Overview of Australia's aid program to Vietnam

How we are helping

2014/15 Bilateral Outcome
$116.9 million

2015/16 Bilateral Budget Estimate
$58.4 million

2015/16 Total Australian ODA Estimate
$89.6 million

The Australian Government will provide an estimated $89.6 million in total ODA to Vietnam in 2015-16. This will include an estimated $58.4 million in bilateral funding to Vietnam managed by DFAT.

Australia and Vietnam’s partnership extends across political, security, economic and people-to-people activities. Australians born in Vietnam represent the fifth largest migrant community in Australia, and around 24,000 Vietnamese students enrol in education institutions in Australia each year. Vietnam is one of our fastest growing trade partners, and is central to regional security in South East Asia. The country’s further development as a strong trade and investment partner is vital to our national interest and the region’s prosperity.

Vietnam experienced remarkably rapid economic growth in the past two decades. However, there are constraints to continued growth.  Businesses are constrained by the lack of a skilled workforce and private sector growth is constrained by poor infrastructure and an uncertain policy environment. Inequality is a continuing challenge, with 15 million people living below the national poverty line. Gender disparities still exist and Vietnam is one of few countries in which the gender pay gap has widened over the last decade. Ethnic minorities have still not benefitted equally from economic growth – although they comprise just 15 per cent of the population, they account for around half of those living in poverty.

Vietnam’s Socio Economic Development Strategy (SEDS) 2011-20 provides the country’s overarching policy for responding to these challenges. It sets three high priorities – improving market institutions, promoting human resources, and infrastructure development – and highlights the need for a combination of structural reforms, macroeconomic stability, environmental sustainability, and social equity.

Australia’s commitment to development cooperation with Vietnam is ongoing. Reflecting our maturing economic partnership, we will continue to leverage Vietnam’s significant domestic resources and foreign investment, and support Vietnam’s efforts to enter a new phase of economic development. By helping to stimulate the private sector, upskill the workforce, and support inclusive growth, we will contribute to achieving our shared, overarching goal of promoting prosperity and reducing poverty in Vietnam.

Our program is organised around the following three mutually reinforcing objectives as outlined in the Aid Investment Plan 2015-20.

Objective 1: Enabling and engaging the private sector for development

Improving market institutions and infrastructure is essential to Vietnam’s ongoing development. Australia is helping Vietnam’s Ministry of Transport prepare high-quality projects that address transport infrastructure gaps, prioritizing a small number of infrastructure investments that promote the benefits of new engineering or contracting approaches for improved efficiency. We are also providing support to increase women’s engagement in a largely male-dominated sector.

We are supporting economic reform by drawing on international experience in areas such as competition policy to help level the playing field for the private sector. We will help identify innovative approaches that improve firms’ access to finance by reducing the cost of credit and build their capacity.

Investments for enabling and engaging the private sector for development

Objective 2: Assisting the development and employment of a highly-skilled workforce

A skilled workforce that is harnessed by successful business will assist Vietnam to move into a new phase of growth and invest in innovation, ensuring that domestic industries can remain competitive. Australia will support Vietnam in its efforts to develop a skilled workforce by engaging with the private sector to ensure training meets industry’s needs.

Our Australia Awards Scholarships continue to promote Vietnam’s human development, with an increased focus on targeting skills development and workplace productivity in priority sectors. We will promote participation among women, people with disability and members of ethnic minorities.

Investments for assisting the development and employment of a highly-skilled workforce

Objective 3: Promoting women’s economic empowerment, including ethnic minorities

Empowering women to participate actively in the economy is critical to reducing poverty and building a sustainable economy. Our assistance is supporting women’s economic empowerment by: promoting opportunities for women in the formal sector, and the expansion of women-led small to medium enterprises, contributing to more inclusive economic growth; and helping to close the gender gap in economic livelihoods in some of Vietnam’s poor and remote communities.

Investments for promoting women’s economic empowerment, including ethnic minorities

Our results

  • In 2014, 185 conditional Australia Awards Scholarships were provided to Vietnamese citizens (62 per cent to women).
  • The Cao Lanh Bridge connectivity project—Australia’s largest single aid activity in mainland Southeast Asia—remains on schedule for completion by 2017, and will create significant economic efficiencies in the Long Xuyen City region through improved transport efficiency.
  • In 2014–15 nearly 2000 people were trained in trade policy
  • In 2014-15 an additional 64,500 people were able to access clean water
  • The Economic Diplomacy Fund, launched by our embassy in Hanoi, supported projects promoting private sector linkages in the water sector (DFAT); women in police leadership training (AFP); food safety awareness, and aviation safety (Austrade).

Our changing program

Our changing aid program in Vietnam reflects the priority areas of the Vietnamese Government - improving market institutions, promoting human resources, and infrastructure development - and areas where Australia is best positioned to support Vietnam’s continued economic development.  Following the release of the 2015-16 aid budget and consultations with program partners, we have consolidated investments to focus on three main areas - enabling and engaging the private sector for development, assisting the development and employment of a highly-skilled workforce, promoting women’s economic empowerment, including ethnic minorities. 

We will reduce our contribution to the World Bank Multi-sector Trust Fund (2012-16). Although we will not renew several standalone investments, we will integrate human rights, climate change, disaster risk reduction and anti-corruption across all our programs. We will shift our existing ten-year engagement with the Government of Vietnam on water and sanitation toward an approach that leverages private sector investment. Whilst the number of Australia Awards Scholarships will be scaled back from 140 to 100 for the 2016 intake, we will introduce greater flexibility to support targeted short course awards. Our small scale involvement in health will conclude by the end of 2015.

A teacher speaking to students
Hospitality students at KOTO (Know One Teach One) in Ho Chi Min City, Vietnam. KOTO is a not-for-profit restaurant and vocational training programme which is changing the lives of street and disadvantaged youth in Vietnam (credit: DFAT).