Swiss Development Cooperation in Vietnam
Switzerland and Vietnam are mutually reliable and long-standing partners
Diplomatic relations between the Socialist Republic of Vietnam and the Swiss Confederation commenced in 1971. In 1992, Swiss development activities in Vietnam were initiated. The current development cooperation is based on a bilateral agreement signed in 2002. Vietnam and Switzerland are also long-standing trading partners, with Swiss FDI in Vietnam having reached an accumulated total of USD 2bn by 2012. In addition, there are numerous relations in the fields of education and healthcare, and between communities of the two countries. A number of Swiss NGOs are engaged in Vietnam, mainly in disaster risk reduction and poverty eradication.
Swiss Development Cooperation in Vietnam will continue and shift its focus
Two Swiss government agencies with complementary instruments and programs are active in Vietnam: the Swiss Agency for Development and Cooperation (SDC) of the Federal Department of Foreign Affairs and the State Secretariat of Economic Affairs (SECO) of the Federal Department of Economic Affairs, Education and Research.
The Swiss cooperation program 2013-2016 takes into account the rapid socio-economic development of Vietnam over the past two decades, including Vietnam’s remarkable success in poverty alleviation and its recently achieved middle-income country status, as well as the joint experiences and lessons learned in implementing the cooperation program in the previous period.
For 2013-2016 the Swiss Development Cooperation foresees a robust expansion of its Economic Cooperation and Development programme (SECO) for supporting Vietnam in its effort to attain inclusive and sustainable growth. In order to help in public administration reform and in addressing the persistent pockets of poverty, Switzerland will continue its traditional development cooperation programme (SDC) until 2016, though at a lower level than its Economic Development and Cooperation programme. The financial volume of Swiss Development Cooperation in Vietnam 2013-2016 is budgeted to increase by more than 50% compared to that of the previous four-year period i.e. from CHF 80m to CHF 123m, of which SECO will indicatively disburse CHF 100m and SDC CHF 23m.
In addition, both SECO and SDC are supporting Vietnam through regional and global programs and initiatives.
In the implementation of these programs in Vietnam, Swiss agencies cooperate with ministries, provincial authorities, multilateral organizations, bilateral donors, business partners, international and national NGOs, research institutions and others.
Goals and Strategies of Swiss Development Cooperation in Vietnam
The overriding objective of Switzerland’s international cooperation is sustainable global development that will reduce poverty and global risks.
SECO focuses globally on Economic Development Cooperation aimed at sustainable economic growth in its partner countries by promoting the integration of the partners into the world economy, by strengthening domestic competitiveness and by optimizing global partnership in cooperation.
The SECO Vietnam Country Strategy 2013-2016 provides a new strategic framework which has the following overall goal:
- To support Vietnam in attaining inclusive and sustainable growth that results in higher economic well-being and quality of life by contributing to the economic reform agenda.
SDC focuses globally on reducing poverty, fostering economic self-reliance and rule of law, and helps to find solutions to environmental problems, particularly in lower income countries. The SDC Mekong Region Strategy provides the strategic framework for SDC cooperation in Vietnam in the period 2013-2016 with the following overall goal:
- To support Vietnam in reducing poverty, achieving equitable and sustainable development, and fostering democratic governance.
Fields of Swiss Development Cooperation in Vietnam
- Sound economic framework conditions for macroeconomic management, trade integration and improved business environment
- Increased competiveness of Small and Medium-sized Enterprises (SMEs)
- Environmentally-friendly policies and sustainable production and consumption
- Local governance and citizen participation
- Agriculture and food security
Strategy Period 2013-2016
The Vietnam Country Strategy 2013-2016 provides the new strategic framework for Swiss Economic Cooperation and Development in Vietnam with the following three objectives:
Support sound framework conditions for inclusive and sustainable growth
Maintaining a stable macroeconomic environment, building up strong institutions and promoting sound economic framework conditions for private sector development are paramount.
Switzerland has a tradition of cooperation with Vietnam to strengthen its macroeconomic structure. Switzerland supports Vietnam in its critical policies and structural reforms while also addressing the challenges Vietnam faces in its socio-economic development.
Working in the field of Public Financial Management, SECO seeks to improve transparency in public finances and strengthen accountability of the authorities. It focuses especially on the financial sector, where it supports restructuring and capacity building programs. Furthermore, SECO works in strengthening the development of Vietnam’s private sector e.g. through trade policy and investment support. It focuses on developing targeted regulations to promote both a favorable business environment for SMEs in Vietnam as well as financial inclusion i.e. by making financial services available to disadvantaged parts of society.
Enhance productivity and increase competitiveness of SMEs
Vietnam’s enterprises and their competitiveness face various challenges. The high growth rate which existed in the past was driven by cheap labor and production costs, and has reached its limit. Therefore it is essential to ensure that resources are channeled to more productive and innovative industries, and that the state sector becomes more efficient.
Switzerland provides a wide range of support for this and SECO’s instruments are particularly suited to contributing to enhancing the competitiveness of the Vietnamese economy because they promote a level playing field for the private sector, along with sustainable trade and investment.
SECO focuses especially on the development of SMEs, providing technical and financial assistance to help with: developing trade and value chains; complying with regulations and international business practices (on quality, labor or environmental issues); and improving access to capital and financial services. Capacity building for administrative agencies and private sector organizations is also important in order to lower business costs and to strengthen skills. Another important dimension is to look at developing lasting infrastructure which can support economic activities and business attractiveness in regional growth poles (at city level), and improving the quality of life of residents and workers.
Promote environmentally-friendly policies
The price to pay for Vietnam’s rapid economic expansion is environmental degradation caused by pollution, unsustainable exploitation of natural resources and inefficient energy use. Vietnam is particularly vulnerable to the effects of climate change which adds to the challenge of coping with environmental issues and natural disasters. In order to secure sustainable long-term growth, the government needs to continue its efforts to deal with climate change and promote green growth policies.
SECO will support Vietnam in dealing with environmental challenges, amongst others, through a multi-stakeholder dialogue focusing on addressing climate change and sustainable growth.
In order to more strongly engage the private sector on environmental issues, SECO aims to promote sustainable production and consumption, and supports the government on the implementation of its “Green Growth Strategy ”.
Through infrastructure financing, SECO contributes to improving urban infrastructure with a focus on energy efficiency and renewable energy as well as environmentally-friendly technologies, mainly in waste water and solid waste treatment.
Local governance and citizen participation
Improvements in governance are essential for inclusive and sustainable growth. Citizens need to have their voices heard, participate in shaping policies and public investments, and be able to hold public administration accountable.
Switzerland will contribute to more responsive, transparent, and accountable public administration to the benefit of citizens, who will profit from better quality services.
Switzerland, in cooperation with provincial administrations and civic organizations, will support citizens to plan and help implement communal infrastructure and community service projects. A major aim in this period will be to assure the sustainability of the already developed innovative and transformative approaches and to enable the Vietnamese partner organizations to integrate them into their programs.
Agriculture and food security
Switzerland contributes to helping smallholder women and men farmers to improve their food security and livelihood resilience.
Switzerland continues to contribute to improving the income of poor, mostly ethnic minority, women and men farmers in the northern uplands. The focus is to consolidate successful experiences and to have a larger impact on poverty alleviation at the provincial level.
Promising initiatives to promote value chains will continue to be supported in order to enable smallholder men and women to better access markets for their products and so to increase their income.
The main focus in the final period of bilateral cooperation in this field will be on handing over to the main stakeholders, ensuring sustainability of achievements, integrating successful approaches and methodologies into the government system, and capitalizing on results.
Cross-Cutting Topics and Modalities
The cross-cutting themes for the Swiss cooperation programs in Vietnam are gender equality and good governance, including economic governance.
Switzerland maintains a good mix of partners and modalities in line with the development effectiveness principles agreed on in Busan.
The cooperation modalities include general budget support, project support to provide technical and financial assistance, capacity building at individual, organizational and institutional level, and infrastructure financing.
Switzerland works either through bilateral projects or in collaboration with multilateral organizations, particularly in projects where sharing Swiss expertise or leveraging the comparative advantage of multilateral agencies with grant money is central.
Swiss expertise and field-level experience is shared in the policy dialogue with Vietnamese and international partners.