policies to help tackle remaining poverty, growing vulnerability and widening inequality in order to create an even more inclusive society; and Vietnam’s growth and development needs to be more environmentally sustainable. These are indeed the themes of the VDPF for the remainder of the SEDP period—Competitiveness, Inclusiveness and Sustainability.
As we meet today, the global economy is in better shape than it was at the time of our last meeting but the process of recovery will continue to be slow. Strengthened competitiveness including an improved business environment will be critical for Vietnam to derive maximum benefit from global recovery and from the country’s continuing economic integration through the upcoming ASEAN Economic Community, the TPP, EU, and several other bi-lateral trade agreements.
At the domestic level, we congratulate the Government for continued good performance in maintaining macroeconomic stability. We also recognize the progress that is being made through various pieces of legislation that have been recently approved: the amendment to the Constitution, the Land Law, and the Law on Procurement to name a few.
However growth continues to be sluggish. The impact of the continued dynamism of the foreign invested private sector on growth is muted by weak domestic consumer and business confidence and by a stagnant SOE sector. Maintaining macroeconomic stability, restoring the financial health of the banking and SOE sectors and leveling the playing field for the private sector seem important for reviving confidence in the economy. Accelerating the restructuring of the SOE and financial sector will be important for restoring longer term competitiveness and growth. In this regards, action on transparency and corporate governance in both sectors could provide some quick wins as divestment from non-core activities and equitization progress over time.
Enhancing skills of the Vietnamese workforce is a critical element of Vietnam’s competitiveness agenda. We welcome the CPV’s Resolution on comprehensive Education reform and look forward to supporting implementation. In particular, ways need to be found to help Vietnamese workers develop the cognitive, behavioural skills that employers find in short supply. Practical skills through revamped vocational training and more meaningful links between vocational education schools and employers is critical.
Vietnam has done well in reducing poverty in the last twenty years but data shows that about 19 million Vietnamese are still poor with about 75 percent of the extreme poor being Ethnic Minorities. In addition, a significant number live close to the poverty line and are vulnerable to falling back into poverty. In more recent years, inequality has risen modestly. While incomes grew across the economic spectrum between 2004 and 2010, the ratio of average income of the top 20 percent to that of the bottom 20 percent increased from 7 in 2004 to 8.5 in 2010. Inequity in access to social services is also worrisome. For example despite strong progress in health insurance coverage in general and progress towards achievement of health MDGs, there is a five-fold difference in infant mortality between provinces with the highest (Dien Bien) and lowest (HCMC) rates; and a threefold difference in the rate between ethnic minority children and children from the majority population. These inequities in income and basic social services feed on each other.
The private sector can play a stronger role in promoting access to social services. In addition to supplementing scarce public resources, private sector participation can bring clear benefits including reaching poorer communities, sustainability of service delivery, improved reliability of service and increased efficiency.
Pollution and other forms of environmental degradation are putting at risk future sources of economic growth and also adding to the burden of disease Vietnam faces. The revisions to the Law on Environmental Protection are an important step forward in improving the effectiveness of environmental management systems. The Government has also demonstrated its commitment to charting a greener and low-carbon development path with the adoption of the Climate Change and Green Growth strategies and the Resolution of the CPV on Climate Change, GG and the Environment. What is needed is more coordinated action including on energy efficiency and setting targets for GHG mitigation. The Government needs to continue the reform agenda in support of the national climate and GG priorities while scaling up implementation of urgent actions against low carbon targets, and designing integrated adaptation strategies in vulnerable areas, such as coastal cities and the Mekong Delta. Success in reaching these objectives will involve a stronger alignment of these priorities with the planning and budgeting processes and an increased focus on tracking results and impacts.
I hope our discussion this morning will lead to one or two clear and concrete follow up actions and provide some guidance for the technical working groups to take back into further discussions to detail additional follow up actions. We look forward to MPI’s strong leadership in monitoring progress on follow up from the VDPF and hope that we could have a report back at the middle of the year and also agree at that time the themes for the next VDPF. I hope in the spirit of the VDPF we will be succinct in our interventions, listen to others and give others a chance to be heard.
I look forward to a very productive first meeting of the Vietnam Development Partnership Forum and wish the Forum and indeed all of us every success.