Overview of Australia’s aid program to Vietnam
2013/14 Estimated Outcome: $130.8 million
2014/15 Budget Estimate: $141.3 million
Vietnam is one of Australia's most important and valued regional partners and Australia has a national interest in working together with Vietnam to overcome poverty. Vietnam’s centrality in the region means that a stable and growing Vietnam is good for regional cooperation, security, trade and prosperity. Australia has a valuable contribution to make in Vietnam by building on the successes and lessons learnt from two decades of bilateral development cooperation.
Vietnam has made enormous gains in development. More than 35 million people have been lifted out of poverty since the early 1990s as a result of rapid economic growth and reforms. The mortality rate of both infants and children under five has halved since 1990. Average life expectancy has increased from 49 years in 1970 to 75 today. Vietnam could achieve all Millennium Development Goals by 2015 with increased effort in access to sanitation and HIV prevention.
While poverty rates have improved in Vietnam, there remains a group of poor who have missed the economic opportunities of recent years. Around one in every 10 Vietnamese still lives in extreme poverty—on less than US$1.25 a day. Most are poorly educated, rely on agriculture and live in remote locations with few services. They include ethnic minorities at disproportionate levels. Income inequality is growing between urban and rural communities.
Vietnam is one of the most disaster-prone countries in the world with around 70 per cent of its population at risk of typhoons, torrential storms and flooding. These events, as well as an economic crisis, could easily push people who have risen above the poverty line in recent years back into poverty.
In 2010, Vietnam joined the ranks of lower middle income countries. Vietnam hopes to become a higher income industrial economy and to reduce poverty rates to a single digit level within the next decade. This cannot be achieved without sustainable and equitable economic growth. It also cannot be achieved without solid and reliable infrastructure, an appropriately skilled workforce and strong institutions. These constraints have been repeatedly identified by the Government of Vietnam, donors and the international business community. Australian aid is targeting these areas of need where there are good prospects for success and where we have a track record and deep understanding.
Helping Vietnam overcome poverty, maintain growth and achieve sustainable development is important for regional prosperity and security and is in Australia’s national interest. Australia will work constructively to facilitate growth and progress Vietnam’s greater economic integration. This will be both directly, through policy engagement and economic reform initiatives, and indirectly, through scholarships and training, infrastructure and water and sanitation programs. This suite of Australian investments will assist Vietnam’s continued economic development and further enhance Australian trade and investment opportunities.
Improve the quality of Vietnam’s human resources
Having a skilled workforce is essential for Vietnam to meet its objective of becoming an industrialised country by 2020. Australia's support focuses on three areas: improving individuals' skills and impact; strengthening public institutions; and promoting Australia-Vietnam linkages. Australia is providing quality postgraduate education to Vietnam’s lecturers, researchers, government employees and development workers, through Australia Awards Scholarships.
Improving the quality of Vietnam’s human resources
Develop better transport infrastructure and policy to support economic integration
Australia is supporting Vietnam’s economic integration through investments in hard infrastructure to improve local and regional connectivity (with a particular focus on the Mekong Delta), and via analytical and advisory assistance.
As Vietnam transitions to a middle income country and integrates with the global economy, it needs to reform its institutions and policies in a way that will stimulate a new period of growth that promotes opportunities for all. This includes reforms in areas like finance, banking, industry, state-owned-enterprise, competition policy and land policy. Australia is helping Vietnam build a sound evidence base to inform this process.
Developing better transport infrastructure and policy to support economic integration in Vietnam
Increase rural access to clean water and hygienic sanitation
Australia plays a lead role in the water and sanitation sector, promoting new and low cost technologies and innovation. In recent years, Australian support has focused on geographic areas which are most in need of assistance, and importantly has been able to leverage the Government of Vietnam’s own significant investments to improve poverty targeting, focus on hygiene and sustainability and provide an entry point for gender equality and disability discussions, particularly in schools.
Increasing rural access to clean water and hygienic sanitation in Vietnam
Advance climate change adaptation and mitigation (focusing on the Mekong Delta)
Australia is supporting Vietnam's own objectives to restructure its economy, improve energy security and better manage natural resources. Australia is focused on reducing future human, economic and environmental losses associated with climate change and natural disasters.
Addressing climate change is key to ensuring that Vietnam’s hard won development gains are not undone and that food security is guaranteed for millions of its people.
Australia is working with Vietnam in an effort to better understand the impacts of climate change, identify and implement appropriate adaptation measures (focusing on the Mekong Delta, the area of greatest risk) and support Vietnam’s efforts to promote low-carbon growth.
We are working with communities in the Mekong Delta to adapt to the impacts of climate change and protect food security and livelihoods.
Advancing climate change adaptation and mitigation in Vietnam
- In 2014, 185 conditional Australia Awards Scholarships were provided to Vietnamese citizens.
- Civil works commenced on Cao Lanh Bridge, following the ground-breaking ceremony on 19 October 2013, with resettlement implemented according to plan.
Australia has contributed to Vietnam achieving the following results in 2013:
- 82 per cent of the rural population has access to hygienic water (additional 1.2 million people)
- 60 per cent of rural households have hygienic latrines (additional 400,000 people)
- 90 per cent of schools equipped with water supply and sanitation facilities (additional 318 schools)
- 92 per cent of clinics equipped with water supply and sanitation facilities (additional 126 clinics).
- Helping 270,000 people build their resilience to climate change and natural disasters.
Advancing climate change adaptation and mitigation in Vietnam
Vietnam is one of the most vulnerable countries to the impacts of climate change. Its long coastline (3,200 km) and large deltas make it particularly susceptible to more intense and frequent natural disasters, rising sea levels, coastal erosion, and salt water intrusion. Vietnam loses around 2 per cent of GDP per year as a result of weather-related disasters. In 2013, Vietnam faced an unusually high number of natural disasters, including 15 intense typhoons causing 277 deaths/missing, 855 injuries and economic losses estimated at VND 28,000 billion (approximately $1.5 billion), approximately double the rate recorded for 2012. Such events are projected to get worse with the impacts of climate change. Vietnam is already experiencing wetter wet seasons, dryer dry seasons, higher intensity rainfall, flash flooding and increased frequency of tropical cyclones. Sea levels have already risen 20cm. If they rise by just one metre, more than 11 per cent of Vietnam’s coastal population (around 4 million people) could be displaced.
Australia supports Vietnam’s own objectives to restructure its economy, improve energy security and better manage natural resources, as per its 2011-15 Socio Economic Development Plan, Green Growth Strategy, and National Target Program to Respond to Climate Change. A disaster management framework was enacted in 2014 to help mitigate typhoon damage which is costing Vietnam around 1.5 per cent of GDP per year. Political commitment was reinforced by Communist Party Resolution 24 in June 2013, but lack of skills and budget at province level means on-ground implementation of national plans remains challenging.
Australia is focused on reducing future human, economic and environmental losses associated with climate change and natural disasters. We are working with communities in the Mekong Delta to adapt to the impacts of climate change to protect food security and livelihoods. We are also working with the Vietnam Government on low-carbon growth options including improved energy efficiency. We are building on our experience in disaster risk reduction and rural development to develop a new portfolio of initiatives that help Vietnam deal with the challenges of climate change.
Read the Australia–Vietnam Climate Change Delivery Strategy 2011–2016
Integrated Coastal Management Program (ICMP)
$18 million, 2011-2017
Vietnam has 3200 km of coastline which is home to nearly 40 million people. The coastal environment, which millions of people depend on for their livelihoods, is under pressure from population, deforestation, erosion, flooding and the impact of climate change. Water and soil quality is diminishing and ground water levels are falling.
Through an innovative partnership with Germany, Australia is helping Vietnam manage and protect its coastal ecosystems and respond to the impacts of climate change. The Integrated Coastal Management Program (formerly known as Climate Change and Coastal Ecosystems Program) is working with communities to find practical solutions to address the range of environmental hazards being faced in coastal ecosystems. The program works with local communities in five provinces to develop climate change adaptation plans. These plans include activities like rehabilitating mangroves, improving dyke construction, promotion of alternative income opportunities for communities dependent on coastal forests and demonstration of alternative farming practices. The program is also supporting national level policy development on climate change adaptation, using the lessons learned from the program.
Vietnam Climate Change Action Grants
$15 million, 2012-2015
Vietnam’s Climate Change Action Grants are part of Australia’s global ‘fast-start’ climate change finance commitment which continues Australia’s strong record of supporting community-level adaptation activities in developing countries.
Valued at around $15 million over three years, Australia’s support will help vulnerable communities in Vietnam manage the impacts of climate change and reduce greenhouse gas emissions. Activities include helping rice farmers to reduce greenhouse gas emissions, improve farming practices and identify practical steps for adapting to climate change drawing on local knowledge and experience.
With this support from Australia, around 247,000 vulnerable people in Vietnam will benefit through improved resilience to the unavoidable risks of climate change and weather-related disasters through new agriculture practices to reduce greenhouse gases and improve livelihoods from rice production.
Support Program to Respond to Climate Change
$14 million, 2012-2015
The Support Program to Respond to Climate Change (SP-RCC) is a multi-donor partnership that supports the Government of Vietnam in developing policy and institutional actions to enable an effective climate change response. Contributing donors include Japan, the World Bank, France, Canada and South Korea, with a combined commitment currently valued at over USD 200 million per annum. This is a performance-based policy operation where funds are released following the achievement of jointly agreed policy actions. These policy actions focus on climate change adaptation, mitigation and cross-cutting issues. Australia’s funds are earmarked for climate change planning and investment.
Strengthening institutional capacity for disaster risk management in Vietnam, including climate change related risks
$2.8 million, 2012-2015
Australia is contributing to UNDP’s program to build the capacity of Vietnam’s disaster risk management institutions, focusing on the Central Committee for Flood and Storm Control that is responsible for coordinating Vietnam’s planning and response to weather-related disasters and the Disaster Management Centre. With the UNDP, Australia supported implementation of the new Disaster Risk Management law which clarifies institutional roles and responsibilities for disaster preparedness and response.
This program is also engaged with the Vietnamese Red Cross, Women’s Union and Oxfam who work closely with these government institutions in the delivery of disaster risk preparedness and response. The Women’s Union joined Vietnam’s Central Committee for Flood and Storm Control in late 2013 and is working to enhance the voice of women and on-the-ground stakeholders in planning and decision-making.
Flood and Drought Risk Management and Mitigation Project
$5.85 million, 2012-2017
Co-financed with the Asian Development Bank, Australia is supporting Vietnam to better understand, prepare for and manage flood and drought events, with a focus on non-structural disaster management measures including institutional and technical knowledge, enhancing regional coordination and building capacity for community-based responses in Dong Thap and Tien Giang provinces.
Energy Distribution Efficiency Project
$7.6 million, 2013-2016
Australia is contributing to the World Bank’s US$470 million Distribution Efficiency Project which is supporting the Government of Vietnam to implement its National Energy Development Strategy to 2020 by reducing investment needs in the power sector, strengthening energy security and responding to climate change. Australian funding is helping power corporations and Electricity Regulatory Authority of Vietnam increase energy efficiency and achieve reductions in demand by applying smart grid technology and developing appropriate tariff regimes to facilitate reform in the power sector.
Energy Efficiency Standards and Labelling
$2.5 million, 2012-2014
Australia’s Department of Industry is assisting Vietnam’s Ministry of Industry and Trade to ensure household appliances sold in Vietnam are more energy efficient. The project builds the Ministry’s capacity to develop, manage and evaluate new standards, including implementing mandatory labelling of household appliances and setting up an on-line registration system to allow manufacturers and suppliers to easily register their products online to comply with the new regulations.
Vietnam Climate Innovation Centre
$6 million, 2013-2017
Australia is supporting the World Bank Group’s infoDev Clean Technology Program to establish a Climate Innovation Centre in Vietnam, as part of a global network of business incubation centres that aim to cultivate innovative technologies to help countries respond to the challenges and opportunities that come with climate change. The Vietnam Climate Innovation Centre will support the Government of Vietnam’s Green Growth Strategy by providing early-stage financing, business development and capacity building services to help small and medium enterprises develop and bring to market innovative climate-smart technologies in the water, energy and agribusiness sectors. DFAT has secured additional UK co-funding for the Centre (up to GBP 5 million), which Australia will administer on the UK’s behalf.
Developing better transport infrastructure and policy to support economic integration in Vietnam
Vietnam’s rapid economic growth has resulted in serious transport bottlenecks and infrastructure investment needs beyond the government’s own resources. In addition, many Vietnamese still live in remote and rural areas with little access to services and markets. The World Economic Forum’s 2010 Global Enabling Trade Report rated Vietnam 103 out of 125 countries for availability and quality of transport infrastructure. Better infrastructure is needed for Vietnam to reduce poverty and reach its ambition of becoming an industrialised country by 2020.
Australia is working with Vietnam to build new and better infrastructure with a particular focus on the Mekong Delta. The Mekong Delta is the fastest growing region in Vietnam. It is a major source of food production and industrial output. But there are critical supply-side constraints to linking producers and consumers. Our infrastructure investments are opening up opportunities for trade within the Mekong and with the rest of the world and connecting people to essential services such as hospitals and schools.
Our assistance is in both hard infrastructure, through direct investments to improve local and regional connectivity, and via analytical and advisory assistance such as the development of Public-Private Partnerships in the roads sector. Our new phase of support for economic integration is facilitating evidence-based economic restructuring.
Cao Lanh Bridge
$160 million, 2011-2017
Australia is co-financing the design, supervision and construction of the Cao Lanh Bridge across the Mekong River to facilitate trade and economic growth in the region. This bridge is a vital part of a major new road transport link, called the Central Mekong Delta Connectivity Project, which will link people and markets in the Mekong Delta to the rest of South-East Asia and beyond. Once finished, the bridge will be 2 kilometres long, 6 lanes wide and will sit 37.5 metres above the Mekong River. It will service 170,000 road users a day. The bridge is the largest single Australian aid activity in mainland South-East Asia.
Australia is providing funding for the detailed design and construction supervision for the Cao Lanh Bridge. A strong technical design aiming to mitigate risk has been a focus of Australian support. For example, ensuring the bridge can withstand impacts of climate change. Social challenges related to increased trade and regional connectivity will also be considered.
Mekong Transport Infrastructure Development Project
$48 million, 2007-2014
Vietnam’s transport and logistics systems are under strain from a growing population and expanding trade, especially in the Mekong Delta. There are 18 million people in the Delta who rely on just two major routes into Ho Chi Minh City. These two major routes are becoming increasingly congested. Many rural roads and local waterways are in dire need of upgrading. Only 10 per cent of rural roads are paved.
The Mekong Transport Infrastructure Development Project is improving access to markets and services for the rural poor by upgrading 194 kilometres of rural roads, including 118 bridges. The project is also upgrading 58 kilometres of feeder canals by widening waterways, reinforcing river banks and providing navigation aids. New wharfs and storage areas are also being built to help farmers get their produce to market. The project is benefiting communities in thirteen provinces. The project has also established a Regional Support Centre to strengthen the technical and management skills of local authorities to improve project preparation and monitoring of construction quality.
This is a World Bank project with an estimated total cost of US$380 million, of which Australia is contributing $48 million.
Southern Coastal Corridor Project
$45 million, 2007-2015
The project is completing the Greater Mekong Sub-region Southern Coastal Corridor—a road of 950 kilometres which runs along the Gulf of Thailand coast from Bangkok through Thailand, Cambodia, and ends at Nam Can in the south of Vietnam.
Australia is funding the upgrade of roads in Vietnam as well as Cambodia. In Vietnam, 70 kilometres of road are being upgraded including parts of national highways 80 and 63. The project will link key economic zones of Vietnam, Cambodia, Thailand and other regional countries and also reduce travel times and costs for road users.
Australia’s support is also helping to build a new international border crossing as well as implement HIV/AIDS and people trafficking awareness and prevention programs.
An estimated 1.3 million people will benefit from the project.
This is an Asian Development Bank infrastructure project with a total cost of approximately US$329 million, of which Australia is contributing $45 million.
Improving the quality of Vietnam’s human resources
Having a skilled workforce is essential for Vietnam to meet its objective of becoming an industrialised country by 2020. Vietnam’s Manpower Master Plan 2011-20 articulates its plans to improve the quality of its workforce through demand-based training and enhancing the capacity of policy makers, entrepreneurs and skilled workers.
Australia’s support focuses on three areas: improving individuals’ skills and impact; strengthening skill utilisation within the public and industry sectors; and promoting Australia-Vietnam linkages.
Australia is providing quality postgraduate education to Vietnam’s lecturers, researchers, government employees and development workers, through Australia Awards Scholarships.
More than 3,000 Vietnamese have completed university study in Australia under scholarships through the aid program since 1977. These leaders are actively influencing change in policy, business and academia and further reforms in Vietnam.
Australia Awards Scholarships
$123.7 million, 2010-2015 (excludes managing contractor and in-Vietnam costs)
The Australia Awards Scholarships in Vietnam aim to improve the quality of human resources in Vietnam through long term study in Australia. These scholarships equip leaders with skills and knowledge to personally drive change and influence development outcomes in Vietnam. They also strengthen public institutions and promote linkages between Australia and Vietnam. Priority areas of study include economic growth, education, environment, governance, rural development, and infrastructure.
Between 2010 and 2015, the program will give an additional 1,000 students this opportunity. The funding for the program includes in-Vietnam and in-Australia costs, including administration, course fees, support activities and pre-departure training. More information about the program is available from the Australia Awards—Vietnam website.
The Australian Volunteers for International Development (AVID) program promotes economic growth and poverty reduction in the Indo-Pacific region by assisting host organisations to deliver effective and sustainable development outcomes.
Since 1985 1,000 volunteers under AVID have worked in Vietnam. With over 60 new AVID volunteers annually, Vietnam is the third largest AVID recipient. Australian volunteers are working for a range of government, multilateral, local non-governmental and private sector organisations on key environment, education, health, agriculture, governance and economic integration areas that are important for Vietnam’s development.
Australian volunteers have contributed to important development outcomes in Vietnam, including:
- access to cancer treatment for 6,000 patients
- road safety education and provided helmets to 20,000 students, teachers and parents
- access to vocational training, job opportunities and health services for 3,750 children with disability, disadvantaged youth, ethnic minorities and those from rural areas.
Increasing rural access to clean water and hygienic sanitation in Vietnam
Australia plays a lead role in support to the Water and Sanitation sector in Vietnam, promoting new and low cost technologies and innovation. In recent years, Australian support has focused on geographic areas which are most in need of assistance. Importantly this has allowed Australia to leverage the Government of Vietnam’s own significant investments to improve poverty targeting, focus on hygiene and sustainability and provide an entry point for gender equality and disability discussions, particularly in schools.
Rural Water Supply and Sanitation National Target Program Phase 3
$65 million, 2012-2015
Australia is one of three donors providing targeted budget support and technical assistance to Vietnam to implement its Rural Water and Sanitation National Target Program Phase 3. The Program aims to improve the health and living conditions of the rural poor by providing clean water and sanitation and by promoting safe hygiene practices. By 2015, the program will give around 8 million people access to clean water and sanitation and build thousands of school and clinic latrines. Support through technical assistance will improve monitoring and evaluation and improve the management of water supply infrastructure. The program builds on National Target Program Phase 2, also supported by Australia, which helped provide access to clean water for 7.8 million rural poor and provided nearly 2.2 million rural households with hygienic latrines.
Regional and global programs in Vietnam
While the strong bilateral partnership is the foundation for Australia’s aid to Vietnam, some development challenges are better met through regional and global approaches and by harnessing the expertise of other Australian government departments.
Australia delivers several flagship initiatives addressing common development challenges for the region, including Vietnam, through regional funding.
Australia supports key regional institutions to promote regional cooperation and integration and to expand regional trade and transport links, including the Association of Southeast Asian Nations (ASEAN), Asia Pacific Economic Cooperation (APEC) and the East Asia Summit. Information about these programs is available on the Regional East Asia page.
Australia works with Asian countries to combat human trafficking and labour exploitation through a range of activities, including in Vietnam.
The Australian Mekong Water Resources Program is assisting Mekong River countries, including Vietnam, to reduce poverty and achieve sustainable development through the equitable and efficient use and management of water resources.
Controlling the HIV epidemic in Asia is a priority for Australian aid to Asia. The HIV/AIDS Asia Regional Program works in Myanmar, Cambodia, China, Laos, Philippines and Vietnam to reduce the spread of HIV associated with drug use among men and women.
From 2013 the Australia Mekong–Non-government Organisation Engagement Platform (AM-NEP) will support and facilitate change in the way Australian Aid and NGOs do business in Cambodia, Laos and Vietnam.
Vietnam benefits from Australia’s global partnerships with multilateral donors such as the World Bank and Asian Development Bank, United Nations development agencies as well as global health, education and environment programs. Core funding from the Australian Government enables these organisations to address global and regional development issues on a scale beyond the reach of Australia's aid program.
Other global programs enable Australian volunteers, youth, businesses, academics and higher education organisations to support Vietnam’s development such as the Australian Volunteers for International Development program and the Australian Leadership Award Fellowships.
Australia's aid program also supports development partnerships between NGOs in Australia and Vietnam. Under these partnerships, non-government organisations including CARE, ChildFund, World Vision, Caritas and Plan Australia have been supported to work with local Vietnamese partners in areas ranging from disaster preparedness and child protection, to activities to expand water and sanitation services and increase agricultural production. Further information is available on the website of each organisation.
The Australian Government is investing $21.3 million over four years (2011–15) to help eliminate blindness in East Asia through the Avoidable Blindness Initiative. Through the Vietnam Australia Vision Support Program, the initiative is improving the quality of life for people with low vision and blindness through better diagnosis, prevention of avoidable blindness, treatment and rehabilitation.
The Australian Government is committing up to $30 million over two years to Community-based Climate Change Action Grants to support adaptation and mitigation activities in developing countries with a focus on Vietnam.
Direct Aid Program
The Direct Aid Program (DAP) is a small grants program funded by the Department of Foreign Affairs and Trade (DFAT) and administered by the Australian Embassy in Hanoi. The Direct Aid Program is a flexible program that aims to advance developmental objectives and address humanitarian hardship in developing countries, including Vietnam, while at the same time fulfilling Australia’s international relations and public diplomacy objectives.
More information on the Direct Aid Program
Other government department programs
Other Australian and State and Territory government departments and agencies also play an important role in the delivery of Australia's aid program, including to Vietnam.
The Australian Centre for International Agricultural Research (ACIAR) works with organisations and farmers in Vietnam to improve crop yields and incomes and to adapt farming systems to the impacts of climate change.
Australian Government departments that provide development assistance to Vietnam include the Department of Education and the Department of Immigration and Border Protection. The Department of Education supports an Australia Awards Alumni Network that promotes ongoing understanding, cooperation and research among its members across the world. The Department of Immigration and Border Protection provides management training and support to Vietnam to assist partner organisations to identify and combat people smuggling.