Vietnam consistently rates poorly in global measures of private sector development. Vietnam is ranked 78th out of 189 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.
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.
Mekong Transport Infrastructure Development Project
$48 million, 2007-2014
Vietnam’s transport and logistics systems are under strain from a growing population and expanding trade, especially in the Mekong Delta. There are 18 million people in the Delta who rely on just two major routes into Ho Chi Minh City. These two major routes are becoming increasingly congested. Many rural roads and local waterways are in dire need of upgrading. Only 10 per cent of rural roads are paved.
The Central Mekong Transport Infrastructure Development Project is improving access to markets and services for the rural poor by upgrading 194 kilometres of rural roads, including 118 bridges. The project is also upgrading 58 kilometres of feeder canals by widening waterways, reinforcing river banks and providing navigation aids. New wharfs and storage areas are also being built to help farmers get their produce to market. The project is benefiting communities in thirteen provinces. The project has also established a Regional Support Centre to strengthen the technical and management skills of local authorities to improve project preparation and monitoring of construction quality.
This is a World Bank project with an estimated total cost of US$380 million, of which Australia is contributing $48 million.
Southern Coastal Corridor Project
$45 million, 2007-2015
The project will complete the Greater Mekong Sub-region Southern Coastal Corridor—a road of 950 kilometres which runs along the Gulf of Thailand coast from Bangkok through Thailand, Cambodia, and ends at Nam Can in the south of Vietnam.
Australia is funding the road upgrades in Vietnam and Cambodia. In Vietnam, 70 kilometres are being upgraded including parts of national highways 80 and 63. The project will link key economic zones of Vietnam, Cambodia, Thailand and other regional countries, and also reduce travel times and costs for road users.
Australia’s support is also helping to build a new international border crossing as well as implement HIV/AIDS and people trafficking awareness and prevention programs.
An estimated 1.3 million people will benefit from the project once completed.
This is an Asian Development Bank infrastructure project with a total cost of approximately US$329 million, of which Australia is contributing $45 million.
Restructuring for a more competitive Vietnam
$3 million, 2014-2016
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
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.