Abstract
Chapter 5 looks at Asian aid from below. This chapter is a case study of Vietnam, which is the recipient of large quantities of Asian resources. Since Vietnam is also a recipient of aid from the West, it is possible to see how the different approaches play out in a recipient country. We can also see the proactive way that Vietnam interacts with its donors and investors. The first section provides background information on Vietnam’s political-economic situation before 1986, when its economic reforms began, while the second focuses on the reforms themselves. The third looks at foreign resources and how donors have performed in Vietnam. The fourth turns to Vietnam’s relations with the donors and its display of “ownership.” The fifth concludes with a discussion of current problems.
This is a preview of subscription content, log in via an institution to check access.
Notes
- 1.
Remittances have also been an important source of foreign exchange, but they operate through a different logic.
- 2.
The reforms continued although they were less dramatic than in earlier years. See Van Arkadie and Mallon (2003, 72–75, table 6.1) for a year-by-year description of reforms between 1986 and 2002.
- 3.
Rama was lead economist for the World Bank in Vietnam from 2002 to 2010. His main Vietnamese interlocutor was Vo Van Kiet, who served as prime minister (1991–1997), acting prime minister (1988–1990), deputy prime minister and chair of the State Planning Commission (1982–1986), and secretary of the CPV in Saigon (1975–1982).
- 4.
Alternative ideas about the process were that they came about through confrontation between reformers versus conservatives, or south versus north, or grassroots versus central authority.
- 5.
Of course the ASEAN countries themselves, like their Northeast Asian counterparts, also had a history of very high growth before the 1997 financial crisis (see World Bank 1993).
- 6.
The fact that inequality in Vietnam did not increase, despite the high growth rates, should be considered a success. It contrasts with the situation in China and other East Asian countries, where high growth has been accompanied by substantial increases in inequality in recent years.
- 7.
The poverty data rely on household surveys that are not done every year, which accounts for the choice of years. The figures shown are those employed by the World Bank and Vietnam’s General Statistics Office, which use the Vietnamese poverty line. Researchers say that it seems to parallel the World Bank’s US$ 1.25 per day definition of poverty.
- 8.
Given the generally low opinions of the quality of Vietnamese education, it is interesting to note that Vietnamese students, in their first participation in the Program for International Student Assessment (PISA) exams in 2012, scored above the OECD average; see OECD website. On possible reasons for this performance, see Bodewig (2013).
- 9.
In the cases of both ODA and FDI, commitment of funds has substantially exceeded the amounts actually invested. Estimates by the Ministry of Planning and Investment for 2005, for example, suggested that only about half of the commitments are fulfilled in the same year—although of course further amounts are likely to have arrived in succeeding years. Data on the ODA disbursement ratio comes from Hang (2007); for FDI, information is from Ahn and Thang (2007). For an update, see UN/EU/MPI (2014).
- 10.
Bank loans were generally negative on a net basis; equity investment spiked in 2007 and then turned negative. Not included in Table 5.3 are three large sovereign bond issues: US$ 750 million in 2005, US$ 1 billion in 2010, and another US$ 1 billion in 2014.
- 11.
A JICA official in the Hanoi office explained it this way: “Previously Japanese corporations designed the projects. Now we are in charge, but we try to coordinate closely with private businesses.” It should be noted that this kind of coordination is different from tied aid, whereby funds must be used in the donor country.
- 12.
The Korean Eximbank’s figures indicate a much lower figure for realized investment. For example, between 2005 and 2011, the Eximbank says South Korean firms invested only US$ 6 billion (EDCF website).
- 13.
Eximbank surveys say that the main reasons given by investors for putting money into Vietnam are to develop natural resources and, increasingly, to seek markets.
- 14.
One source (Hiep 2013, 2) suggests that the cumulative amount of Chinese concessional loans to the end of 2010 was US$ 500 million; this compares to total net flows of ODA to Vietnam between 1996 and 2010 of US$ 28 billion (Table 6.1). Hiep also says that Vietnam received grants of approximately US$ 50 million in the same time period.
- 15.
Again there is a discrepancy between the Vietnamese data and data from home country sources. The Chinese Ministry of Commerce says that FDI stock in Vietnam in 2013 was only US$ 2.2 billion.
- 16.
There are also important informal relations among Asian donors. In particular, Japan and South Korea are close; some observers see the former as providing help and lessons for the latter. Much less interaction occurs between China and either Japan or South Korea. China seems to stay to itself, and others have little information about its activities (interviews with Asian officials, Hanoi, March 2010, July 2013).
- 17.
Both Asian and Western donors report that China sometimes attended CG meetings, but did not speak. A Chinese official in Hanoi said the local representatives do not have permission to give opinions (interview, Chinese Embassy, Hanoi, July 2013).
- 18.
As part of the preparation for the December meetings of the CG, the World Bank and other donors prepared an annual Vietnam Development Report. See especially the 2011 report (World Bank 2011).
- 19.
There is some overlap since France and Germany are included in both. They are, however, the smallest of the six banks in terms of their contributions and are less active than the other four banks in relations with the government.
- 20.
A useful analysis for this purpose is Forsberg (2008), who compared the way that Japan and Sweden operated in Vietnam as paradigmatic examples of the two groups.
- 21.
Several aid agencies mentioned that the government is not very interested in social projects in general.
- 22.
As they left Vietnam, the Swedish development agency (SIDA) produced an evaluation of their aid to the country; see McGillivray et al. (2012).
- 23.
This system is very controversial. For a brief summary of the issues, see Kaplan (2012). One problem is that the two middle-income categories cover an extremely broad range: US$ 1036–US$ 12,615 at the present time. Another is that the system takes no account of other factors such as inequality, human development, and social exclusion. In the case of high inequality, for example, a small, wealthy elite can raise the average income of the country while leaving the large majority in poverty.
- 24.
Australia has a position similar to that of the Asians; it is increasing aid to Vietnam.
- 25.
This issue has been a source of conflict between Japan and the DAC for a long time. Many of Japan’s big recipients have been and are middle income by World Bank and OECD definitions.
- 26.
Sweden did not necessarily handle the news of their departure well. While many donors knew about it, the government was apparently not informed until late in the process (Forsberg 2010).
- 27.
A recent report on foreign aid to Vietnam, which concentrates on the form it may assume as a result of achieving middle-income status, is Prizzon and Schmaljohann (2016).
- 28.
Indeed, these problems had been latent from the very beginning of the reform period. Table 5.1 indicates that Vietnam, unlike the ASEAN Four, had both trade and investment deficits from 1990. Comparisons have also been made between Vietnam and China, but China never had the kinds of deficits that have characterized Vietnam. On the contrary, one of China’s problems is its huge trade and current account surpluses, which lead to conflicts with industrial countries.
- 29.
Equitizing means transforming SOEs into joint stock or limited liability companies, where the government could maintain some or all ownership.
- 30.
Political liberalization and lack of corruption are not seen as issues that Asian donors want to pursue.
References
ADB (2008) Emerging Asian Regionalism: A Partnership for Shared Prosperity (Manila: ADB).
Akrasanee, N., and A. Prasert (2003) ‘The Evolution of ASEAN-Japan Economic Cooperation,’ in J. Wanandi et al. ASEAN-Japan Cooperation: A Foundation for East Asian Community (Tokyo: Japan Center for International Exchange), 63–74.
Amer, R. (2012) ‘Exploring Challenges to Human Security in the Vietnamese Context,’ paper presented at Conference on East Asian Human Security and Post-Conflict Development in Comparative Perspective, Ewha Women’s University, Seoul, Korea, May 18.
Bodewig, C. (2013) What Explains Vietnam’s Stunning Performance in PISA 2012? (Washington, DC: World Bank).
Brocheux, P., and D. Hemery (2011) Indochina: An Ambiguous Colonization, 1858–1954 (Berkeley: University of California Press).
De Vylder, S., and A. Fforde (1988) Vietnam: An Economy in Transition (Stockholm: Swedish International Development Agency).
Dollar, D. (2002) ‘Reform, Growth, and Poverty in Vietnam,’ Policy Research Working Paper 2837 (Washington, DC: World Bank).
Dutton, G.E., J.S. Werner, and J.H. Whitmore (2012) Sources of Vietnamese Tradition (New York: Columbia University Press).
Forsberg, L.T. (2007) Defining Strong Ownership: Institutional Determinants and Stakeholder Interests in Vietnamese Development Planning (Stockholm: Almqvist and Wiksell International).
Forsberg, L.T. (2008) ‘Vietnam: The Making of Recipient Ownership and Responses to Swedish and Japanese Aid,’ in A.M. Jerve, Y. Shimomura, and A.S. Hansen (eds.) Aid Relationships in Asia: Exploring Ownership in Japanese and Nordic Aid (Basingstoke and New York: Palgrave Macmillan), 191–208.
Forsberg, L.T. (2010) ‘The Swedish Exit from Vietnam: Leaving Painfully or Normalizing Bilateral Relations?’ FRIDE Project Report (Madrid: FRIDE).
Hang, N.T.T. (2007) ‘Vietnam,’ Country Study Prepared for the Project on Southern Perspectives on Reform of the International Development Architecture (Ottawa: North-South Institute).
Herbert, S. (2013) ‘The Future of EU Aid in Middle-Income Countries: The Case of South Africa,’ ODI Working Paper 370 (London: Overseas Development Institute).
Hiep, L.H. (2013) ‘The Dominance of Chinese Engineering Contractors in Vietnam,’ ISEAS Perspective No. 4 (Singapore: Institute of Southeast Asian Studies).
IMF (International Monetary Fund) (2014) ‘Vietnam: 2014 Article IV Consultation – Staff Report,’ Country Report No. 14/311 (Washington DC: IMF).
IMTF (ODA Inter-Ministerial Task Force) (2012) Seventh Joint Portfolio Performance Review (Hanoi: EDCF).
Jandl, T. (2013) Vietnam in the Global Economy: The Dynamics of Integration, Decentralization, and Contested Politics (Lanham, MD: Lexington Books).
JICA (2013a) ‘JICA’s ODA to Vietnam: Inclusive and Dynamic Development’ (Hanoi: JICA).
Kaplan, S. (2012) ‘Do World Bank Country Classifications Hurt the Poor?’ Fragile States Resource Center. http://www.fragilestates.org/2012/02/23/do-world-bank-country-classifications-hurt-the-poor.
Kharas, H., K. Makino, and W. Jung (eds.) (2011) Catalyzing Development: A New Vision for Aid (Washington DC: The Brookings Institution Press).
Koch, S. (2015) ‘From Poverty Reduction to Mutual Interests? The Debate on Differentiation in EU Development Policy,’ Development Policy Review 33(4), 479–502.
Korea Eximbank (Export-Import Bank of Korea) (2014) ‘Small- and Medium-Size Enterprises and International Procurement with the Economic Development Cooperation Fund,’ press release, May 29 (Seoul: Export-Import Bank of Korea).
Lawrence, M.A., and F. Logevall (eds.) (2007) The First Vietnam War: Colonial Conflict and Cold War Crisis (Cambridge, MA: Harvard University Press).
Lim, W. (2010) ‘Korea’s Knowledge Sharing Program,’ paper presented at Institute for Development and Human Security, Ewha Womans University, Seoul, Korea, June 8.
Logevall, F. (2012) Embers of War: The Fall of an Empire and the Making of America’s Vietnam (New York: Random House).
Malesky, E.J. (2008a) ‘Provincial Governance and Foreign Direct Investment in Vietnam,’ in Saigon Times, Twenty Years of Foreign Direct Investment in Vietnam (HCMC: Saigon Times).
Malesky, E.J. (2008b) ‘Straight Ahead on Red: How Foreign Direct Investment Empowers Subnational Leaders,’ Journal of Politics 70(1), 97–119.
Masina, P. (2012) ‘Vietnam between Developmental State and Neoliberalism: The Case of the Industrial Sector,’ in K.S. Chang, B. Fine, and L. Weiss (eds.) Developmental Politics in Transition: The Neoliberal Era and Beyond (Basingstoke and New York: Palgrave Macmillan), 188–210.
McGillivray, M., D. Carpenter, and S. Norup (2012) Evaluation Study of Long-Term Development Co-operation between Vietnam and Sweden (Stockholm: Swedish International Development Cooperation Agency).
Morley, J.W., and M. Nishihara (eds.) (1997) Vietnam Joins the World (Armonk NY: M.E. Sharp).
OECD (2008b) Survey on Monitoring the Paris Declaration: Making Aid More Effective by 2010 (Paris: OECD).
OECD (2013b) Structural Policy Country Notes: Vietnam (Paris: OECD).
Ohno, I. (2004) Fostering True Ownership in Vietnam: From Donor Management to Policy Autonomy and Content (Tokyo: GRIPS Development Forum).
Ohno, K. (2009) ‘Avoiding the Middle-Income Trap: Renovating Industrial Policy Formulation in Vietnam,’ ASEAN Economic Bulletin 26(1), 25–43.
Ohno, I., and K. Ohno (2008) ‘Ownership of What? Beyond National Poverty Strategies and Aid Harmonization in the Case of Vietnam,’ in A.M. Jerve, Y. Shimomura, and A.S. Hansen (eds.) Aid Relationships in Asia: Exploring Ownership in Japanese and Nordic Aid (Basingstoke and New York: Palgrave Macmillan), 41–64.
Pincus, J. (2009) ‘Vietnam: Sustaining Growth in Difficult Times,’ ASEAN Economic Bulletin 26(1), 11–24.
Prizzon, A., and M. Schmaljohann (2016) Age of Choice: Viet Nam in the New Development Finance Landscape (London: Overseas Development Institute).
Rama, M. (2008) Making Difficult Choices: Vietnam in Transition, Working Paper No. 40, Commission on Growth and Development (Washington DC: World Bank for the Commission on Growth and Development).
Reidel, J. (2009) ‘The Global Crisis and its Long-run Implications for Vietnam,’ paper prepared for UNDP-Hanoi (Hanoi: UNDP).
Riedel, J., and B. Comer (1997) ‘Transition to a Market Economy in Vietnam,’ in W.T. Woo, S. Parker, and J.D. Sachs (eds.) Economies in Transition: Comparing Asia and Europe (Cambridge, MA: MIT Press), 189–213.
Taylor, K.W. (2013) A History of the Vietnamese (New York: Cambridge University Press).
Van Arkadie, B., and R. Mallon (2003) Vietnam: A Transition Tiger? (Canberra: Asia Pacific Press at the Australian National University).
Van, H.T.H., and D.Y.T. Sam (2009) ‘Vietnam-China Trade, FDI, and ODA Relations (1998–2008) and the Impacts on Vietnam,’ in M. Kagami (ed.) A China-Japan Comparison of Economic Relationships with the Mekong River Basin Countries, BRC Research Report No. 1 (Bangkok: Bangkok Research Center, IDE/JETRO).
VELP (Vietnam Executive Leadership Program) (2012) ‘Structural Reform for Growth, Equity, and National Sovereignty,’ Policy Discussion Paper Prepared for VELP 2012 (Cambridge, MA: Ash Center, Kennedy School).
VELP (2013) ‘Unplugging Institutional Bottlenecks to Restore Growth,’ Policy Discussion Paper Prepared for VELP 2013 (Cambridge, MA: Ash Center, Kennedy School).
VELP (2015) ‘Institutional Reform: From Vision to Reality,’ Policy Discussion Paper Prepared for VELP 2015 (Cambridge, MA: Ash Center, Kennedy School).
Womack, B. (2006) China and Vietnam: The Politics of Asymmetry (New York: Cambridge University Press).
World Bank (1993) The East Asian Miracle: Economic Growth and Public Policy (New York: Oxford University Press for the World Bank).
World Bank (2011) Vietnam Development Report 2012: Market Economy for a Middle-Income Vietnam, Joint Donor Report for the Vietnam Consultative Group Meeting, December 2011.
World Bank (2012) Well Begun, Not Yet Done: Vietnam’s Remarkable Progress on Poverty Reduction and the Emerging Challenges (Hanoi: World Bank in Vietnam).
World Bank (2013) Taking Stock: An Update on Vietnam’s Recent Economic Developments (Hanoi: World Bank in Vietnam).
World Bank (2014) Taking Stock: An Update of Vietnam’s Recent Economic Developments (Hanoi: World Bank in Vietnam).
Zhu, Z. (2010) ‘China’s Foreign Economic Cooperation for CLMV: Contract Engineering in CLMV,’ in M. Kagami (ed.) Economic Relations of China, Japan, and Korea with the Mekong River Basin Countries, BRC Research Report No. 3 (Bangkok: IDE/JETRO, Bangkok Research Center).
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2017 The Author(s)
About this chapter
Cite this chapter
Stallings, B., Kim, E.M. (2017). Vietnam as an Asian Recipient of Aid. In: Promoting Development. Development Cooperation and Non-Traditional Security in the Asia-Pacific. Palgrave, Singapore. https://doi.org/10.1007/978-981-10-3165-6_5
Download citation
DOI: https://doi.org/10.1007/978-981-10-3165-6_5
Published:
Publisher Name: Palgrave, Singapore
Print ISBN: 978-981-10-3164-9
Online ISBN: 978-981-10-3165-6
eBook Packages: Political Science and International StudiesPolitical Science and International Studies (R0)