Office of Development Effectiveness May 2015

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This report was commissioned by the Office of Development Effectiveness (ODE) of the Australian Government Department of Foreign Affairs and Trade (DFAT), as part of its 2012–13 work plan. The evaluation was managed and supported by ODE (Kellie Plummer and Debbie Bowman), and the enquiry conducted by IOD PARC consultants (Matthew Crump, Julian Gayfer, Bui Thi Thu Huong and Frank Noij). Quynh Nga Le, Evaluation Support Manager, Hanoi Post was assigned from the Mekong Regional Hub to work as a member of the team.

The evaluation team would like to thank those who assisted throughout the evaluation including DFAT staff in Canberra and at Post (led by Mark Palu), staff from the Australian Centre for International Agricultural Research, Vietnam Government staff and all other stakeholders.

Executive summary

Australia’s ongoing commitment to Vietnam’s sustainable development is founded upon a “positive economic, political and security relationship, reinforced by warm and expanding people-to-people links”.1 Formal diplomatic relations were established in 1973.

Since the early 1990s, Vietnam has made significant socioeconomic development gains, many of which can be traced to the country’s economic renovation (Do Moi) program, initiated in 1986. The Doi Moi reforms were announced amidst a period of low economic growth, hyperinflation and food shortages that highlighted the shortcomings of a centrally-planned economy. Vietnam’s transition towards a market-oriented economy has resulted in several tangible development gains.

However, the attainment in 2009 of ‘middle income status’ (which is based entirely on GNI per capita) does not automatically translate into concomitant improvements in the lives of all of a country’s citizens, and Vietnam as a ‘lower middle income country’ (LMIC) continues to face a number of specific development challenges. These challenges are most often associated with rising inequalities (particularly among regions and population groups) and the risks posed by environmental degradation and natural disasters as a result of climate change. In 2010, more than 20 percent of Vietnam’s population lived on less than US$2.25 per day.

Official Development Assistance (ODA) has played an important role in supporting Vietnam’s economic growth, and has been important in ameliorating several of the adverse impacts of the country’s transition to a market economy. ODA to Vietnam from multiple sources has risen steadily since 1993, and in 2012 stood at around $4 billion a year. However it is anticipated that ODA will decline (in absolute terms) over the coming years, and some bilateral donors have ended, are phasing out or have recast their development aid. In contrast Australia’s total ODA disbursements to Vietnam increasing steadily between 2008 and 2012, and in 2012 Australia was the largest provider of grant finance to Vietnam.

The primary purpose of this evaluation is to assist in the delivery of the remainder of DFAT’s existing country strategy in Vietnam (2010-15) and to inform future country strategy development and execution. This is achieved by assessing the effectiveness of DFAT’s development and implementation of the country strategy, the indicative results obtained and the legacy of past Australian aid investments. The evaluation focusses on the period 2010 to 2013 and the present tense used in the evaluation report refers to the program as at 2013. The evaluation findings and recommendations were discussed with DFAT’s Vietnam program in 2014 to assist the development of a new country strategy.

The evaluation relies primarily on qualitative methods of enquiry including document analysis, stakeholder interviews and a brief review of the assistance and engagement experience in two provinces (Quang Ngai province in the central region and An Giang province in the Mekong Delta). The evaluation’s findings are limited by the lack of quantitative data on program outputs, outcomes and administrative costs.

Strengths and relevance of the country strategy

The 2010-15 country strategy builds on a strong track record of cooperation between Australia and Vietnam, which has historically focused on four themes; developing the skills of individuals, improving Vietnam’s governance systems, investing in infrastructure and leveraging relationships through nurturing and capitalising on long-standing and strategic linkages with partners in Vietnam.

The country strategy design continues these threads but shifts the emphasis towards a mix of sectors where it had a track record of success, alongside adapting to address newly emerging challenges, in particular the area of economic integration. The strategy has no directly targeted statement on how it will support the Vietnam Government to address poverty. It states that ‘Donor investments must target reforms in areas that threaten to constrain future prosperity’ implicitly linking continued poverty reduction to increasing prosperity. The strategy is organised around three pillars with the percentage balance of expenditure through to 2013 given in the table below:

1.Human resource development through maintaining support for scholarships and training programs, whilst fostering relationships through people-to-people and institutional links (public and private sector) that facilitate knowledge exchange and are relevant long after the transition from a traditional aid partnership.

2.Economic integration through continued support to infrastructure development and economic reform.

3.Environmental sustainability through increasing rural access to clean water and sanitation, and through supporting climate change adaptation including disaster risk management, and promoting climate change mitigation through developing and advocating the use of clean technologies.

Table Expenditure against strategic objectives 2010-131


Total expenditure to June 2013 ($millions)

Percentage of bilateral program

Improvement in the quality of Vietnam’s human resources



Developing better transport infrastructure and policy to support economic integration



Enhancing environmental sustainability (including rural access to clean water and sanitation)



Vietnam and Australia recognised that in the strategy design there were some ongoing areas of Australian engagement that would need to be phased out to ensure that adequate resources were available to support these priorities. It was agreed that Australia would discontinue support for health systems reform and ethnic minority poverty reduction.

The country strategy provides a clear intent for Australian aid in terms of its overall aims and was developed through a structured and contestable process which provided strategic direction, a clear sense of priorities (choices were made) and the basis for a largely coherent and strategic program. It has provided a clear framework and robust basis for the consideration of new programming directions as proposed and followed through. In its formative stage there was adequate and timely consultation with the Vietnamese Government, whole-of-government partners and Australian non-government organisations (NGOs). Discussions between the Australian and Vietnamese Governments in the strategy development process revealed strong support for Australian assistance for the Cao Lanh Bridge, for scholarships (especially PhDs) and a renewed emphasis on agricultural research delivered through the Australian Centre for International Agricultural Research (ACIAR).

The country strategy objectives and initiatives are aligned with the three strategic priority areas in Vietnam’s Socio-economic Development Plan 2011-2015 (SEDP). However, the country strategy does not express its intended outcomes as specific and measurable results that can be easily linked to Vietnam’s development priorities.

The role of the private sector in development did not figure strongly in the shaping of the 2010-15 country strategy. There is a commitment to ensuring gender equality across all sectors of engagement and whilst the system to take forward the gender equality commitment within the country strategy is reasonably well developed it lacks the authority to take it to the next level and drive the shift on gender equality that the country strategy envisaged. Moreover, the absence of an overall country program logic with gender integrated into it has led to gender being diluted within the overall programming and implementation process.

The country strategy has been, and remains in step, with the evolving policy priorities of the Australian Government. The emphasis on the positive role that Vietnam can play in the Mekong subregion and wider ASEAN forums including on private-sector development and governance is an important aspect of this policy coherence.

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