1. Asian Dynamism and Vietnam’s CPRGS August 30, 2002 Izumi Ohno National Graduate Institute for Policy Studies

2. Background Diverse approaches to poverty reduction –Strategic alternatives –Options for institutional arrangements Poverty Reduction Strategy Paper (PRSP) in East Asia? Vietnam’s CPRGS as a model for growth-oriented poverty reduction

3. Why Vietnam? Vietnam’s CPRGS: widely recognized as “good practice” because of strong country ownership PRSP renamed to “Comprehensive Poverty Reduction & Growth (CPRGS) Strategy”

4. Why Vietnam? (contd.) First East Asian country to complete Full-PRSP (May 2002) Different perspective from the early PRSPs

5. Agenda 1.PRSP Overview 2.Main Features of Vietnam’s CPRGS 3.Asian Dynamism as Key Factor 4.Japan’s Development Cooperation to Vietnam

6. 1. PRSP Country Status 61 countries engaged in PRSP process [as of Aug. 2002] 18 completed Full-PRSP o/w ： 12 Africa, 4 LAC, 1 ECA, plus 1 EA (=Vietnam) o/w: 15 linked to “Enhanced HIPC Initiative”

7. PRPS Countries by Progress

8. PRSP Countries by HIPC Status

9. 2. Features of Vietnam’s CPRGS 3 key criteria for localizing PRSPs 1.No direct linkage with enhanced debt relief program, and low aid dependency 2.National development strategy, guiding budget & PIP 3.Relatively high social achievements, but underdeveloped economy

11. National Development Strategy National goal: “Industrialization and Modernization” by 2020 PRSP as a supplementary document to the core documents (i.e., 10-Year Strategy & 5-Year Plan), which embraces a growth-oriented development vision.

12. National Development Strategy PRSP to reinforce (not replace) the existing development strategy, dealing with poverty reduction in a cross-cutting and participatory manner.

13. PRSP as a Supplementary Document Existing dev. plan PRSPSector plans Budget govern supplement

14. PRSP as a Primary Document Existing dev. plan PRSP Sector plans, budget, MTEF, aid procedures symbolic govern

15. Strong Concern for Social Equity Gov’t commitment to giving high priority to social equity Fairly developed network for social service delivery Existing policies & programs targeted at the poor

18. Vietnam’s CPRGS … This is an action plan for realizing economic growth and poverty reduction objectives. The CPRGS paper sees a harmony between economic growth and measures to solve social problems…. quoted from CPRGS “Introduction”by The Socialist Republic of Vietnam, May 2002, pp.2-3.

19. East Asian Aspiration Equitable Growth Goal: Industrialization & Modernization 5-Year Plan & 10- Year Strategy Means: Growth PoliciesSocial Policies

20. 3. Asian Dynamism as Key Factor Development driven by trade & investment East Asian growth as collective phenomenon: “Flying Geese Pattern” Development as catching up (vs. development as poverty reduction) Participation in regional/global production network through int’l division of labor

22. Structural Transformation in East Asia Japan NIEs ASEAN4 Latecomers Latest comers Country Time Garment Steel Popular TV VideoHDTV 1 3 2

23. 1 Japan GarmentSteel Popular TV VideoHDTV Competitiveness Time Competitiveness Time Competitiveness 2 Garment Japan NIEs ASEAN4 Latecomers Latest comers International Division of Labor 3 Garment Steel Popular TV VideoHDTV Japan NIEs ASEAN4 Latecomers Latest comers

24. East Asia Reduced Poverty Despite Currency Crisis

25. Vietnam’s Aspiration Vietnam with typical East Asian aspiration Very strong interest in narrowing intra- regional gaps (vs. original ASEAN) Also, interested in infrastructure, HRD, trade, FDI attraction Narrow “poverty reduction” approach, not enough.

26. Real GDP GrowthPoverty Progress in the Last Decade Source: Government Statistics Office (GSO), Government of Vietnam. Source: World Bank, “World Bank and Vietnam,” [http://www.worldbank.or.jp/06group/RC_flame.htm].

27. Vietnam is a Large FDI Receiver

29. ４. Japan’s Development Cooperation Strong interest in the dynamic structure of the real economy Since 1992, supporting Vietnam’s three strategic tasks: –Long-term development –Systemic transition to a market economy –Active participation in East Asia’s dynamic production network

30. Japan’s Development Cooperation Balanced growth with social equity Infrastructure and policy advice –Transport & power –Large-scale, policy-oriented programs Partnership efforts

32. Future Challenges Concrete growth strategy: –Preparing for global integration: AFTA & WTO –Enhancing productivity and industrial competitiveness –Coping with risks and emerging social problems in the growth process

33. Future Challenges Concern for growth: to be addressed not only in the bilateral context, but also under the multilateral framework Japan: to support Vietnam’s balanced growth with equity—through an appropriate mix of grants, loans, and technical cooperation.

34. The END For more details, please see our information module at: http//www.grips.ac.jp/forum-e/ by GRIPS Development Forum