Commissioned by Ministryof Foreign Affairs of JapanThe Poverty Reduction Impact of
Economic Infrastructure Project (2)− Key issues and lessons learned from the Vietnam’s CPRGS Process −Final Report

March 2005

Abbreviations
ADB
AFD
AFTA
AusAID
CCBP
CG
CPRGS
DAC
DFID
F/S
GRIPS
HEPR
IDA
IMF
I-PRSP
JBIC
JICA
KfW
LMDG
MARD
MDGs
MOF
MOH
MOLISA
MPI
MTEF
NGO
NSGRP
ODA
OECD
O&M
PHRD
PIP
PPAs
PTF
PRGF
PRS
PRSC
PRSP
RPA
SEDP
SEDS
SOEs
UK
UNDP
VDGs
VDR
WB
WHO
WTO

Asian Development Bank
Agency Francaise de Developpement
ASEAN Free Trade Agreement
Australian Agency for International Development
Comprehensive Capacity Building Program for ODA Management
Consultative Group
Comprehensive Poverty Reduction and Growth Strategy
Development Assistance Committee
Department for International Development
Feasibility Study
National Graduate Institute for Policy Studies
Hunger Eradication and Poverty Reduction
International Development Association
International Monetary FundInterim Poverty Reduction Strategy Paper
Japan Bank for International Cooperation
Japan International Cooperation Agency
Kreditanstalt fur Wiederaufbau
Like-Minded Donor Group
Ministry of Agriculture and Rural Development
Millennium Development Goals
Ministry of Finance
Ministry of Health
Ministry of Labor, Invalids and Social Affairs
Ministry of Planning and Investment
Medium-Term Expenditure Framework
Non governmental organization
National Strategy for Growth and Reduction of Poverty
Official Development Assistance
Organization for Economic Cooperation and Development
Operation and MaintenanceJapan Policy and Human Resources Development Fund
Public Investment Plan
Participatory Poverty Assessments
Poverty Task ForcePoverty Reduction and Growth Facility
Poverty Reduction Strategy
Poverty Reduction Support Credit
Poverty Reduction Strategy Paper
Regional Poverty Assessment
Socio-Economic Development Plan
Socio-Economic Development Strategy
State owned enterprises
United Kingdom
United Nations Development ProgrammeVietnam Development Goals
Vietnam Development Report
World BankWorld Health Organization
World Trade Organization

Summary
Purpose of the Study
This report is the final product of “The poverty Reduction Impact of Economic Infrastructure
Project (2)”, a study commissioned by the Ministry of Foreign Affairs of Japan for the fiscal
year 2004. The study has served as a background document and the input for the third meetingof the POVNET: DAC Task Team on Infrastructure for Poverty Reduction, hosted by Japan,
held on March 22-24, 2005 in Tokyo (at JICA Institute for International Cooperation). As
Japan’s contribution and input, the midterm report of this study was distributed as room
document at the meeting. 1 Focusing on the Vietnam’s PRSP (CPRGS) experience as aconcrete example, the process analysis has been conducted on the evolution of the CPRGS.
The key elements and lessons learned have been extracted as a result of the analysis, which wasintended to contribute to the DAC Task Team in their preparation of the “Guiding Principles for
Donors to be more Effective on Poverty Reduction and Pro-Poor Growth through Economic
Infrastructure”. Throughout the study, close coordination took place among the Ministry ofForeign Affairs of Japan (Loan Aid Division and Aid Planning Division of the Economic
Cooperation Bureau), DAC Task Team on Infrastructure (Chairman: Mr. Hitoshi Shoji, Advisor
in Sector Strategy Development Department, JBIC, Secretariat in support of the Chairman:
Development Assistance Strategy Department, JBIC), and the study team.

Summary of the Contents
The Vietnamese government has introduced the new chapter of the CPRGS on the role ofinfrastructure at the December 2003 CG meeting. The role of the large-scale infrastructure as
one of the “growth” promoting measures -- which had been clearly articulated in Vietnam’s
existing national plans and strategies -- was duly reflected in the CPRGS. Through the
CPRGS expansion process, the donor community has revisited the importance of “growth” inpoverty reduction objectives. At the same time, awareness was raised among the donor
community on the necessary policy measures to ensure the effectiveness of infrastructure
investment.
This report endeavors to identify the key elements in the CPRGS process that lead to its
expansion in each chapter:
Chapter1 explains the background and the reason why “dual system” was created byelaborating the relation between the CPRGS and the existing national
plans/policies.
Chapter2 explains the difference between the CPRGS and the existing national plans/policies
by clarifying the PRSP principles in the Vietnamese context.
Chapter3 analyzes the reason for Vietnam’s strong ownership.
Chapter4 analyzes the reasons for the “pro-poor” inclination of the original CPRGS. The
chapter also explains the government’s incentive for coming up with the decision
to expand the CPRGS. It also provides the contents of the discussion at the CG
meeting where Vietnamese government has announced its intention to add a newchapter to the CPRGS. Intellectual inputs provided by various donors on thegovernment’s CPRGS expansion initiative was also explained in this chapter.
Chapter5 explains the policy measures and policy tools -- including PRSC -- to ensure theeffectiveness of infrastructure investments.
1

Room Document 2 (DAC Poverty Reduction Network (POVNET) Task Team on Infrastructure for Poverty
Reduction, 3rd Workshop on Developing the DAC Guiding Principles, Tokyo, March 22-24 (am), 2005)

Chapter6 explains the Vietnamese government’s initiative in enhancing the alignment
between the CPRGS and the existing national plans/strategies focusing on the“CPRGS roll out”. The chapter also touches upon the integration of the CPRGS
into the next 5 Year Plan (2006-2010).
In Chapter7, the key elements and lessons learned extracted from the CPRGS process analysis
were described as follows:<Key elements>
Vietnam has its own policy configuration before the introduction of the CPRGS and it has
already shown its strong commitment towards both “economic growth” and “poverty
reduction” in its core documents (i.e., SEDS and SEDP). In other words, Vietnamese
government, as a robust action body with ownership has already confirmed strong
commitment to the “economic growth” and “poverty reduction” prior to the elaboration of
CPRGS.
Debate among donor community(*) regarding the coverage of the CPRGS has been
taking place, and the government has endeavored to make sure the “role of infrastructure”
considering the balance between economic growth and poverty reduction.
(*) France, Germany and Japan considered that the CPRGS was focused too heavily on
the poverty reduction aspects, neglecting growth. Whereas, the WB, DFID andseveral countries within the Like-Minded Donor Group took the position that the
pro-poor orientation of the CPRGS is quite good. The debate among the donors
seemed to have facilitated the government to show its own position towards the issue.
Donor community has repeatedly pointed out the importance of strengthening thealignment between the CPRGS and the PIP. However, critical bottleneck existed as the
CPRGS lacked its provision on the role of the large-scale infrastructure, which the majorpart of the PIP occupies.
There was a shift in the worldwide trend towards perception of the role of theinfrastructure. The WB and the IMF have also revisited the importance of the role ofinfrastructure, which affected the donor community in Vietnam to realize its vital role.
The turning point would be the WB/IMF Annual Meeting held in September 2002, whenboth organizations expressed their increased awareness towards the importance of theinfrastructure on poverty reduction. Three months later, in December 2002 CG meetingin Vietnam, the Vietnamese government announced its intention to expand the CPRGS byadding the role of large-scale infrastructure. The decision made by the Vietnamese
government to add growth-promoting elements into the PRSP was well timed and would
be considered a “spearhead” of the worldwide trend.
There was a strong pressure and incentive on the Vietnamese government side forenhancing competitiveness, particularly improving the climate for investment -- both
domestic and foreign -- as the country aimed at its successful integration into the regional
and world economy. Vietnam intends to fully implement AFTA by 2006 and endeavors
to join the WTO by 2005. The development of the large-scale infrastructure and theimprovement of investment climate have complementary role and would work together topromote robust economic growth.
Concessional loan accounted for around eighty percent in the total ODA to Vietnam, andJapan, WB and ADB was the three major loan provider. As such, the government
needed to show more consideration towards Japan’s position. (Note that the IMF’s
Evaluation Report2 pointed out as follows: “…other international stakeholders saw the2 IMF Independent Evaluation Office Evaluation of PRSPs and the PRGF, Vietnam case study, July 6, 2004

government’s decision to include a chapter on “large-scale” infrastructure to have been
motivated by optics related to the need to facilitate closer alignment of Japanese
assistance with the CPRGS (rather than due to a lack of comprehensiveness in the original
document) ”)
The change in key personnel took place. MPI Minister Phuc has deep understanding
towards Japan’s development philosophy and aid policy.
The government was competent enough to prepare the additional chapter under its own
initiative in terms of both the contents and the process as it has previously produced
I-PRSP and the original CPRGS. In other words, the government’s strong ownership
existed for the CPRGS expansion initiative as well.
<Lessons learned>
For a country like Vietnam, whose ownership is unusually strong and has alreadyestablished its robust and effective policy configuration and strategic planning documents,
the priority among development goals should be carefully set, by thoroughly identifying
and respecting the real needs and direction of their socio-economic development.
Main reason why Vietnam added an infrastructure chapter on the original CPRGS later onis they had a clear vision on the necessity of infrastructure development in their own
strategic documents, regardless of donors’ preference to large-scale infrastructure.
What is first and foremost crucial is that donors align its aid with the national priority ofthe partner country.
Donors are requested to assess the current situation ofsocio-economic development in partner countries and set the priority among development
goals through a close consultation with the partner country.
Hence, (1) dialogue between the government and donors towards the formulation andimplementation of strategic development plans to ensure donors’ alignment to it, and (2)donors’ alignment with government’s national and sector policies, strategies and priorities
are crucial. Ensuring donors’ support to government priorities is highly important tosupport ownership and to improve aid effectiveness.

Table of Contents

Introduction……………………………………………………………………………. 1
1. Relation between the CPRGS and the existing National Plans/Strategies…………. 2
2. Difference between the CPRGS and the existing National Plans/Strategies………. 5
3. Vietnam’s strong ownership in the CPRGS process………………………………... 6
4. Expanding the CPRGS by adding the role of “large-scale infrastructure”………… 6
5. Policy measures and policy tools to ensure the effectiveness ofInfrastructure investments………………………………………………………… 11
6. Aligning the CPRGS with the existing National Plans/Strategies………………… 15
7. Main lessons learned and summary of the CPRGS process andthe “key elements” that led the CPRGS expansion to success……………………..17
Attachment 1

CPRGS Process in Vietnam………………………………………… 23

The Evolution of the Poverty Reduction Strategy Paper in Vietnam:
Acknowledging the Role of Large-Scale Infrastructure on Poverty
Reduction and Pro-Poor Growth -- key issues and lessons learned from theVietnam’s CPRGS Process(background document and the input for OECD DAC Infrastructure Working Group)
Introduction
Infrastructure is recognized widely as one of the vital elements that contribute to poverty
reduction and pro-poor growth. Recognizing the various linkages among infrastructure,
growth and poverty reduction, it is important that “infrastructure” is properly addressed inpoverty reduction strategy. Given this context, this paper discusses the “key elements andlessons learned” from the Vietnam’s experience in the evolution of the PRSP. Focusing on the“process”, it aims to provide concrete examples of “how” and “why” the role of infrastructure
has been duly acknowledged in the country’s poverty reduction strategy. It also discusses thepolicy measures as well as policy tools to ensure the effectiveness of infrastructure investments
in Vietnam.
Before identifying the “key elements and lessons learned”, following is a brief summary of
the Vietnam’s PRSP (CPRGS: Comprehensive Poverty Reduction and Growth Strategy) process
in sequence of major facts and events, to support better understanding of the linkages among
each key element and lesson described in the later chapters. (Please refer to the Attachment 1
on the CPRGS process for details.)< A brief summary of the Vietnam’s PRSP (CPRGS) process >(1) Based on the agreements among the Vietnamese government, the WB and the IMF, thegovernment, under its strong ownership, has produced the I-PRSP and the CPRGS(Full-PRSP) on April 2001 and May 2002, respectively. The government has newly
introduced these documents in spite of the existence of its own robust policy configurationthat has been functioning for many years.
(2) During and after the creation of the CPRGS, debate among donor community intensified
regarding its “status” and its “coverage”.
Some donors considered it as a“supplementary document”, while others regarded it as the “highest core document”.
Some donors pointed out that it lacked proper attention on the growth aspect, while others
seemed to be satisfied with its strong pro-poor inclination. The CPRGS has created“dual system” with the existing national plans and strategies since the government has
firmly maintained the existing policy configuration on the one hand and has made strong
commitment to the CPRGS on the other.
(3) The government has decided to “expand” the CPRGS by adding the role of the large-scale
infrastructure as a new chapter. Various intellectual inputs have been provided to support
this initiative under the framework of government-donor partnership.
(4) Through the CPRGS expansion process, the awareness of the importance of economic
growth to poverty reduction has been raised and the government as well as the donor
community has appropriately recognized the vital role of the large-scale infrastructure as
an engine to growth. Importantly, various policy measures that need to be properly
addressed to maximize the effectiveness of infrastructure investment have become sharedrecognition among the government and the donor community in Vietnam.
(5) As a result of the CPRGS expansion in November 2003, the CPRGS has become morecomprehensive and the coverage issue has been greatly improved. This fact has drawn
people’s closer attention to the remaining issue of the “status” of the CPRGS, as the
expanded CPRGS has become more comparable to the existing Five-Year1

Socio-Economic Development Plan.
(6) The issues related with the “dual system” are expected to resolve in the near future as thegovernment has officially decided to integrate the CPRGS into the coming Five-Year
Socio-Economic Development Plan (2006-2010 SEDP). The significant policy andinstitutional issues related with large-scale infrastructure investment which have been
identified through the CPRGS process are expected to be reflected in the next SEDP.
Figure 1 (in chapter 7) illustrates the overall evolution process of the CPRGS showing thegovernment’s stances and activities in comparison with those of the donors. Figure 2 (inchapter 7) shows the sequence of the government’s strategies in the CPRGS expansion process.
Matrix 1 (in chapter 7) summarizes the “key elements” that led the CPRGS expansion process
to success in accordance with the above sequence3: (1) Formulation-legitimization: legitimacy
and incentive of the government’s decision to expand the CPRGS, (2) Constituency building:securing supporters and constituency to implement the CPRGS expansion process, (3) Resource
accumulation: securing necessary resources in moving ahead with the CPRGS expansion
process, (4) Organizational design: formulating necessary organizational/institutional system inorder to promote the CPRGS expansion process, (5) Resource mobilization: mobilizing
necessary resources in moving ahead with the CPRGS expansion process, (6) Monitoring
impact: ensuring and monitoring the effectiveness of the expanded CPRGS.
Based on the process analysis of the Vietnam’s CPRGS experiences, following six items
would be taken out as major points for discussion:① Relation between the CPRGS and the existing National Plans/Strategies② Difference between the CPRGS and the existing National Plans/Strategies③ Vietnam’s strong ownership in the CPRGS process④ Expanding the CPRGS by adding the role of “large-scale infrastructure”⑤ Policy measures and policy tools to ensure the effectiveness of infrastructure investments⑥ Aligning the CPRGS with the existing National Plans/Strategies

1. Relation between the CPRGS and the existing National Plans/Strategies
The Vietnamese government describes the CPRGS as an “action plan” that translates theexisting National Plans and Strategies -- i.e., the Ten-Year Socio-Economic Development
Strategy (2001-2010 SEDS) and the Five-Year Socio-Economic Development Plan (2001-2005
SEDP) -- into concrete measures. The SEDS and SEDP are the core documents which all
sector plans, public investment plans (PIP), and annual budget allocation are guided by, and the
CPRGS is regarded as their supplementary document. 4 Vietnam has the existing policy
configuration and the CPRGS is seen as one of the “other documents” which was neverintended to become an overarching document by replacing the core documents. The
differences in their formulation process symbolize their differences in terms of legitimacy andaccountability -- while the core documents were reviewed by the Communist Party and related
ministries and approved by the Central Communist Party Congress, the CPRGS was approvedby the Prime Minister, not debated in the National Assembly.

3 The analysis has been conducted based on the classification specified in: Managing Policy Reform -- Concepts andTools for Decision-Makers in Developing and Transitioning Countries, Derick W. Brinkevhoff and Benjamin L. Crosby
4 Fostering True Ownership in Vietnam: From Donor Management to Policy Autonomy and Content, GRIPS

Development Forum, November 2004

2

Figure 3: The relationship between the CPRGS and other existing planning documents5
Ten-Year Socio-Economic
Development Strategy(SEDS)
Five-Year Plan
(SEDP), Targeted
Programs

Comprehensive
Poverty Reduction
and Growth
Strategy (CPRGS)
Public Investment
ProgramAnnual Plans
Source: The CPRGS document, the Socialist Republic of Vietnam, November 2003
The IMF’s Evaluation Report6 pointed out that the donor community was the main target
audience for the CPRGS, and the CPRGS initiative was adopted by the Vietnamese authorities
in an effort to obtain concessional resources from the WB(IDA) and the IMF. This point could
also be drawn from the fact that the government had specified in the footnote of the first
CPRGS draft that (1) the purpose of producing the CPRGS was to obtain access to the WB and
the IMF loans, and (2) its status was a general guideline for donors.
While firmly maintaining its existing policy configuration, the government made commitment
to the CPRGS, which has created the “dual system”. As shortcomings, the “dual system” hasbrought about (1) limited involvement of the line ministries and local governments in the
CPRGS formulation process which has led to the fact that the CPRGS was not a well-known
document, and (2) debate among donor community regarding the status of the CPRGS. In
spite of its supplemental role, some donors intended to align their assistance strategies to the
CPRGS rather than to the SEDS and SEPD7. This was because international development
partners attach greater importance to the PRSP principles (outcome orientation, comprehensive
approach to pro-poor orientation, participatory approach etc.) that the CPRGS planning process
tried to accommodate. These donors were expecting that such government’s core documents
as well as the annual and multi-year budget plans, and the PIP would be integrated to the
CPRGS over time. The matrix below summarizes the basic views of the related donors
towards the status and coverage of the CPRGS.

5 The agenda of the first session of the CG meeting in December 2003 was “Review of progress in socio-economic

development 2001-2003 to reach Vietnam’s targets for the five-year period 2001-2005, fulfilling the potential of the
CPRGS – progress and challenges ahead”. The Vietnamese government has clearly set the Five-Year Socio-Economic
Development Plan as the main theme of discussion, and the CPRGS issues have been discussed within this framework.
This fact implies that the government has been continuously considering the CPRGS as the supplementary document of
the existing National Plans and Strategies.
6 IMF Independent Evaluation Office Evaluation of PRSPs and the PRGF, Vietnam case study, July 6, 2004
7 While France, Germany and Japan maintained their position that the CPRGS was not the only core document for
donors to align their assistance strategy to, the WB, ADB and several countries within the Like-Minded Donor Group
took the position that the CPRGS should be the highest core document to base their assistance strategy on.

3Matrix 2: The basic views of the related donors towards the status and coverage of the CPRGSFrance, Germany, Japan
WB, LMDG8
The
relationship • The CPRGS is a supplementary • The CPRGS should be the highest
between the CPRGS
core document to base donors’
document of the existing National
assistance strategy on, since its
and the and thePlans/Strategies. (An action plan
formulation process and theexisting
Nationalthat translates the government’s
contents reflect much of the PRSP
Plans/Strategies
existing plans and strategies.)
principles.
• The CPRGS is not the only core•
The CPRGS is the only document
document for donors to align theirthatisaccountableandassistance strategy to, since it wasmonitorable
tothedonorsasitnever intended to become an
wasproducedunderparticipatory
overarching
documentbyapproach by the government, civil
replacing the core documents.
society, NGOs, donors etc.
The legitimacy of the • The introduction of the PRSP • The CPRGS is most suitable to
CPRGS
be regarded as a strategic
requires prudent and cautious
document.
(Although theattitude especially in a country
government’s targeted poverty
like Vietnam where ownership isreduction plans such as HEPR:
strong and has its own policy
Hunger Eradication and Poverty
configuration -- policy and public
Reduction Plan exist, they are
investment decisions are madeweak and insufficient in terms ofbased on the government’s
target setting, prioritization,
existing plans and strategies.
monitoring system, resource
allocation etc.
The
relationship • It is not realistic to align budget, • It is mostly desirable to alignamong the CPRGS,
budget, PIP and donors’
PIP and donors’ assistance to thebudgetandtheassistance to the CPRGS.
CPRGS since the coverage of theassistance strategies
document is not comprehensive • The donors’ country assistanceof donorsenough to address important
strategies in the forthcoming
issues including the role ofyears should be prepared in line
large-scale infrastructure.
with the CPRGS.
• Important assistance priorities
still exist which has been
identified in the existing national
plans and strategies but notcovered in the CPRGS (such aslarge-scale infrastructure, higher
education,human
resource
development,
privatesectordevelopment etc.).
Balancebetween • The (original) CPRGS is focused • The CPRGS is praiseworthy ingrowth and poverty
too heavily on the poverty
the sense that it reflects strong
reduction (coverage
reduction aspect, not paying
pro-poor inclination.
of the CPRGS)
proper attention to the growth
aspects.
Source: JICA Study on PRSP Process, December 2004

8 The Like-Minded Donor Group: the group of donors largely consisting of European countries that provides assistancemainly in grants. (including Sweden, Denmark, the Netherlands, Germany, Canada, Finland, Norway, Australia,
Switzerland, and the United Kingdom)4

2. Difference between the CPRGS and the existing National Plans/Strategies
The CPRGS can be interpreted as a major turning point in the planning process of Vietnam byintroducing “PRSP principles”. Existing national plans and strategies were very much basedon a command view of the economy. By contrast, the CPRGS endeavored to spell out clear
development goals using empirical evidence and consultation to identify the policies best suited
to attain those goals, aligning resources behind those policies, and setting up appropriatemonitoring and evaluation mechanisms, though there still remain much room for improvement.
In short, the CPRGS process symbolizes a shift in the planning process, from a target-oriented
approach to one which is focused on achieving development outcomes. While recognizingthat PRSP principles cover broader issues, “outcome orientation”, “participatory approach” and“comprehensive approach to pro-poor orientation” are highlighted below. With regarding“ownership”, refer to the next item: “3. Vietnam’s strong ownership in the CPRGS process”.
<Outcome orientation>
The CPRGS reflects the Vietnam Development Goals (VDGs), which are the localizedversion of the development targets for the implementation of the UN Millennium Development
Goals (MDGs) that Vietnam committed to in 2002. The CPRGS outlines a set of 136
monitoring indicators in 3 targets in Economic Objectives and 12 targets in Social and Poverty
Reduction Objectives. The set of monitoring indicators is often regarded as the main value
added to the CPRGS initiative. On the implementation side, a meaningful monitoring andevaluation framework is necessary to track progress towards the goals of the plans. The
framework contained in the CPRGS appears to have been ambitious and thus a prioritized
implementation of the development objectives that better reflects administrative capacity is
critical.
<Participatory approach>
The Ministry of Planning and Investment (MPI), which had led the work on the I-PRSP,
established an inter-ministerial committee consisting of 50 officials from 16 government
agencies on June 2001 to guide the drafting process. A range of stakeholders includinginternational and local civil society organizations, NGOs, officials from the central, provincial
and district levels of administration, poor communities and international development partners
was involved in the process by participating in consultation workshops, regional workshops,
Participatory Poverty Assessments (PPAs) etc. The government-donor-NGO Poverty Task
Force (PTF), a partnership group established in 1999, has been the main point of interaction
between the CPRGS drafting team and the international development partners. Subgroups
within the PTF has been formed to support identify VDGs in the following eight thematic areas(Note that donors in parentheses are the lead donors that supported each initiative):(1) Eradicating poverty and hunger (WB);(2) Reducing vulnerability and providing social protection (WB and DFID);(3) Providing quality basic education for all (WB and DFID);(4) Improving health status and reducing inequalities (ADB and WHO);(5) Ensuring environmental sustainability (UNDP);(6) Promoting ethic minority development (UNDP);(7) Enhancing access to basic infrastructure (JBIC); and,
(8) Ensuring good governance for poverty reduction (ADB).
<Comprehensive approach to pro-poor orientation>
The CPRGS considers poverty is caused by factors related to inequality in regions, gender,
ethnic groups and educational attainment. The CPRGS comprehensively covers the pro-poor
aspects in the document. The CPRGS also recognizes that poverty is also considered as theother side of the rapid economic growth that has posed negative impacts (such as environmental
5and social impacts) on the poor. Thus, the CPRGS acknowledges that while economic growth
contributes to poverty reduction, the distribution of its benefits depends on the “quality” ofgrowth. In other words, in view of the growing inequalities, “how to bring benefits of thegrowth to the poor” is becoming all the more important, together with the efforts to assure
sustainable growth.

3. Vietnam’s strong ownership in the CPRGS process
The government’s ownership in the CPRGS process has been strong. Since the preparationof the I-PRSP in April 2000, Vietnamese government has displayed its strong ownership both inits process and its contents. The government, on its own initiative, has led the CPRGS process
and determined the contents. The documents have been first drafted in the Vietnamese
language, and only later selected drafts were translated in English for donor input. Looking
back on the I-PRSP process, the WB has commented that it has not yet seen any other document(in the world) which had been produced under full initiative by the government. At the CG
meeting in December 2002, the WB has stated that the Vietnam CPRGS was unusual, globally,in the level of government ownership, backed up by practical steps. Germany has also pointed
out the government’s strong ownership in the CPRGS drafting process in comparison with othercountries with the PRSP initiative. Thus, the CPRGS can be regarded as a result of acountry-driven process. The MPI playing the lead role, the government has set up theinter-ministerial working group with the participation of 16 concerned ministries consisting 50
officials. The working group has been fully committed to the initiative and led this process.
In addition, to show its full ownership, the government renamed PRSP to the “CPRGS”, adding
the terms “comprehensive” and “growth”.
It is often pointed out that the government’s strong ownership in the CPRGS process stems
from following reasons: (1) the government’s relatively high management capacity, (2) the
government’s strong inclination towards keeping out donors’ (excessive) intervention, (3) the
government’s relatively small reliance on the ODA, (4) the government’s strong commitment
towards social equity and poverty reduction, and (5) the government’s former experience in
conducting Participatory Poverty Assessment, compiling its results into the Vietnam
Development Report 2000, “Attacking Poverty”.9

4. Expanding the CPRGS by adding the role of “large-scale infrastructure”
The original CPRGS has discussed the importance of infrastructure to growth and poverty
reduction focusing on “pro-poor” infrastructure provision in four sectors: electricity, transport,
irrigation and information access. To give concrete idea, the contents of the “Enhancing accessto basic infrastructure”, a JBIC led PTF study mentioned previously under <Participatory
approach> (7), illustrates this point clearly. The study has served as inputs to the original
CPRGS formulation which focused on the identification of targets, indicators and costs
associated with essential infrastructure services to poorest communes rather than those that
support the overall economic growth through development of key industries. For example, it
focused on rural transport network, rural electrification and irrigation systems in poorest
communes, village posts and telephone lines etc. Therefore, the original CPRGS could becharacterized as its rather stronger poverty orientation, considering infrastructure from theperspective of “infrastructure provision to the poor in disadvantaged areas” -- thus, the original
CPRGS did not mention “large-scale” infrastructure explicitly.
9 JICA Study on PRSP Process, December, 2004

6

The IMF’s Evaluation Report10 pointed out that the original CPRGS’s emphasis on poverty
reduction relative to growth consideration reflects a perception that the donor community was
the main target audience for the document. As pointed out previously, the CPRGS wasintended to serve as an “action plan” of the existing core documents, never intended to become
an overarching document by replacing the core documents by the Vietnamese government.
Thus, the government initially seemed to have acknowledged the fact that lack of certain
dimension (i.e., the role of large-scale infrastructure serving as engine to growth) in the CPRGS
would be acceptable. In fact, MARD (Ministry of Agriculture and Rural Development)
admitted that issues exist which are integral part of MARD’s program but not covered in the
CPRGS.11 MOH (Ministry of Health) has expressed the same opinion as MARD.12 Vietnam
has its own policy configuration before the introduction of the CPRGS and it has already shown
its strong commitment towards both “economic growth” and “poverty reduction” in its core
documents (i.e., SEDS and SEDP). In other words, Vietnamese government, as a robust action
body with ownership has already confirmed strong commitment to the “economic growth” and“poverty reduction” prior to the elaboration of the CPRGS. Therefore, pro-poor inclination in
the original CPRGS signals the government’s perception that the existing core documents,
rather than the CPRGS, would cover its strong commitment to “growth” dimension.
In the course of producing the I-PRSP, the government has already named the paper in
Vietnamese language that corresponded to the meaning of the CPRGS in English (with theterms “comprehensive” and “growth”). A name “I-PRSP”, however, was used then inconsideration of the WB and the IMF. The vision reflected in the I-PRSP was much morecomprehensive than that set out in the HEPR (Hunger Eradication and Poverty Reduction) Plan,
the government’s existing targeted poverty reduction plan. While the HEPR Plan, prepared
under the MOLISA’s (Ministry of Labor, Invalids and Social Affairs) initiative, covered policies
and projects aiming at reducing poverty focusing on the poor communes and individuals, the
I-PRSP attempted to link poverty reduction to macro-economic consideration. The WB has
acknowledged the fact that the I-PRSP had tried to accommodate macro, structural, sectoral andsocial policies and programs, however, it has also pointed out that there was room for further
improvement in terms of its comprehensiveness.13 Basing on the analysis in the “Vietnam:
Attacking Poverty” report, which had compiled the results of the Participatory Poverty
Assessment, the WB has emphasized that poverty has to be dealt with from many angles, withinvolvement of all parties. However, it did not bring up the importance of the role of thelarge-scale infrastructure at that time.
Subsequently, in the course of preparation of the Full-PRSP, the government renamed the
PRSP to the CPRGS to (1) show its ownership as well as to (2) align its name to the Vietnamesename. However, even with some extent of macro-economic consideration to poverty reduction,
the contents of the original CPRGS was focused too heavily on the poverty reduction aspects inspite of the added term “growth” in its name. Because of its pro-poor focus in the contents, theoriginal CPRGS had inherent difficulty in enhancing alignment with the PIP, which is theofficial document of the Vietnamese government. One of the significant reasons that Japanese
government has made proposal to “expand” the CPRGS by adding the role of large-scale
infrastructure was to remove this bottleneck and to facilitate alignment between the two, namely
policy and expenditure. This discrepancy has been pointed out by Japan prior to the CG
meeting in December 2002, and donors including the WB, France and Germany have shown
their position that would support Japan’s view in their individual discussion with Japan.
10 IMF Independent Evaluation Office Evaluation of PRSPs and the PRGF, Vietnam case study, July 6, 2004
11 Interview was conducted by JICA
12 Interview was conducted by JICA
13 Vietnam 2010: Ensuring the 21st Century, Vietnam Development Report 2001, joint report of WB, ADB and UNDP,

November 29, 2000

7

The government has “expanded” the CPRGS in November 2003, under the approval by thePrime Minister, in the form of a new chapter on the role of large-scale infrastructure in growthand poverty reduction. The CPRGS expansion was proposed by a group of donors including
Japan and the WB at the CG meeting in December 2002. The Vietnamese government agreed
to this initiative (note that major points of the discussion in the CG meeting are elaborated
below).
Since the donor community worldwide was coming back to pay attention to the importance ofthe role of the infrastructure, the Vietnamese government’s efforts in the expansion of the
CPRGS would be considered a spearhead of the worldwide trend. It would also give
substantial influence not only in Vietnam but also in other countries.
<Contents (major points) of the discussion in the CG meeting in December 2002>
Japan’s statement:• Power generation, roads, bridges, ports etc. These major infrastructures contribute topoverty reduction and economic growth in various ways. Without power supply orsmooth transportation, neither vital economic activities nor income generation would
take place -- thus, economic growth and poverty reduction would not be realized. As
recent Vietnam’s experience shows, economic growth is a strong engine to poverty
reduction.
• The CPRGS would be further improved by incorporating the role of large-scale
infrastructure as well as policy measures to achieve economic growth. In other words,
the CPRGS would be considered as an evolving document.
• The necessity of expanding the CPRGS is apparent from the perspective of enhancing thelinkage between the PIP and the CPRGS. Major part of the PIP is related to large-scale
infrastructure, while this was not substantially covered in the original CPRGS. This
made it difficult for the government to “align” the PIP to the CPRGS. The expansion of
the CPRGS is expected to solve this problem to a certain extent.
• Japan would be ready to make intellectual support to assist the government to expand the
CPRGS, as Japan is very much concerned about “how large-scale infrastructure would
contribute to economic growth and poverty reduction”. Japan would like to support thisinitiative in cooperation with other donors.
The WB’s statement:• Poverty reduction cannot be achieved without economic growth and poverty reduction isnecessary to achieve economic growth.
• The CPRGS is a living document and would evolve to include new analytical work andlessons learned through the monitoring information as it becomes available.
• Some gaps, particularly the linkages between large-scale infrastructure, growth andpoverty reduction, could be addressed through new analysis or that could be filled as the
CPRGS is updated.
• Establishing an appropriate and strong linkage between the CPRGS and the PIP is
necessary -- both recurrent and capital expenditures -- to the priorities articulated in the
CPRGS. The PIP is fundamentally about investment choices. The PIP would benefit
greatly from a clear set of criteria for prioritization and screening projects. These
criteria are essential in the task of allocating government resources to key priorities.
Vietnamese government’s (MPI Minister Phuc) response:• The CPRGS is an on-going process and the contents should be updated. Regarding therole of infrastructure, development of roads in commune levels cannot take place without
development of those in provincial levels. Thus, linking large-scale infrastructure and8•

pro-poor infrastructure in the poor areas is vital. In this sense, there is a missing link in
the CPRGS and we must work to include this.
We consider high and sustainable growth as an engine and precondition that creates
resources for poverty reduction. Therefore, to address poverty, first of all, one needs to
pay attention to growth. Once we want to look at growth and poverty reduction, we
need to look at its physical content. Therefore, investment for infrastructuredevelopment constitutes an indivisible part of the CPRGS. As a result, the CPRGS
needs to be further revised on the part to large scale infrastructure…We should add
large-scale infrastructure development to the CPRGS in order to create momentum foreconomic development, with high and sustainable growth. For example, we may add
the building of bridges, roads, highways, ports, power plants, and a power transmission
system that aim at poverty reduction, as I mentioned to you. And I also suggest thatearly next year, when we review the implementation of the CPRGS, we will officiallyamend with a legal document by the government.

Minister Phuc concluded that the CPRGS would be expanded and all the participants in the
CG meeting confirmed the legitimacy of the government’s decision. The government’s
incentive for coming up with this conclusion would be analyzed as follows:(1) Vietnam has its own policy configuration before the introduction of the CPRGS and it has
already shown its strong commitment towards both “economic growth” and “poverty
reduction” in its core documents (i.e., SEDS and SEDP). In other words, Vietnamese
government, as a robust action body with ownership has already confirmed strong
commitment to the “economic growth” and “poverty reduction” prior to the elaboration of
CPRGS.
(2) Debate among donor community(*) regarding the coverage of the CPRGS has been
taking place, and the government has endeavored to make sure the “role of infrastructure”
considering the balance between economic growth and poverty reduction.
(*) France, Germany and Japan considered that the CPRGS was focused too heavily on
the poverty reduction aspects, neglecting growth. Whereas, the WB, DFID andseveral countries within the Like-Minded Donor Group took the position that the
pro-poor orientation of the CPRGS is quite good. The debate among the donors
seemed to have facilitated the government to show its own position towards the issue.
(3) Donor community has repeatedly pointed out the importance of strengthening thealignment between the CPRGS and the PIP. However, critical bottleneck existed as the
CPRGS lacked its provision on the role of the large-scale infrastructure, which the majorpart of the PIP occupies.
(4) There was a shift in the worldwide trend towards perception of the role of theinfrastructure. The WB and the IMF have also revisited the importance of the role ofinfrastructure, which affected the donor community in Vietnam to realize its vital role.
The turning point would be the WB/IMF Annual Meeting held in September 2002, whenboth organizations expressed their increased awareness towards the importance of theinfrastructure on poverty reduction. Three months later, in December 2002 CG meetingin Vietnam, the Vietnamese government announced its intention to expand the CPRGS byadding the role of large-scale infrastructure. The decision made by the Vietnamese
government to add growth-promoting elements into the PRSP was well timed and would
be considered a “spearhead” of the worldwide trend.
(5) There was a strong pressure and incentive on the Vietnamese government side forenhancing competitiveness, particularly improving the climate for investment -- both
domestic and foreign -- as the country aimed at its successful integration into the regional
and world economy. Vietnam intends to fully implement AFTA by 2006 and endeavors
to join the WTO by 2005. The development of the large-scale infrastructure and the9improvement of investment climate have complementary role and would work together topromote robust economic growth.
(6) Concessional loan accounted for around eighty percent in the total ODA to Vietnam, andJapan, WB and ADB was the three major loan provider. As such, the government
needed to show more consideration towards Japan’s position. (Note that the IMF’s
Evaluation Report14 pointed out as follows: “…other international stakeholders saw thegovernment’s decision to include a chapter on “large-scale” infrastructure to have been
motivated by optics related to the need to facilitate closer alignment of Japanese
assistance with the CPRGS (rather than due to a lack of comprehensiveness in the original
document) ”)(7) The change in key personnel took place. MPI Minister Phuc has deep understanding
towards Japan’s development philosophy and aid policy.
(8) The government was competent enough to prepare the additional chapter under its own
initiative in terms of both the contents and the process as it has previously produced
I-PRSP and the original CPRGS. In other words, the government’s strong ownership
existed for the CPRGS expansion initiative as well.
To carry out the conclusion at the CG meeting in December 2002, the MPI as the head of theInter-ministerial Working Group, a team of 19 members, who were senior managers and experts
from relating ministries and agencies, was formed on March 2003. The Working Group has
met several times to discuss the detailed outline of the chapter. Outline draft has also beencommented by relating agencies and donors, and was circulated at local levels for further
feedback. Two workshops were held to get comments from wider stakeholders includinginternational donor community. Several donors (which have been actively involved in
Vietnam’s infrastructure development including Japan) have assisted the government
particularly in the area of conducting analytical framework on how large-scale infrastructure cancontribute to sustainable growth and poverty reduction in the country.
As such, the intellectual inputs to the efforts by the Vietnamese government on the expansionof the CPRGS have been provided within the multi-donor framework, under thegovernment-donor partnership. Various donors including the WB15, the ADB, AusAID16 ,DFID17 and Japan (JBIC) have each made presentation on their analytical studies at the above
workshop, which showed their strong interest and active involvement towards this initiative.
Out of the two analytical studies conducted by Japan: (1) “Linking Economic Growth andPoverty Reduction, Large-Scale Infrastructure in the Context of Vietnam’s CPRGS” by GRIPS
Development Forum, and (2)”Impact Assessment of Transport Infrastructure Projects inNorthern Vietnam”, (1) has served as an “umbrella” study of various inputs made by various
donors. This GRIPS study has focused on three cases on large-scale infrastructure projects inthe transport and power sectors under operation:18• Case Study 1: Improvement of National Highway No.5 and the expansion of the Hai
Phong Port (funded by Japan/JBIC and Taiwan, completed in 2000);• Case Study 2: Construction of the My Thuan Bridge (funded by Australia, completed in2000) and the improvement of National Highway No.1 (co-financed by the WB, theADB, and Japan/JBIC, with the southern Ho Chi Minh City-Can Tho section,
14 IMF Independent Evaluation Office Evaluation of PRSPs and the PRGF, Vietnam case study, July 6, 2004
15 The WB has made presentation on its analytical study, Empirical Assessment of the Public Investment Program

1996-2000
16 AusAID has made presentation on its study, My Thuan Bridge Study
17 DIFD has made presentation on its study, Study of Road Network Impacts on the Poor
18 Linking Economic Growth and Poverty Reduction, Large-Scale Infrastructure in the Context of Vietnam’s CPRGS,

November 2003. GRIPS Development Forum.

10

completed in 1999) and;• Case Study 3: Development of overall power supply capacity and regional
electrification, including the construction of the North-South 500kv transmission line
(financed by the Vietnamese government, completed in 1994).
In addition, the following cases have been analyzed to obtain diverse perspectives on the roleof large-scale infrastructure in poverty reduction and growth.
• Case Study 4: Accessibility and road network, in light of “economic distance” and“connectivity” to markets (based on the UK/DFID experience of rural road projects inHung Yen and Lai Chau provinces);• Case Study 5: Accessibility and road network, in light of access to social service
delivery (based on the experience with the Japan/JICA-supported Reproductive Health
Project in the Nghe An province); and• Case Study 6: Effective demand for highway construction (based onJapan/JBIC-financed National Highway No.18).
As emphasized in the MPI Minister Phuc’s statement at the CG meeting, the new chapter
recognizes the role of large-scale infrastructure as a pre-requisite condition and motivation topromote economic growth and the changes of economic structure which aim to serve
industrialization and modernization. The CPRGS has dully incorporated donors’ analyticalcontribution on “how large-scale infrastructure would contribute to economic growth andpoverty reduction”. That is, the interaction between growth and poverty reduction in threechannels: (1) direct channel, which impacts the poor directly (such as programs for basic health,sanitation, education, and rural roads); (2) market channel, where growth helps the poor via
economic linkages (such as inter-sectoral and inter-regional labor migration, increased demand,
reinvestment through formal, informal and internal finance); and (3) policy channel, which
supplements the market channel and guides the development process toward greater equity(through subsidies, fiscal transfer, public investment, and proper design of trade, investment andfinancial policies and so on).19
The CPRGS has become further comprehensive with the inclusion of the role of large-scale
infrastructure as one of the growth promotion measures. The CPRGS expansion has opened
the prospect of rethinking public investment priorities from the perspective of economic growthand poverty reduction. The new chapter offers the prospect of rethinking PIP, and its place inthe overall planning and budgeting process.

5. Policy measures and policy tools to ensure the effectiveness of infrastructure

investments
The significant achievement of the CPRGS expansion is that the awareness of the importanceof economic growth to poverty reduction was raised and that the vital role of the large-scale
infrastructure was appropriately recognized by the government as well as the donor community.
At the CG meeting in December 2003, when the government presented the CPRGS with theapproved new chapter, donor community congratulated the inclusion of the new chapter. At
the same time, various donors pointed out with one voice that challenges lie ahead sincenecessary policy measures should be properly addressed to maximize the effectiveness of
infrastructure investment.

19

Linking Economic Growth and Poverty Reduction, Large-Scale Infrastructure in the Context of Vietnam’s CPRGS,
November 2003. GRIPS Development Forum. Note that this analytical study has greatly contributed to thegovernment’s CPRGS expansion initiatives as an effective input.

11

The government and the donor community have agreed at the CG meeting that in developing
the next PIP it would be critical to focus on a number of issues:20• Improving efficiency in public investments. Prioritizing public investments should
involve an analysis of their contribution to growth and poverty reduction and there
should be no assumption that all infrastructure projects would necessarily yield positive
returns.
Weak planning, inefficient implementation, corruption, and lack ofevidence-based allocations, all contribute to poor (and worsening) performance. Thisinefficiency diverts resources away from other high priority investments. Thoughlarge-scale infrastructure could play an important role in growth promotion, it would
not necessarily do so if the wrong investments were chosen or if the projects werepoorly conceived or badly-managed.
• Balancing economic and social investment between richer and poorer areas.
• Integrating capital and recurrent expenditures to ensure adequate maintenance of public
infrastructure and the optimum development impact of all public spending.
• Recognizing that often times expenditure on O&M might yield higher returns thaninvestment in new projects.
• Improving access of the poor to infrastructure.
• Observing environmental and social safeguards.
The government had duly anticipated number of policy issues pointed out at the CG meeting
during the drafting process -- thus, the new chapter has identified following important policy
measures to be dealt with along with the physical investment in infrastructure. The following
three important measures have been highlighted in the above-mentioned GRIPS’s study as the
key issues for future strategic planning.
The infrastructure development needs to focus on the “quality” of investment, and not only on
its quantity. In light of significant fiscal implications of infrastructure investments, it isimportant to give due attention to the issues specific to sector policies and project management-- particularly, selection criteria, financing, maintenance, and the regulatory framework for
infrastructure investments and operations. This is essential to ensure the sustainability ofinvestments in large-scale infrastructure. Continued institution building efforts are necessary
to promote the following measures -- covering fiscal and financial aspects, sector policies andproject management:21• Measures to ensure appropriate resource allocation (e.g., selection and allocation
procedures, recurrent financing)• Measures to make inputs into infrastructure effective (e.g., mobilization of diverse
resources, enabling environment & sector policies, the network effect -- maximizing
synergy effects of different levels of infrastructure, effective and transparent project
management that would lead to reducing fiduciary risks, O&M)
• Measures to mitigate possible negative impacts (e.g., appropriate handling of theenvironmental and social impacts, resettlement and compensation)

Support for: (1) institution building and policy reform, (2) developing large-scale
infrastructure projects properly considering pro-poor dimension, and (3) developing
20 The WB’s Summary Statement, the Consultative Group Meeting for Vietnam Hanoi, December 2-3, 2003
21 Linking Economic Growth and Poverty Reduction, Large-Scale Infrastructure in the Context of Vietnam’s CPRGS,

November 2003, GRIPS Development Forum.

12infrastructure projects that directly address poverty reduction in disadvantaged areas, will havemutually reinforcing impacts. Such initiatives will eventually lead to appropriate resource
allocation, bringing benefits of the growth to the poor and assure sustainable growth.
In supporting Vietnam’s development efforts, the Poverty Reduction Support Credit (PRSC)
functions as one of the effective tools to promote its reform program through multilateral policy
dialogue. The PRSC process in Vietnam has become the major framework for policy dialogue
between the government and the international donor community at large.22 It covers overall
policy issues of the reform program being undertaken by the Vietnamese government, including
infrastructure, public financial management, planning process, public administration reform,
governance etc. Taking into account of the current reform progress in Vietnam, important
policy reform agenda related with infrastructure development is addressed under“infrastructure”, “public financial management”, and “planning process” in the policy matrix.
(for specific policy actions identified in the PRSC, see next chapter 6.) Following figure
illustrates the relationship between the evolution of the Vietnam’s Poverty Reduction Strategy(PRS), the specific PRSCs that correspond to each of the PRS, and a shift in the worldwide
trend towards perception of the role of the infrastructure within the donor community.
Figure 4: The evolution of the Vietnam’s PRS with its corresponding PRSCs and theworldwide trend towards perception of the role of the infrastructure
The evolution of the Vietnam’s PRS
November 2003
Expansion of the CPRGS：
Addition of the new chapter on
the
role
of
large-scale
infrastructure
as
growthpromoting measure

May 2002
From PRS to the CPRGS：
Paying close attention to theimportance of growth inpoverty reduction

April 2001
Preparation of the
I-PRSP

Corresponding PRSCs
June 2004
PRSC3
Identified policy issues:
Enhancement of the quality of
public investment• Improve the process of selectionof public investment projects
through enhanced appraisal andevaluation.
• Better coordination of planning of
capital and recurrent expenditure
between MPI and MOF throughMTEFs.

Worldwide trend

Increasedawarenesstowards theimportanceof the role ofthelarge-scale
infrastructure
on poverty
reduction

June 2003
PRSC2
December 2002
PRSC1 (2nd transhe)

June 2001
PRSC1（1st transhe）

Source: Related documents from JBIC
22 Japan has participated in this initiative from the PRSC3, and has pledged to the Vietnamese government a 2 billion

yen co-financing loan on June 2004. This is to be Japan’s first co-financing loan for the PRSC in the world.

13

The PRSC is the essence of the most important milestones for policy agenda which theindividual partnership groups are dealing with in their daily, continuous efforts. Thus,
collaboration with partnership group activities has enabled the PRSC’s operation to constantly
monitor and evaluate Vietnam’s reform program, and provide credit to its achievements.
Following specific efforts, which have been implemented individually, have increased theireffectiveness by the introduction of the PRSC initiative (synergy effects among various policy
tools):• Harmonization of project preparation 23 (leading to better planning process, better
guidelines for feasibility study (F/S), simpler procedures for ODA approval etc.)• Portfolio Review (enhancing project implementation)• Comprehensive Capacity Building Program for ODA management24 (leading to reform
institutional framework of ODA, addressing structural issues etc.)• Amendment of ODA related laws and regulations (improving ODA Decree 17 25 ,Construction and Investment Decree 52/12/7, Procurement Ordinance, Procurement
Decree 88/66 etc.)• Transport Partnership (improving investment efficiency including operation andmaintenance, securing adequate budget, and coordination between capital and recurrent
budget etc.)• Poverty Task Force (improving the quality of PIP, considering project selection criteria,
considering relation between PIP and poverty reduction etc.)

23 Streamlining of project preparation procedures and standards are considered essential to improving Vietnam’s ODA

disbursement rate, while maintaining a high program quality. The five banks (ADB, AFD, JBIC, KfW and WB) andthe government have agreed to work towards establishing capacity, procedures and standards on the Vietnamese sidethat would gradually reduce the need for additional expertise and documentation from the banks with the ultimate
objective to reach a unified process that meets the appraisal requirements of the five banks and the government.
(Source: Harmonization and Alignment for Greater Aid Effectiveness in Vietnam -- Report 2004, Partnership Group for
Aid Effectiveness, December 2004)
24 A comprehensive approach to capacity building was designed and launched during 2004, with financing from LMDG,
and WB/Japan PHRD grant. They key objectives of this Comprehensive Capacity Building Program (CCBP) are to (i)strengthen the legal and institutional framework for ODA management, (ii) develop an overall strategy for ODA project
management capacity building in Vietnam, (iii) provide problem-solving support to ODA projects experiencing
implementation difficulties and (iv) facilitate the introduction and implementation of new aid modalities in Vietnam.
(Source: Harmonization and Alignment for Greater Aid Effectiveness in Vietnam -- Report 2004, Partnership Group for
Aid Effectiveness, December 2004)
25 Decree 17 (issued in May 2001) is the highest-level legal document governing the use and management of ODA
resources in Vietnam. Over the past three years, this Decree has played an important role in strengthening the overall
framework for aid management. However, a number of gaps calling for a revision of the document have been
identified (*). To undertake a revision, an ad-hoc government Inter-Ministerial Task Force has been established andthe government is working on with the draft, making use of inputs provided from the donor community. (Source:
Harmonization and Alignment for Greater Aid Effectiveness in Vietnam -- Report 2004, Partnership Group for Aid
Effectiveness, December 2004)(*) Challenges identified in the existing framework include: (a) inconsistency between this framework and other
ODA-related legal regulations, especially in the are of investment and construction management, (b) insufficient
coverage of a wider range of financing options other than project aid modality; and (c) lack of strong foundation for
promoting donor harmonization and alignment with the government systems and procedures.

14

Box 1: Cases of PRSP in Africa
Looking out for cases in other countries, PRSPs have been widely introduced in many
developing countries including Sub-Sahara Africa since 1999. Unlike the case in Vietnam,
PRSPs have replaced the existing national development plans in most of these counties. And
those PRSPs had more or less the same features such as more focus on poverty reduction
aspects and less so on productive sectors including infrastructure (although both trunk andfeeder road were often recognized as one of the priorities). As PRSPs have become important
documents as part of the strategic information to prepare budget guidelines in those countries,
financial resource was not allocated to a certain policy unless the policy was adopted as one ofthe priority issues. As a result of this trend, more resources have been allocated to social
sectors rather than productive sectors including infrastructure.
To some extent, this prioritization has worked toward enhancing resource utilization underscarce financial envelope and improving alignment of national development plan with priority
sectors’ development plan. However, incentives for the recipient government to improvealignment between these plans have reduced for non priority sectors including infrastructure
because there were little possibility for increased resource allocation for those sectors identified
in the PRSP.
As major portion of the development budget has been financed by donors in most of Sub
Sahara African countries, most of the resources allocated to road sectors, for example, havebeen financed by donors, and not from domestic resources. Even for sectors with their own
strategic plans, the selection of actual projects to be implemented has been very muchinfluenced by financial decision made by the donors. Sector strategic plans themselves remain
to be very weak in infrastructure sector since donors’ decision on financing would reflect thepriority areas for implementation.
Recently, some countries are producing the new version of PRSPs. Efforts have been seen tomeet the alignment challenges. For example, Tanzania’s first PRSP was prepared in 2001 andthe new version of the PRSP is about to be finalized. In the new version, Tanzania government
renamed PRSP to the “National Strategy for Growth and Reduction of Poverty (NSGRP)” witha term “growth”. The NSGRP has given more attention to setting outcome targets (rather thanfocusing on input/output) in various areas including growth aspects. This reform towards
outcome orientation in planning has stimulated related ministries with former non priority
sectors including infrastructure to strengthen alignment between their sector strategies and the
NSGRP. A shift in the planning process from more of an input/output approach to one which
is focused on achieving development outcomes has also encouraged related ministries tostrengthen linkages between well prioritized actions with resources. After the NSGRP is
finalized, related ministries both in social sectors and productive sectors including
infrastructure, are supposed to revise their strategic plans in order to strengthen alignment of
their prioritized actions with the NSGRP.

6. Aligning the CPRGS with the existing National Plans/Strategies
After the approval of the CPRGS, “CPRGS roll out” (implementation of the CPRGS) was
launched in early 2003 in order to facilitate its alignment to the provincial plans and sectoral
strategies. Its goal is to gradually shift the preparation of provincial and sectoral plans andbudgets from a command mentality to an approach based on identifying goals at the local leveland supporting their attainment through reliance on empirical evidence and popular consultation.
15

Currently, there are 20 pilot provinces to integrate the CPRGS process into local and sector
planning under the support by 15 donors. It is expected that by 2008 all 64 provinces will haveswitched to the new approach.
Activities undertaken through this initiative are as follows:• Roll-out of the CPRGS into provincial planning process;• Roll-out of the CPRGS into the sectoral strategies;• Regional Poverty Assessment (RPA).
The Joint Staff Assessment conducted by the WB and the IMF (May, 2002) has addressedfollowing important issues to be considered during the implementation of the CPRGS:(1) Need for raising awareness of the CPRGS within the central government;(2) Need for strengthening the involvement of the local governments towards the
CPRGS process;(3) Need for strengthening the involvement of the sectoral/line ministries towards the
CPRGS process;(4) Need for strengthening the monitoring and evaluation system of the CPRGS;(5) Need for strengthening the linkage between the CPRGS and the resource
allocation.
Among the issues where further improvement is required, donor community has been
continuously pointing out the importance of strengthening the alignment between the CPRGS
and the PIP (i.e., (5) above). Following are the examples of the policy actions identified in the
PRSC initiative (PRSC3) to ensure appropriate resource allocation.
• Improve the process of selection of public investment projects through enhanced
appraisal and evaluation.
Among the weakness of public investment in Vietnam, “how to make resource allocation in
the most appropriate manner” is an issue of great importance. The significance of this issue is
not only for the large-scale infrastructure, but is related to all the development activities ingeneral. Establishing proper, transparent investment selection criteria through enhanced
appraisal and evaluation, and enhanced public participation is vital. In Vietnam, themechanisms to screen eligible capital expenditures are still under development. Selecting
investment projects based on concrete analyses of impacts on each period, each region and eachsector, clearly identifying the beneficiaries and appropriately addressing potential trade-offs
between growth and poverty reduction objectives is urgently needed. Also, the methodology
for estimating future operation and maintenance costs is still insufficiently institutionalized andfuture budgetary implications of each capital investment are not well considered in the projectappraisal stage. Thus, careful appraisal of public projects is becoming crucial, as returns on
new investments can be expected to decline with the accumulation of considerable infrastructure
assets. To keep the quality of infrastructure assets in good operating conditions, maintenancebudgets needs to expand in line with the increasing stock of infrastructure. Currently in
Vietnam, the revision of the related laws and regulations addressing the above issues isunderway and donors are supporting the government’s initiative through various measures.
• Better coordination of planning of capital and recurrent expenditure between MPI and
MOF (Ministry of Finance) through MTEFs.
One of the main weaknesses of the current PIP in Vietnam is that PIP remains basically acompilation of projects submitted by line ministries, provincial governments and General16Corporations (SOEs), without much screening or overall coherence. The disconnection
between capital and recurrent expenditures exists in the budget process, resulting in poor
maintenance and operation of infrastructure. This is due to the insufficient coordination
mechanism between MPI and MOF, compounded by the insufficient integration of planning andspending processes in Vietnam. The integration of these two components of expenditures,
fully taking into account the maintenance implications of infrastructure projects, would be a key
step towards improved planning.
Although Medium-Term Expenditure Framework (MTEF) has not been developed in sectors
related with large-scale infrastructure at the moment, through its introduction, considering
planning and spending of budget process on a longer time horizon, would provide a stronger
foundation for proper consideration of operation and maintenance costs. In Vietnam, there iscurrently a plan to develop MTEFs in 4 sectors that play a direct role in reducing poverty andkeeping development inclusive: education, health, agriculture and transport. Currently, only
the education sector has piloted a “shadow” MTEF, under improved accounting systems andcontrol procedures by MOF. Looking forward, the MTEF pilot is expected to extend to othersectors in the future.
The preparation of the next SEDP (2006-2010) has been on going within the Vietnamese
government.
On September 2004, the Prime Minister approved the Directive(No.33/2004/CT-TTg) in developing the SEDP 2006-2010. The Directive clearly referred tothe incorporation of measures to realize objectives set in the CPRGS and VDGs into the plans,
and requires the renewal of both content and planning measures. Thus, the SEDP 2006-2010 is
expected to contain characteristics of the CPRGS approach (i.e., outcome orientation,
participatory approach, comprehensive approach to pro-poor orientation etc.) in terms of thecontents of the plans as well as the process of forming, implementing and monitoring plans.
As such, the integration of the CPRGS into the SEDP is expected which would facilitate the
CPRGS target achievements as well as lowering transaction cost by putting an end to the “dualsystem”. Thus, the CPRGS will be mainstreamed into the government planning processes andit is presumed that the next round of the CPRGS would not be prepared. Especially, stronger
linkages with sector plans, budget and PIP will be promoted to realize more realistic andfeasible plans. Donors warmly welcome the government’s intention of aligning the CPRGS
with the SEDP and are supporting the government in various ways to contribute to the next
SEDP drafting process. The significant policy and institutional issues related with large-scale
infrastructure investment which have been identified through the CPRGS process are expected
to be reflected in the next SEDP.

7. Main lessons learned and summary of the CPRGS process and the “keyelements” that led the CPRGS expansion to successOne of the most important lessons that can be drawn from the CPRGS process in Vietnam isthat “for a country like Vietnam, whose ownership is unusually strong and has alreadyestablished its robust and effective policy configuration and strategic planning documents,
the priority among development goals should be carefully set, by thoroughly identifying
and respecting the real needs and direction of their socio-economic development.” Main
reason why Vietnam added an infrastructure chapter on the original CPRGS later on isthey had a clear vision on the necessity of infrastructure development in their own
strategic documents, regardless of donors’ preference to large-scale infrastructure(needless to say, certainly, donors had played a catalytic role in facilitating Vietnam’s
decision making). In this sense, what is first and foremost crucial is that donors align its
17

aid with the national priority of the partner country. This can be applied when thepartner country develop PRS as a dual policy. In the case of Vietnam, donors tend to callupon the partner country to develop PRS, in which priority among development goals was
not necessarily coherent with real needs and directions of their socio-economic
development. This means that higher prioritized goal was set for poverty reduction
objectives rather than economic growth aspects as seen in many PRS. As forinfrastructure issue, it is regarded as a lower priority issue than necessary. To avoid thissituation, donors are requested to assess the current situation of socio-economic
development in partner countries and set the priority among development goals through aclose consultation with the partner country.
With regards to meeting the alignment challenge between the original CPRGS and the PIP,
had it not been for the CPRGS expansion, such initiative was unrealistic. Dual system might
have been avoided if the donors had been flexible enough to pay closer attention to theVietnamese government’s own system. One of the motivations for Japan to come up with theproposal to expand the CPRGS was to remove the bottleneck for pursuing alignment between
policy and expenditure, and this statement has been consistent throughout the CPRGS process.
On the other hand, external factor such as the change in worldwide trend towards perception of
the role of the infrastructure has become a big push for advancing Japan’s suggestion -- thisvery fact could be considered as donor driven initiative.
The important lessons drawn from the Vietnam’s experience would lead to the idea of“alignment to government sector strategies” that is: (1) dialogue between the governmentand donors towards the formulation and implementation of strategic development plans toensure donors’ alignment to it, and (2) donors’ alignment with government’s national andsector policies, strategies and priorities are crucial. Ensuring donors’ support togovernment priorities is highly important to support ownership and to improve aid
effectiveness.

18

Figure 1: The overall evolution process of the CPRGS in Vietnam
Vietnamese government’s stances and activities
Dual system：

Donors’ stances and activities
Debate among donors intensified regarding thestatus and the coverage of the CPRGS：• Internally, firmly maintaining theexisting policy configuration• Externally,makingstrongcommitment to the CPRGS• Alignment with the PIP• Worldwide trend on infra.
• WTO Accession etc.

The government endeavored to makesure the “role of infrastructure”
considering the balance between
growth and poverty reduction• The only core document (WB, DFID etc.) v.s.
Supplementary document (France, Germany, Japan)• Focusing on pro-poor objectives (WB, DFID etc.) v.s.
Proper attention on growth aspect necessary (France,
Germany, Japan)

Donors made proposal to expand the CPRGS
by adding a new chapter on the role of thelarge-scale infrastructure.

Agreement made between the government and the donors to expand the CPRGS

Drafted the new chapter under its
strong ownershipIntellectual inputs provided to thegovernment’s initiative

Completion of the new chapter of the CPRGSPRSC and various other policy tools
implemented to ensure effectiveness of
the infrastructure investment

Decided to integrate the CPRGS into
the next SEDP 2006-2010

Drafting the next SEDP 2006-2010
under its strong ownershipIntellectual inputs provided to thegovernment’s drafting of the next
SEDP 2006-2010

Completion of the next SEDP 2006-2010(duly integrating the CPRGS principles) -- expected19

Figure 2: The sequence of the CPRGS expansion process in Vietnam(1) Formulation- legitimization：
Legitimacy and incentive of thegovernment’s decision to expand
the CPRGS(6) Monitoring impact：
Ensuring and monitoring theeffectiveness of the expanded
CPRGS(2) Constituency building：Securing
supporters
andconstituency to implement the
CPRGS expansion process(5) Resource mobilization：
Mobilizing
necessary
resources in moving ahead
with the CPRGS expansion
process(3) Resource accumulation：
Securing necessary resourcesin moving ahead with the
CPRGS expansion process(4) Organizational design：
Formulatingnecessaryorganizational/institutional
system in order to promote the
CPRGS expansion process

Matrix 1: The “key elements” that led the CPRGS expansion process to success(1) Formulation- legitimization：
Legitimacy and incentive of the government’s decision to expand the CPRGS• Vietnam has its own policy configuration before the introduction of the CPRGS and it has
already shown its strong commitment towards both “economic growth” and “poverty
reduction” in its core documents (i.e., SEDS and SEDP). In other words, Vietnamese
government, as a robust action body with ownership has already confirmed strong commitment
to the “economic growth” and “poverty reduction” prior to the elaboration of CPRGS.
• Debate among donor community(*) regarding the coverage of the CPRGS has been taking
place, and the government has endeavored to make sure the “role of infrastructure” considering
the balance between economic growth and poverty reduction.
(*) France, Germany and Japan considered that the CPRGS was focused too heavily on
the poverty reduction aspects, neglecting growth. Whereas, the WB, DFID and several
countries within the Like-Minded Donor Group took the position that the pro-poororientation of the CPRGS is quite good. The debate among the donors seemed to havefacilitated the government to show its own position towards the issue.
• Donor community has repeatedly pointed out the importance of strengthening the alignment
between the CPRGS and the PIP. However, critical bottleneck existed as the CPRGS lacked
its provision on the role of the large-scale infrastructure, which the major part of the PIP
occupies.
20• There was a shift in the worldwide trend towards perception of the role of the infrastructure.
The WB and the IMF have also revisited the importance of the role of infrastructure, which
affected the donor community in Vietnam to realize its vital role. The turning point would be
the WB/IMF Annual Meeting held in September 2002, when both organizations expressed theirincreased awareness towards the importance of the infrastructure on poverty reduction. Threemonths later, in December 2002 CG meeting in Vietnam, the Vietnamese government
announced its intention to expand the CPRGS by adding the role of large-scale infrastructure.
The decision made by the Vietnamese government to add growth-promoting elements into the
PRSP was well timed and would be considered a “spearhead” of the worldwide trend.
• There was a strong pressure and incentive on the Vietnamese government side for enhancing
competitiveness, particularly improving the climate for investment -- both domestic andforeign -- as the country aimed at its successful integration into the regional and world
economy. Vietnam intends to fully implement AFTA by 2006 and endeavors to join the WTO
by 2005. The development of the large-scale infrastructure and the improvement ofinvestment climate have complementary role and would work together to promote robust
economic growth.
• Concessional loan accounted for around eighty percent in the total ODA to Vietnam, andJapan, WB and ADB was the three major loan provider. As such, the government needed toshow more consideration towards Japan’s position. (Note that the IMF’s Evaluation Report26
pointed out as follows: “…other international stakeholders saw the government’s decision to
include a chapter on “large-scale” infrastructure to have been motivated by optics related to theneed to facilitate closer alignment of Japanese assistance with the CPRGS (rather than due to alack of comprehensiveness in the original document) ”)• The change in key personnel took place. MPI Minister Phuc has deep understanding towards
Japan’s development philosophy and aid policy.
• The government was competent enough to prepare the additional chapter under its own
initiative in terms of both the contents and the process as it has previously produced I-PRSP
and the original CPRGS. In other words, the government’s strong ownership existed for the
CPRGS expansion initiative as well.
(2) Constituency building：Securing supporters and constituency to implement the CPRGS expansion process• Support from the related ministries was duly secured under the strong leadership andownership by the government (the Prime Minister’s Office and the MPI). Prime Minister’s
Directive has been issued.
• Support from various donors including the WB, the ADB, AusAID, DFID, Japan etc. has been
expressed.
(3) Resource accumulation：
Securing necessary resources in moving ahead with the CPRGS expansion process• Necessary human resources and funding arrangements have been secured. The Prime
Minister has assigned the MPI as the head of the Inter-ministerial Working Group.
Human resources: The MPI officials and senior managers and experts from relating
ministries and agencies to draft the new chapter have been secured.
Financing arrangements: The PRSP trust fund by the WB, financial assistance from Japanetc. have been secured.
(4) Organizational design：
Formulating necessary organizational/institutional system in order to promote the CPRGS
expansion process• The MPI as the head of the Inter-ministerial Working Group, a team of 19 members, who weresenior managers and experts from relating ministries and agencies, was formed.
26 IMF Independent Evaluation Office Evaluation of PRSPs and the PRGF, Vietnam case study, July 6, 200421

(5) Resource mobilization：
Mobilizing necessary resources in moving ahead with the CPRGS expansion process• The government, on its own initiative and ownership, has led the CPRGS expansion process
and drafted the new chapter. (The Inter-ministerial Working Group has met several times todiscuss the detailed outline of the chapter. Outline draft has also been commented by relating
agencies and donors, and was circulated at local levels for further feedback.)• Two workshops were held to get comments from wider stakeholders including international
donor community. Several donors (which have been actively involved in Vietnam’s
infrastructure development including Japan) have assisted the government particularly in thearea of conducting analytical framework on how large-scale infrastructure can contribute tosustainable growth and poverty reduction in the country.
• Basically, the Poverty Task Force, the government-donor-NGO partnership group has become
the platform of the discussion on the CPRGS expansion issues.
(6) Monitoring impact：
Ensuring and monitoring the effectiveness of the expanded CPRGS• Continuous monitoring of the CPRGS implementation has been going on through the CPRGS
roll out initiative (CPRGS progress report has been produced by the government).
• Following policy tools have been utilized to ensure the effectiveness of the infrastructure
investment:
PRSC initiatives
Harmonization of project preparation (leading to better planning process, better guidelines
for feasibility study (F/S), simpler procedures for ODA approval etc.)
Portfolio Review (enhancing project implementation)
Comprehensive Capacity Building Program for ODA management (leading to reform
institutional framework of ODA, addressing structural issues etc.)
Amendment of ODA related laws and regulations (improving ODA Decree 17,
Construction and Investment Decree 52/12/7, Procurement Ordinance, Procurement
Decree 88/66 etc.)
Transport Partnership (improving investment efficiency including operation andmaintenance, securing adequate budget, and coordination between capital and recurrent
budget etc.)
Poverty Task Force (improving the quality of PIP, considering project selection criteria,
considering relation between PIP and poverty reduction etc.)

22Attachment 1
CPRGS Process in Vietnam∗
Vietnamese government
December, 1999

April, 2000

June, 2000

July, 2000

October, 2000

Donor Community

CG Meeting• Vietnam Development Report 2000: “Attacking Poverty” was presented.
• Poverty Working Group (PWG), a key forum for government, donors and NGOs to debate on poverty reduction strategy, led
the implementation of the Vietnamese version of the Participatory Poverty Assessment (PPA), and compiled its output into the“Attacking Poverty”.
• Poverty Task Force (PTF), the government-donor-NGO partnership group was established by related stakeholders who wereinvolved in the preparation of the “Attacking Poverty”under the framework of PWG.
• The government and the donors agreed to prepare the Comprehensive Poverty Reduction Strategy (CPRS) -- PTF has initiatedits drafting. The CPRS was prepared based on the “Attacking Poverty” report.
★ Based on the agreement among the Vietnamese government, the WB and the IMF, the government has decided to
introduce PRSP in Vietnam.
(Donors involved in the PTF activities have expressed their support to the government’s initiative.)
MPI：drafting of the I-PRSP commenced
PTF：Monthly meetings were held to discuss the structure andcontents of the CPRS・Comments from donors were gathered several times.
・ I-PRSP was produced under the government’s strong PTF：Presentation from the WB and the IMF regarding PRSP.
Discussion among donors on the relationship between PRSP
ownership.
and CPRS activated.
・Donors and NGOs took part in the discussion.
PTF：Workshop held in Sapa.
Following three documents were produced in parallel:
Structure, contents and schedule for CPRS preparation were・I-PRSP・Ten-Year Socio-Economic Development Strategy (2001-2010) discussed.
・Five-Year Socio Economic Development Plan (2001-2005)
PTF：MOLISA made presentation on its draft HEPR (Hunger Eradication and Poverty Reduction) Plan
→Debate intensified among donors and NGOs on the relationship among CPRS, HEPR and PRSP

∗ Source: JICA Study on PRSP Process, December 2004

23

December, 2000

CG Meeting

March, 2001

Final draft of the I-PRSP was presented to the WB and the IMF.
PTF：DFID pointed out the need for localizing the MDGs based★Prime Minister approved the I-PRSP
on the actual situation in Vietnam.
Joint Staff Assessment conducted by the WB and the IMF on
Ninth Party Congress held：
The government presented the Ten-Year Socio-Economic the I-PRSP
Development Strategy (SEDS, 2001-2010) and the Five-Year ★ The WB and IMF Board jointly approval the I-PRSP.
Socio-Economic Development Plan (SEDP, 2001-2005) to theCongress.
★ Preparation of the Full-PRSP commenced after the approval of the I-PRSP.
PTF：the WB and the UNDP made proposal to localize the
MDGs for the preparation of the Full-PRSP. Agreement madeto conduct study for identifying the Vietnam Development
Targets (VDTs).
IMF：Financing through the Poverty Reduction Growth Facility(PRGF) was announced.（U$ 368 mil. for three years）
・MPI was assigned as the head ministry in charge of the WB：Financing though the Poverty Reduction Support Credit
preparation of the Full-PRSP.
(PRSC) was announced.（U$ 250 mil. for two years）
・Inter-Ministerial Working Group was established.
（16 organizations with 50 staffs）
・Poverty unit was established within the related ministries
and agencies.

April, 2001

May, 2001

June, 2001

Draft I-PRSP was presented.

24

July, 2001

PTF：Subgroups within the PTF was formed to support identify
VDGs in the following eight thematic areas:※ Donors in parentheses are the lead donors that supported
each initiative.

The study focused on rural transport
network, rural electrification andirrigation
systemsinpoorestcommunes, village posts and telephonelines etc. rather than those that support
the overall economic growth throughdevelopment of key industries.

(1) Eradicating poverty and hunger (WB);(2) Reducing vulnerability and providing social protection(WB and DFID);(3) Providing quality basic education for all (WB and
DFID);(4) Improving health status and reducing inequalities(ADB and WHO);(5) Ensuring environmental sustainability (UNDP);(6) Promoting ethic minority development (UNDP);(7) Enhancing access to basic infrastructure (JBIC); and,
(8) Ensuring good governance for poverty reduction(ADB).

In the course of producing the I-PRSP, the government has already named the paper in Vietnamese
language that corresponded to the meaning of the CPRGS in English (with the terms “comprehensive”
and “growth”). In the course of preparation of the Full-PRSP, the government renamed the PRSP to the
CPRGS to (1) show its ownership as well as to (2) align its name to the Vietnamese name.
August, 2001

★ The government renamed the Full-PRSP to the CPRGS：
Comprehensive Poverty Reduction and Growth Strategy）
PTF：The government presented the structure of the CPRGS.

25

September, 2001 50 members from the CPRGS Inter-Ministerial Working Group PTF：Workshop held in Hai Phong.
participated in the Workshop.
Based on the draft VDTs report, intensive discussion was held
(Participants from MPI、CIEM、MARD、MOH、MOET、MOT、 among the member of the related ministries/agencies, donors
CEMMA etc.)
and NGOs. The donor community made proposal to set 11
goals and 25 targets as Vietnam Development Goals (VDGs).
October, 2001
Advisory Committee was established to supervise the activities by PTF：Draft VDTs report was distributed.
the CPRGS Inter-Ministerial Working Group.
December, 2001 CG Meeting：・Detailed outline of the CPRGS was presented.
・Out put from the VDTs study was presented.
・”Harmonization of the aid procedures” became one of the agenda for the CG Meeting for the first time.
January, 2002
MPI：The government presented the first CPRGS draft to donors.
The footnote of the draft stated that (1) the purpose of producing
the CPRGS was to obtain access to the WB and the IMF loans,and (2) its status was a general guideline for donors.
(The footnote was later deleted as the CPRGS processproceeded.)January-March, Workshop was held within the country (northern, central and southern areas, respectively) to disseminate and discuss the CPRGS
2002
draft nationwide.
May, 2002★ Prime Minister approved the CPRGS(=Full-PRSP)

26

May, 2002

Mid-term CG Meeting The government presented the approved CPRGS.
The government described the final CPRGS document as an “action plan” that translates the existing National Plans and Strategies-- i.e., the Ten-Year Socio-Economic Development Strategy (2001-2010 SEDS) and the Five-Year Socio-Economic Development
Plan (2001-2005 SEDP).
【The basic views of the related donors towards the status and coverage of the CPRGS】
Status of the CPRGS:• France, Germany and Japan considered the CPRGS as a “supplementary document”• The WB and LMDG donors regarded it as the “highest core document”
Coverage of the CPRGS:• France, Germany and Japan pointed out that it lacked proper attention on the growth aspect.
• The WB and LMDG donors seemed to be satisfied with its strong pro-poor inclination.

June, 2002
July, 2002
August, 2002

The Joint Staff Assessment conducted by the WB and the IMF
addressed following important issues to be considered during theimplementation of the CPRGS:(1) Need for raising awareness of the CPRGS within the central
government;(2) Need for strengthening the involvement of the local
governments towards the CPRGS process;(3) Need for strengthening the involvement of the sectoral/line
ministries towards the CPRGS process;(4) Need for strengthening the monitoring and evaluation
system of the CPRGS;(5) Need for strengthening the linkage between the CPRGS andthe resource allocation
The report on the VDTs study (VDG) was publicized.
★The WB Board approved the CPRGS.
PTF：Discussion held on the implementation issues of the CPRGS.

27

September, 2002 Inter-Ministerial Working Group on the CPRGS implementation WB：Announced at the PTF on the creation of the multi-donor
was established.
trust fund to support the CPRGS implementation.
★ WB, IMF Annual Meeting：shift in perception toward
the role of infrastructure was seen.
・The WB and the IMF admitted in the PRPS progress reportthat the initial PRSP fell short of the analysis on “sources ofgrowth” as well as “policy measures to promote growth”.
・The WB and the IMF reconfirmed the importance of trade assources of growth and poverty reduction and pointed out thatthe trade agenda to be mainstreamed.
October, 2002
The CPRGS Workshop was held in Hai Phong.
Discussion among the government officials, donors and NGOs was held based on the policy matrix of each sector for the
implementation of the CPRGS.
December, 2002

CG Meeting：★ Responding to the proposal made by the Japanese government, agreement was made between the Vietnamese
government and donors to expand the CPRGS by adding a new chapter on the role of large-scale infrastructure.
Vietnamese government’s (MPI Minister Phuc) response:“The CPRGS is an on-going process and the contents should be updated. Regarding the role of infrastructure, development ofroads in commune levels cannot take place without development of those in provincial levels. Thus, linking large-scale
infrastructure and pro-poor infrastructure in the poor areas is vital. In this sense, there is a missing link in the CPRGS and wemust work to include this.”
PIP (2001-2005) completed.

28

January, 2003

March, 2003

May-June, 2003
June, 2003

Inter-Ministerial Working Group established for the CPRGS PTF：Main activities identified for year 2003:
implementation.
• Roll-out of the CPRGS into provincial planning process;• Roll-out of the CPRGS into the sectoral strategies;• Regional Poverty Assessment (RPA)
Donors commenced/conducted following analytical studies for
inputs:• WB: Empirical Assessment of the Public Investment
Program 1996-2000• AusAID: My Thuan Bridge Study• DIFD: Study of Road Network Impacts on the Poor
• Japan: Linking Economic Growth and Poverty Reduction,
Large-Scale Infrastructure in the Context of Vietnam’s
CPRGS, and Impact Study on Northern Infrastructure･With the MPI as a head ministry, Inter-ministerial Working Group was formed to draft the new chapter of the CPRGS･PTF：Discussion on the CPRGS Roll-out was held.
• Roll-out of the CPRGS into provincial planning process;• Roll-out of the CPRGS into the sectoral strategies;• Regional Poverty Assessment (RPA).
PTF：Regional workshop in eight areas was held as part of CPRGS roll-out initiative.
PTF：MPI announced the plan for introducing pilot MTEF in four sectors (education, health, agriculture and transport) to strengthenalignment between the CPRGS and resource allocation.
Mid-term CG Meeting：Intensive discussion took place among participants regarding the CPRGS expansion and the CPRGS
roll-out.
Co-chairs (Vietnamese government and the WB) have both emphasized the importance of the balance between economic growthand poverty reduction. Other donors also supported the statement made by the government and the WB on the balance between
growth and poverty reduction.

August, 2003

PTF：Participatory Poverty Assessment (PPA) based on the results from the VHLSS(2002) conducted (by WB, ADB, JICA,
AusAID, UNDP, DFID, GTZ) -- the output was compiled into the Vietnam Development Report (VDR) “Poverty”.

29

September, 2003 Workshop held on the expansion of the CPRGS.
MPI：Basic framework of the new chapter presented from MPI.

Donors：Presentation on analytical studies made by relateddonors and active discussion took place.
November, 2003 PTF：Second workshop on the expansion of the CPRGS held. (Donors actively commented on the draft new chapter.)
MPI：Presented the latest draft on the new chapter and the draft CPRGS progress report.
December, 2003

★ Prime Minister approved the new chapter of the CPRGSCG Meeting：・New chapter on the CPRGS presented.
・CPRGS progress report presented.
Following issues were identified as future issues to cope with:① Integration of the CPRGS into the next SEDP
② Strengthening the linkage among the CPRGS and resource
allocation and budget management.
③ Promotion of participatory process by local residents in thedecision making process at the local level.

30

Donor community congratulated the inclusion of the newchapter. At the same time, various donors pointed out with
one voice that challenges lie ahead since necessary policy
measures should be properly addressed to maximize theeffectiveness of infrastructure investment.
• Improving efficiency in public investments.
• Balancing economic and social investment between richer
and poorer areas.
• Integrating capital and recurrent expenditures to ensure
adequate maintenance of public infrastructure and the
optimum development impact of all public spending.
• Recognizing that often times expenditure on O&M mightyield higher returns than investment in new projects.
• Improving access of the poor to infrastructure.
• Observing environmental and social safeguards.