Vietnam’s Poverty Reduction Support Credit, managed by the World Bank on behalf of 12 participating donors, is frequently cited as an example of best practice on policy dialogue in a mature development partnership.  Each year, GoV and donors negotiate around a set of policy actions for achieving Vietnam’s development goals.  The dialogue is also open to non-funding partners and CSOs, and makes use of existing sectoral dialogue processes.  There is no conditionality in the PRSC, but donors link their annual funding decisions to progress against the previous year’s benchmarks.  The instrument is well aligned with Vietnam’s budget calendar.

Vietnam’s SEDP 2006-2010 is a comprehensive national strategy for growth and poverty reduction, prepared through an extensive consultation process.  It is structured around the four pillars of business development, social inclusion, natural resource management and modern governance.  Individual sectors and provinces in Vietnam also prepare their own SEDPs.  A results framework for the SEDP has been adopted, and work is underway to develop a Medium-Term Expenditure Framework to support implementation.

The 2008 Paris Declaration monitoring survey concluded that Vietnam had already achieved seven of its Paris Declaration targets, and was on track for at least two more.  While ownership and mutual accountability were found to be robust, there needed to be more effort on alignment and results based management.  Accuracy of aid reporting and increased capacity for strategic planning at the local level are key aid effectiveness challenges.

This independent monitoring report notes that policy making in Vietnam at the sectoral level tends to be highly fragmented, with policy decisions emerging from multiple institutional sites and processes. The opaque nature of the policy process limits opportunities for participation by civil society actors, although Vietnam has made significant progress in promoting grass-roots participation at the community level. However, country ownership of sectoral and thematic strategies tends to be fairly low.

This synthesis report looks into the impact of donor harmonisation on democratisation processes in recipient countries. It is based on four case studies (Mali, Nicaragua, Peru and Vietnam) and explores the political implications of the aid effectiveness agenda and particularly of the new aid modalities.

Every second, the international development banks in Vietnam conduct a joint review of the performance of their lending operations, which looks in detail at obstacles to use of country PFM, procurement and safeguard systems.  The review offers a detailed analysis of the gaps between Vietnamese systems and the banks’ own requirements, and of any gaps and inconsistencies in Vietnamese laws.  It covers the legal framework for public investment management, the efficiency of government approval processes, the development of project-management capacity and the reform of procurement and other systems.  This has enabled the government and the banks to agree on a set of ‘fast track’ measures needed to improve portfolio performance and facilitate use of country systems.