Press Notice 55, Session 2006-07

Publication of Report

UK should provide less cash and more advice to Vietnam during the next stage of its development

Commons International Development Committee Report

The Government of Vietnam has achieved remarkable economic development in recent years and has a good track record on reducing poverty. The proportion of those living on less than $1 a day fell from 58.1% in 1993 to 19.5% in 2004. UK assistance to Vietnam has played an important role in achieving this progress.

Progress looks set to continue. Vietnam is likely to graduate from low- to middle-income country status in 2010. Donors will scale back their funding at this point. The International Development Committee has concluded, however, that DFID should not then simply withdraw from Vietnam. Challenges will remain, particularly in addressing inequality and vulnerability. Vietnam is also seriously off-track in terms of its Millennium Development Goal targets for sanitation and HIV/AIDS. DFID should therefore continue to have a role in addressing these and other challenges as Vietnam develops. But the Committee believes that the nature of the UK's development relationship with Vietnam will need to change significantly in the years ahead-moving away from large grants and towards providing more advice.

Rt Hon Malcolm Bruce MP, Chairman of the Committee, said:

ₓUK development assistance to Vietnam has helped to lift millions of people in Vietnam out of poverty. This assistance should not evaporate as Vietnam continues to develop economically. Millions of Vietnamese people will remain in poverty in the years ahead and DFID expertise will be needed there for some time. But UK assistance should become much more about providing evidence-based advice rather than substantial sums of money.â‚?

Much of DFID's programme in Vietnam is delivered through a grant to the Government's budget. The Committee supports this policy but cautions DFID against relying too heavily on the government budget channel. It recommends that DFID actively consider other options, such as funding civil society, where these are

equally or more effective. The Committee's view is that DFID's relationship with civil society in Vietnam is weak and needs to be re-assessed. A strong civil society needs to be developed so that it can fulfil an essential role in the next phase of Vietnam's development. DFID should play a role in supporting that development.

Background for Editors:

₠DFID has funded projects in Vietnam since 1992.

₠DFID's programme in Vietnam had a budget of around ‚£15 million in 2001 and this has more than tripled to over ‚£50 million today.

₠In September 2006, Hilary Benn, then Secretary of State for International Development, signed a ten-year Development Partnership Agreement with the Government of Vietnam which commits the UK to providing at least ‚£50 million a year in aid until 2010.

₠Inequality and vulnerability in Vietnam: ethnic minorities are nearly 10 times as likely to live in hunger as the majority population; 92% of Vietnam's poor live in rural areas; and a quarter of the population hover just above the poverty line.

₠The Committee visited Hanoi and poor communities in the rural highlands and the region of Hu੠in May 2007.

For further information on the report PN49.

Full report online.

[ENDS]

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Further Information:

The membership of the Committee is as follows: Malcolm Bruce MP (Chairman, Lib Dem), John Battle MP (Lab), Hugh Bayley MP (Lab), John Bercow MP (Con), Richard Burden MP (Lab), Quentin Davies MP (Lab), James Duddridge MP (Con), Ann McKechin MP (Lab), Joan Ruddock MP (Lab), Mr Marsha Singh MP (Lab), Sir Robert Smith MP (Lib Dem).

Media enquiries should be directed to the Committee media officer, Alex Paterson on 020 7219 1589/07917 488 488 [email protected]

Committee Contact: Matthew Hedges, 020 7219 0851, [email protected]

Committee website: www.parliament.uk/indcom

Watch committees and parliamentary debates online: www.parliamentlive.tv