Australia pledges $2.9m for reform project

Tuesday, Aug 12, 2014 09:28

HA NOI (Biz Hub) — Australia will provide up to AU$3.1 million (US$2.9 million) to Viet Nam through an initiative called "Restructuring for a More Competitive Viet Nam (RCV)" meant to help the country in its economic reform efforts.

"Viet Nam urgently needs to restructure its economy and transform its growth models. This project has come at the right time," said deputy minister of Planning and Investment Dang Huy Dong at the project launch workshop yesterday.

The two-year project focuses on enhancing business environment, revamping the rural sector and improving competition policy.

The Central Institute for Economic Management, together with the Institute of Policy and Strategy for Agriculture and Rural Development and Viet Nam Competition Agency, will collaborate in implementing the project.

Improving business

One major goal is to reduce administrative burdens on private sector investment.

"In terms of ease of starting a business, Viet Nam will be able to improve its current ranking of 109th to 60th on the World Bank's report by cutting four more administrative procedures," said Nguyen Dinh Cung, head of the Central Institute for Economic Management (CIEM).

He also said the project would support legal and regulatory reforms, such as revising the laws on Enterprises and Investment and shortening the list of prohibited and conditional business sectors in order to give private businesses more space to grow.

There will be also steps to remove "market distortions" caused by state-owned enterprises, including a proposal of "a fixed state-budget regime" applied to state enterprises.

CIEM, the government's top think tank, takes the position that efficient competition between public and private business requires stripping state companies of their current privileges and exclusive rights.

Adding value to rice

The RVC project also aims to identify barriers to restructuring Viet Nam's agriculture sector with a focus on enhancing the value chain for rice.

Viet Nam exported 3.3 million tonnes of rice in the first half of this year, making $1.49 billion in revenue. The country was the world's second-largest rice exporter after India in the 2012 – 2013 period.

"Rice export volume is high, although its revenue has contributed only 10 per cent to the country's total export turnover of key agricultural products," said Dang Kim Son, head of the Institute of Policy and Strategy for Agriculture and Rural Development.

He said the RVC project would address "institutional bottlenecks" to improve the value chain for rice, from planting and processing to marketing.

The pilot programme will run in the Mekong Delta province of Dong Thap, where paddy farmers will be asked to replace some of their rice land with other crops, apply water-saving irrigation and use more machinery.

Viet Nam has laid out a master plan for economic restructuring to 2020 aimed at improving the quality, effectiveness and competitiveness of the economy.

"Australia stands ready to support Viet Nam in this important reform process," Australian Ambassador Hugh Borrowman said. — VNS

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