Vietnam consistently rates poorly in global measures of private sector development. Vietnam is ranked 82nd out of 190 countries in the World Bank's Ease of Doing Business Index and the quality of infrastructure, the business environment and institutions are reported as major constraints to growth. There is an infrastructure backlog and investment needs are beyond current government resources. Many Vietnamese still live in remote and rural areas with limited access to services and markets. Better infrastructure and ongoing economic reform is needed for Vietnam to reduce poverty and reach its ambition of becoming an industrialised country by 2020.
Australia is working with Vietnam to build new and better infrastructure with a focus on the Mekong Delta, the fastest growing region in Vietnam. It is a major source of food production and industrial output. But there are critical supply-side constraints to linking producers and consumers. Our infrastructure investments are opening up opportunities for trade within the Mekong and with the rest of the world. We are helping connect people to essential services such as hospitals and schools. We have contributed through investments that improve local and regional connectivity to services. We continue to provide advice to the Government of Vietnam on ways to encourage private sector funding to building infrastructure.
Under our new phase of support we are helping Vietnam to identify good practice examples, appropriate for the Vietnam context, to assist their economic restructuring. We are working closely with Australian economic institutions to share Australia's experience of increasing competition in the economy and long-term reforms that will improve productivity.
Read more: Enabling and engaging the private sector for development [PDF 176 KB]
Cao Lanh Bridge
$160 million, 2011-2017
Australia is co-financing the design, supervision and construction of the Cao Lanh Bridge across the Mekong River to facilitate trade and economic growth in the region. This bridge is a vital part of a major new road transport link called the Central Mekong Delta Connectivity Project, which will link people and markets in the Mekong Delta to the rest of South-East Asia and beyond. Once finished, the bridge will be two kilometres long, six lanes wide and will sit 37.5 metres above the Mekong River. It will service 170,000 road users a day. The bridge is the largest single Australian aid activity in mainland South-East Asia.
Australia is providing funding for the design and construction supervision for the Cao Lanh Bridge. A strong technical design aiming to mitigate risks has been a focus of Australian support. For example, ensuring the bridge can withstand the impacts of climate change. Social challenges related to increased trade and regional connectivity are also being considered.
Restructuring for a more competitive Vietnam
$3 million, 2014-2017
The project will help relieve key constraints to healthy growth of the private sector (domestic and international), increase Vietnam's competitiveness and promote regional and global trade. It will help strengthen the evidence-base to support economic restructuring in line with Vietnam's emerging commitments under regional and international economic cooperation agreements. The program works by engaging international experts on key policy issues and with a range of stakeholders to build support for reforms. The program also draws on contemporary Australian reform experience and builds institutional links with Australian economic agencies including the Productivity Commission and the Australian Competition and Consumer Commission.
The project works with three key agencies: the Central Institute for Economic Management, the Vietnam Competition Authority and the Institute for Policy and Strategy in Agriculture and Rural Development. Emerging priorities can be addressed through a flexible funding mechanism which can be accessed by a range of additional organisations including the Communist Party Economic Reform Commission and the Economic Committee of the National Assembly.
Australia-World Bank Strategic Partnership (ABP) in Vietnam
$43 million, 2012-2017
The Australia-World Bank Strategic Partnership (ABP) is dedicated to supporting Vietnam's development agenda through technical assistance, capacity building, and analytical work, as well as some investment support, financed by a programmatic trust fund and delivered through a strengthened partnership between the World Bank and DFAT.
ABP's objectives are to: foster an enabling environment in Vietnam for improved economic competitiveness, increased environmental sustainability, and broadened access to economic and social opportunity; and enhance cooperation between Australia and the Bank in working for development effectiveness in Vietnam.