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Vietnam
>> Regional Overview >> Vietnam Overview
Summary Tables
Program Summary
Previous Years' Activities
2001Last updated: 55
Introduction
With 78 million people, Vietnam is the second most populous country in Southeast Asia, and the 14th most populous in the world. Its people are young, well-educated, and hard working. The Vietnamese focus on achieving economic modernization and prosperity in line with its neighbors fits overall U.S. strategic goals to promote economic prosperity through the development of markets and opportunities for U.S. businesses. Vietnam shows the potential of becoming a significant trading partner and an emerging market for U.S. products and services.
The United States also shares Vietnam's humanitarian concerns for disadvantaged groups such as those at high risk of contracting HIV/AIDS, the disabled, displaced children, and those susceptible to annual floods.
USAID's objectives of enhancing the environment for trade and investment and improving access to services for selected vulnerable groups are consistent with Mission Performance Plan goals in open markets, economic development, humanitarian assistance, and health.
Development Challenge
Vietnam made steady progress in the 1990s to reduce poverty, but still faces many challenges. From 1993-1998, Vietnam decreased the proportion of the population below the poverty line from 58% to 37%. However, close to 80% of the population is rural, where the poverty level reaches 45%. Per capita income remains very low, at approximately $370. The United Nations Development Program estimates that the infant mortality rate is 42 per thousand live births, and that 40% of the children under five are malnourished. Vulnerable groups are hit particularly hard: minorities in remote areas; victims of seasonal flooding; victims of injuries from the war or the mines that were left behind; orphans and displaced children; and people at high risk of contacting HIV/AIDS.
In the wake of the 1997 Asian financial crisis, Vietnam slowed the pace of economic reform, which discouraged the foreign investment activity that had pushed Gross Domestic Product (GDP) growth above eight percent between 1990 and 1997. Economic growth fell below five percent in 1999; however, the economy rebounded in 2000, with growth approaching seven percent, led by rising exports and assistance flows.
The economy's structural deficiencies still impede Vietnam's ability to compete effectively in the global economy. Within the past nine months, Vietnam has made significant commitments to the United States and to the International Monetary Fund (IMF) and World Bank to address its structural problems. The July 2000 signing of the U.S.-Vietnam Bilateral Trade Agreement (BTA) reflects the ongoing reconciliation between the two countries and provides a roadmap for Vietnam's integration into the global economy. The BTA commits Vietnam to broad economic reform, including new market access for agricultural and industrial goods; increased intellectual property rights protections; transparency of laws, rules, and regulations; and safeguards for foreign investment. Commitments that Vietnam is making under the BTA will pave the way for negotiations with other major trading partners. Vietnam's implementation of the BTA will help it prepare for accession to the World Trade Organization (WTO).
In May 2001, the IMF and World Bank are expected to approve major loans to support Vietnam's aggressive poverty reduction efforts. Under the program, Vietnam will broaden trade and investment reforms made under the Association of Southeast Asian Nations Free Trade Area and the BTA; bring its financial system into conformity with international standards; and rationalize state-owned enterprises. Inefficient state banks and state-owned enterprises have been a major impediment to economic growth.
Vietnam's private sector has the potential to become a vibrant competitor in global markets-this is clear from the high education levels and entrepreneurship of Vietnam's youthful society. The World Bank calculates that Vietnam could earn another $1.5 billion per year from exports alone after the BTA enters into force. To realize the potential development of its private sector and compete effectively in global markets, the Government of Vietnam must build an open and fair regulatory and legal framework. Good governance, openness, and transparency are preconditions for lasting economic growth.
Implementing reforms and unleashing the potential of the private sector is important for the youth of Vietnam, who constitute 60% of the population. About 1.2 million young people are entering the job market each year, with expectations of gainful employment and productive lives. State-owned companies cannot meet the demand for jobs, and the forces of global market integration make it difficult for state-owned enterprises to compete in the global economy.
USAID can play a significant role in helping Vietnam modernize. It can help Vietnam develop as a member of the world economy and open and liberalize its markets by learning and adopting principles of democracy. USAID also can provide health and humanitarian support that improves the quality of life for the poor and disadvantaged.
Other Donors
The World Bank and the Asian Development Bank are active in modernizing the banking system and encouraging reform of state-owned enterprises. Other major bilateral donors assisting Vietnam include Japan, Australia, Denmark, Germany, Sweden, France, Belgium, the Netherlands, Switzerland, and the United Kingdom.
FY 2002 Program
Activities in Vietnam will continue to focus on trade and investment and supporting vulnerable groups. USAID's objective in trade and investment is to help open Vietnam's markets and promote broad-based growth in Vietnam's developing and transitional economy. Through the U.S.-Vietnam Trade Council, USAID has helped the Government of Vietnam better understand and prepare for the reforms required under the BTA. Future assistance will help Vietnam fulfill requirements for the BTA as well as for eventual WTO accession. Through funding to Boise State University, USAID also helps the University's partnership with Hanoi's National Economic University to strengthen its business school. The program trains Vietnam's future economic leaders and helps the National Economic University offer high quality business education, training, and research on a sustainable basis.
USAID works to increase the physical, social and economic opportunities for vulnerable groups such as the disabled or orphaned children; to prevent or minimize the human costs of natural disasters; and to improve the health status of Vietnam's citizens. Through the Leahy War Victims Fund, USAID supports several activities that provide prosthetics, promote rehabilitation, and improve accessibility for the disabled. Assistance now is targeted at providing much-needed orthotics. Through the Displaced Children and Orphans Fund, USAID supports the increased social and educational mainstreaming of displaced or disabled children through training, community mobilization, vocational rehabilitation, and advocacy.
Through the Asia and Near East regional HIV/AIDS program, USAID helps Vietnam control the spread of HIV/AIDS by improving surveillance capacity, policy-based interventions, and prevention programs. Other non-bilateral initiatives in Vietnam include marine conservation initiatives for Con Dao National Park; strengthening biodiversity conservation in mainland southeast Asia; the Bureau for Humanitarian Response's activity demonstrating U.S. educational and medical technologies and practices; creating an enhanced environment for trade and investment; the Global Bureau's activities applying Internet technology in water resource management and developing a resource cities partnership program; and efforts to promote a clean environmental revolution in Asia through the United States-Asia Environmental Partnership.
Vietnam's annual floods cause both human and economic destruction. In addition to emergency relief assistance for flood victims through USAID's Office of Foreign Disaster Assistance, USAID is helping Vietnam minimize the impact of future disasters by establishing early warning systems to improve flood warning capacity in central Vietnam, including weather forecasting, natural disaster zoning maps, and TV/radio disaster warning systems. USAID anticipates establishing a similar system for coastal regions.
Activity Data Sheets
- 440-006 Enhanced Environment for Trade and Investment
- 440-007 Improved Access to Services for Selected Vulnerable Groups
Country Background Information Resources
CIA Factbook
Library of CongressNational Geographic Country Maps
State Dept. Country Information
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Last Updated on: May 29, 2002 |
