| Project Detail |
Project Name Viet Nam: Enhancing evidence-based economic management capacity for sustainable, inclusive, and resilient development
Project Number 57271-001
Country / Economy Viet Nam
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
The TA aims to enhance the Government of Viet Nam (GoV)s evidence-based economic management capacity, including macroeconomic monitoring, planning and execution of public investment and external financing, and sector policies formulation. The TA responds to requests by the GoV for near-and medium- term support on various economic management issues. ADB will serve as the TA executing agency, drawing on expertise of relevant bank staff through a OneADB team, while relevant government ministries, provinces and institutions will serve as implementing agencies for specific outputs as appropriate.
Project Rationale and Linkage to Country/Regional Strategy
Viet Nam economy has performed impressively over recent decades. A bold policy package of market-oriented reforms, known as Doi Moi, started in 1986 and unleashed Viet Nams economic potential. Viet Nams economic recovery was impressive in 2022 with real GDP growth at 8%. The government is in the process of reviewing its experience of 40 years of reforms, drawing lessons for the next stage of development strategy with a goal to become an upper middle-income country by 2030 and a high-income country by 2045. They have requested ADB support in policy advice both to address emerging economic management issues, especially in the face of post-COVID-19 challenges, and in strategic planning and execution.
Viet Nams national economic planning was effective in the past in initiating and implementing bold reforms which resulted in commendable economic achievements over the past decades. However, increasing cross-sectoral development challenges have exposed critical weaknesses of the sectors or ministries-based economic planning system. Its predominantly administrative approach to economic policy making and planning is also generating more inertia to improving implementation effectiveness.
The government is making efforts to address these issues. MPI established the National Economic Steering Committee (NESC) to strengthen cross-sectoral linkages and inter-ministerial coordination, further promote structural reforms, and provide more holistic policy advice to the government. There is a lack of cross-ministerial mechanism that can facilitate inter-ministerial coordination and instill a holistic perspective of the economy rather than siloed views from sectoral ministries and provinces. Inadequate technical skills of staff also pose major constraints in producing high quality, farsighted and impartial policy advice. While the NESC is expected to fill in these gaps, the NESCs technical capacity is still limited and needs to be further strengthened to support their cross-sectoral mandate.
Similarly, public investment planning and execution are further decentralized, putting more emphasis on provincial governments responsibility to deliver local infrastructure investment. However, their capacity is at varying degrees at best, while instructions and guidance from central governments are also fragmented by each ministry (MPI, MOF, MOC, MONRE etc.) without an efficient coordination, resulting in regular revisions and reapprovals.
Impact
The projects impact is aligned with the effective implementation of the Government of Viet Nams national master plan for the period of 2021-2030 with a vision towards 2050. |
