Saudi Arabia Provides $37M ODA for Rural Infrastructure Projects in Vietnam

The Saudi Arabian government has agreed to provide $37 million in official development assistance (ODA) in two infrastructure projects in two Vietnam’s central provinces of Quang Tri and Phu Yen. This was released at a recent meeting between Minister of Finance Vuong Dinh Hue and Saudi Arabia’s Ambassador to Vietnam, Salah Ahmed Sarhan. Accordingly, the Quang Tri road connecting Thach Kim-Hien Hoa-Lam Thuy-Ben Quan communes will receive investment of $22.6 million in official development assistance (ODA). The road linking the communes of Xuan Phuoc-Ky Lo-Phu Hai in Phu Yen province, in turn, will obtain $14.5 million in ODA. Capital for the two projects is drawn from the Saudi Fund for Development, state media reported. Last November, a representative of the Saudi Fund and the Ministry of Finance signed two agreements, in which the fund provided $14.5 million and $11 million loans to the northern mountainous province of Bac Kan’s general hospital and healthcare centre and the southern province of Ninh Thuan’s vocational training centre respectively. Starting operations in 1975, the Saudi Fund for Development aims to stimulate economic growth in developing nations. It now contributes to the financing of 3,750 projects in 71 countries, consisting of 41 African countries, 25 Asian countries and five countries in other parts of the world. (Vietnam News May 11)

Japan to Grant Vietnam $33M to Develop E-Customs

Japan will grant JPY2.66 billion ($33 million) to help Vietnam build an electronic customs clearance procedure (e-customs) system and implement a one-stop customs system, the General Department of Vietnam Customs said. The move aims to help promote bilateral trade between Vietnam and Japan and create better conditions for foreign investors as well as developing e-customs and implement a one-stop customs system that links Vietnam with other ASEAN countries. The fund will be used to deploy the Vietnam Automated Cargo and Port Consolidated System and Vietnam Customs Information System (VNACCS/VCIS) which is based on Japan’s Nippon Automated Customs Clearance (NACCS). Accordingly, Japan will help Vietnam master the system by training personnel and transferring technology to deploy the VNACCS/VCIS. Japan International Cooperation Agency (JICA) will send experts to help Vietnam establish long-term strategy on information technology and information technology applications, Chief Representative of JICA Tsuno Motonori said. JICA experts will help set up systems of management system, operation and maintenance as well as upgrading information technology appropriately. These experts will also review the legal framework and make necessary adjustments of system to help strengthen the capacity of Vietnam’s customs officers, Tsuno Motonori said. The project will be build in three years and transfer to Vietnam’s customs in 2014. The General Department of Vietnam Customs earlier started an experimental implementation of electronic customs clearance procedure systems (e-Manifest) for inbound and outbound cargo ships for 2012-2014 period. The trial programs will be piloted at four customs departments in Haiphong, Danang, Ho Chi Minh City and Vung Tau and applied for three shipping lines, comprising Maersk Vietnam, OOCL Vietnam and Mitsui OSK Line. (www.customs.gov.vn Mar 22, www.cpv.org.vn Mar 23)

The World Bank approved on Mar. 22 a total of 522 USD million in credit for the development of Vietnam's urban, energy, and forest sectors. Three projects receiving the funds include the Cuu Long ( Mekong ) Delta Region Urban Upgrading Project; the Second Power Sector Reform Development Policy Operation; and the Forest Sector Development Project - Additional Financing. All three projects support the World Bank's new Country Partnership Strategy (2011-2016) for Vietnam, the bank said in a press release. "The approval of the three operations demonstrates the continued strong partnership between Vietnam and the World Bank,” said Victoria Kwakwa, World Bank Country Director for Vietnam. She said these credits help address emerging challenges such as rapid urbanization, the need for an efficient power sector to meet the country’s rapidly growing demand for power to support rapid growth, and the importance of sustainable management of the national forest resources to help move rural communities out of poverty. The Cuu Long (Mekong) Delta Region Urban Upgrading Project will improve infrastructure and services for more than 1.5 million people in the Cuu Long ( Mekong ) Delta cities of Can Tho, My Tho, Cao Lanh, Ca Mau, Rach Gia, and Tra Vinh. The bank's International Development Association (IDA) will fund this project with $292 million. The Second Power Sector Reform Development Policy Operation is one of three policy operations that support the Government in implementing reforms in the power sector to facilitate and promote effective competition in power generation; transparency and predictability in electricity pricing and tariffs; encourage investment in power generation; and implement programs and incentives for efficient use of electricity. For this operation, the Bank provides $200 million, half of which comes from IDA, and the other half from the International Bank for Reconstruction and Development. The Forest Sector Development Project aims to promote sustainable smallholder plantation forestry to help raise rural incomes and support biodiversity conservation across Vietnam 's priority conservation areas. The project supports the National Forestry Strategy through restoring and increasing forest cover, promoting market-based approaches to forestry, increasing roles and responsibilities of local forest owners, strengthening protected areas management and conserving biodiversity with the involvement of local communities. Under the Additional Financing operation, IDA will provide an additional 30 million USD over three years to the project covering six provinces in the central coastal region of Vietnam. (vietnamplus.vn Mar 24) Printer-friendly version Send to friend

The World Bank approved on Mar. 22 a total of 522 USD million in credit for the development of Vietnam's urban, energy, and forest sectors. Three projects receiving the funds include the Cuu Long ( Mekong ) Delta Region Urban Upgrading Project; the Second Power Sector Reform Development Policy Operation; and the Forest Sector Development Project - Additional Financing. All three projects support the World Bank's new Country Partnership Strategy (2011-2016) for Vietnam, the bank said in a press release.

"The approval of the three operations demonstrates the continued strong partnership between Vietnam and the World Bank,” said Victoria Kwakwa, World Bank Country Director for Vietnam.

She said these credits help address emerging challenges such as rapid urbanization, the need for an efficient power sector to meet the country’s rapidly growing demand for power to support rapid growth, and the importance of sustainable management of the national forest resources to help move rural communities out of poverty.

The Cuu Long (Mekong) Delta Region Urban Upgrading Project will improve infrastructure and services for more than 1.5 million people in the Cuu Long ( Mekong ) Delta cities of Can Tho, My Tho, Cao Lanh, Ca Mau, Rach Gia, and Tra Vinh. The bank's International Development Association (IDA) will fund this project with $292 million. The Second Power Sector Reform Development Policy Operation is one of three policy operations that support the Government in implementing reforms in the power sector to facilitate and promote effective competition in power generation; transparency and predictability in electricity pricing and tariffs; encourage investment in power generation; and implement programs and incentives for efficient use of electricity. For this operation, the Bank provides $200 million, half of which comes from IDA, and the other half from the International Bank for Reconstruction and Development. The Forest Sector Development Project aims to promote sustainable smallholder plantation forestry to help raise rural incomes and support biodiversity conservation across Vietnam 's priority conservation areas. The project supports the National Forestry Strategy through restoring and increasing forest cover, promoting market-based approaches to forestry, increasing roles and responsibilities of local forest owners, strengthening protected areas management and conserving biodiversity with the involvement of local communities. Under the Additional Financing operation, IDA will provide an additional 30 million USD over three years to the project covering six provinces in the central coastal region of Vietnam. (vietnamplus.vn)

Examining the Giving Instinct: Philanthropy in Vietnam

The streets of Vietnam’s biggest cities reveal unmistakable signs of wealth. Mercedes and Lexus luxury cars are common, and now and then, you can catch a glimpse of a Bentley or a Maybach gliding along the congested thoroughfares. Vietnamese “new rich” can now access the latest fashion and accessories in designer shops that line the corridors of the country’s expensive hotels.

 

Young couples stroll along Hanoi's Hoan Kiem Lake. In recent years, Vietnam's largest cities are showing greater signs of prosperity. Photo by Karl Grobl.

Conspicuous consumption may be much more visible now in the cities, but a visitor doesn’t have to look too hard or travel too far from the urban areas to see a very different economic reality that exists for most of Vietnam’s 89 million citizens.

Consistent high growth, averaging 7.3 percent this past decade, has brought about a significant drop in Vietnam’s poverty rate, from as high as 75 percent in the mid-1980s to 14.5 percent in 2008. However, these achievements are fragile: the ongoing global economic crisis and the demanding new challenges that a Vietnam in transition now faces – from a weak banking sector and an outdated education system to environmental degradation and a growing rural-urban divide – make it difficult to maintain this pace of growth. Moreover, high inflation and currency devaluation are undermining the poverty reduction effort, pushing many Vietnamese back under the poverty line in just the last few years. And, with Vietnam’s rise to lower-middle-income nation status in 2008, many international and bilateral donors are already announcing their departure to divert funding to lesser-developed regions.

Given the demands on the government’s budget and with decreasing foreign aid expected in the years to come, the long term resources needed to address many of Vietnam’s development challenges will have to also come from domestic sources. Vietnam has a long tradition of philanthropy and community assistance, reflected in such folk sayings as “Whole leaves wrap torn leaves.” But until now, there has not been any systematic research on domestic giving patterns and trends, mechanisms through which people and companies give, or what motivates giving. To help answer these questions, The Asia Foundation recently supported the Vietnam Asia-Pacific Economic Center in Ha Noi to carry out the first-ever assessment of philanthropic giving to identify strengths and weaknesses in current giving practices and inform policy recommendations to strengthen philanthropic giving, both in the business community and among the general public.


When asked, both urban and rural households showed a strong desire in charitable giving, at 51 and 73 percent, respectively. Of the different kinds of charitable giving, people give most to natural disasters, the poor, and religious charities. On average, households give the cash equivalent of roughly $40 a year, which is not an insubstantial sum given per capita income is slightly more than $1,000 a year, and considerably less in many parts of Vietnam, especially in rural areas. We can also see that the potential for increasing contribution is high. Seventy four percent of urban households and 89 percent of rural households said that their current level of contributions was modest, with some 90 percent of households in both urban and rural areas indicating that their contributions have no or only minor impact on the household economy.

Of the charitable contributions made, people by far prefer unofficial giving channels, particularly temples and churches, over official channels such as government agencies, mass organizations like the Fatherland Front, or the work place. In cities, only 37 percent of contributions went through official channels, while in the countryside, this figure drops to 10 percent. When asked why people give, the strongest reason was the desire to share the difficulties of others and the satisfaction received. Following the example set by neighbors is also a significant factor, especially in the countryside. Survey data consistently show that rural residents have stronger interest in giving and participating in charitable activities than their urban counterparts, while some 20 percent of urban residents expressed dissatisfaction with the effectiveness and transparency of charitable activities and the channels of giving currently available to them.

The business portion of the survey also yielded some surprising results, most notably the significant differences in charitable activities between the companies in Ha Noi and Ho Chi Minh City. At the time the survey was conducted, 66 percent of businesses in Ho Chi Minh City reported they were supporting at least one charitable activity, compared to only eight percent in Ha Noi. The level of giving is also markedly different:  businesses in Ho Chi Minh City gave about eight times more than businesses in Ha Noi. In-depth interviews revealed that these differences reflect the higher dynamism of businesses in Ho Chi Minh City in advertising their brands and awareness of corporate social responsibility, as well as a longer-term vision of linking community development with private sector growth.

An additional reason may contribute to the difference in corporate philanthropy between Ha Noi and Ho Chi Minh City: only 32 percent of businesses in Ha Noi believed that charitable activities are effective, compared to 56 percent of businesses in Ho Chi Minh City. Businesses in both cities complained about a lack of transparency, openness, and confidence in how donations are used. Nevertheless, the business survey identifies great potential for increased corporate philanthropy. Seventy eight percent of businesses in Ho Chi Minh City and 55 percent in Ha Noi indicated that their contributions were low or moderate. Corporate success and corporate leadership are key determinants of the charitable activities a business undertakes, but preferential policies such as tax exemption play little or no role in business charitable contribution decisions. When asked about tax concessions for charitable giving, most business representatives were unclear about tax policies or doubtful of the benefits they may bring.

Over all, the research shows that corporate social responsibility is still very nascent in Vietnam and much can be done to increase awareness of philanthropy in the business sector. Despite that, the survey findings shed light on Vietnam’s tremendous capacity for giving in both the general population and the corporate sector – much-needed support to meet the development needs of the country. While the desire to give is high, there is also a great desire for more transparent and effective channels for giving, as well as more professional organizations capable of using the donations to truly reach those in need.

Kim N. B. Ninh is The Asia Foundation’s country representative in Vietnam. She can be reached at kninh@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

From the Field: Vietnamese Anti-Poverty Model May Work Elsewhere

I recently spent a week in Vietnam visiting two successful Vietnamese nonprofits: Thien Chi (TC) and Anh Duong’s (AD). I wanted to explore whether their organizational models were location-specific, or if they—or some aspects of them—could be replicated in other places where we partner with local nonprofits, including Indonesia and Cambodia.

The mission of both of these nonprofits is to raise the most economically deprived families out of poverty within three years, preferably through environmentally sustainable means.

The approach is to provide families with interest-free loans that they repay within five months. Each loan comes with an important support package: a mix of education, advice, and problem-solving tools. Taken together, these efforts produce positive results, and in most cases, go a long way toward ensuring that loans are paid back. Once a loan is repaid, the family is eligible for another. The beauty of this system is that because the loans are short-term, families can start to see the benefits of the program very early on. This is inspiring and keeps the momentum going.

The main strategy is to create alternate sources of income. For example, if the first loan was given to raise chickens, the TC or AD staff might next suggest the family start growing vegetables using a “net house” that reduces the need for expensive chemical fertilizers and pesticides.

A loan recipient in front of her environmentally friendly net greenhouse.

The staff also encourages farmers to adopt environmentally friendly practices, such as using biogas digester systems (fueled by animal waste) for cooking instead of chopping down trees for wood. Both TC and AD use a cash reward system as an incentive for this.

A recently installed biogas system has saved this loan recipient money on buying conventional gas and wood for fuel.

To track impact, a notebook is created for each family. It contains their financial information and is used to record loans and repayments. Each year, the family’s income is noted to see whether the support system is helping. If it isn’t, the staff meets to figure out how best to proceed.

A family with their TC financial-tracking notebook.

These organizations also work very closely with local authorities (they have little choice, given the nature of the political regime). The staff contacts local authorities to determine which families are below the poverty line.

Since TC and AD’s priority is education, they will first approach families with children who are not attending school. The authorities also provide enforcement when people are slow or delinquent in their loan repayments.

All financial activity is recorded in a notebook, and signed off on by the organization, participants, and local authorities.

So, could this sort of model be replicated in other countries? Although tailored to the Vietnamese political and social reality, I feel TC and AD’s model of helping people rise out of poverty has some elements that could work elsewhere.

For example, in Nicaragua, where I spent some time in February, there didn’t seem to be any authority aware of the number of people living in poverty; there was no one keeping track of which families were falling through the cracks. It might be possible to go through various records (medical, school) and piece together that information, but because most rural communities in Nicaragua lack access to health services, such records might not exist. How would one systematically determine which families to help first, and who would enforce authority if necessary? Clearly, there is a cultural difference that might prohibit the same model being used here. However, once a culturally appropriate program was in place, it’s certainly possible to track progress in a notebook.

In Indonesia, which I visited as part of my trip to Asia, it seemed like the practice of tracking progress was seldom exercised. Measuring the impact of programs over time was supported more by anecdotal evidence than hard evidence. The same was true in Cambodia, which I also visited during this trip.

However, the notebook method used by TC and AD could be ideal in both of these countries and in others, as it is cheap, easy to use, and keeps all the records in one location. The loan system with extra support could work too.

These days, more donors and granting institutions want to know the impact of their donations. They often ask those they fund to measure and report results. There are many organizations in the developing world that don’t have the know-how to track their impact so that they can evaluate whether their goals are worth pursuing or if their method is successful. I believe the model used by Thien Chi and Anh Duong is simple enough to adapt to various situations and to other regions.

Source: Standford Social Innovation Review

Corporate Philanthropy on the Rise in Vietnam

LIN Center for Community Development released the report, Corporate Philanthropy in Ho Chi Minh City: An Update on the Status of Giving in Vietnam, in December of 2009. 

I finally had the opportunity to review the report. The findings do not surprise me but it does point out some rising trends in Vietnam. Unfortunately, corporate philanthropy and CSR are relatively new concepts in the region so those that are responsible for implementing strategies, formally or informally, find that they are doing so on an ad hoc basis. 

The laws are changing to encourage corporate giving and with the increasing presence of multi-national corporations in the region, I can see CSR and corporate philanthropy being more institutionalized in the future. Add to this the rising awareness of philanthropy and groups like LIN that are strengthening the infrastructure of nonprofit groups, and you have an enabling environment for corporate philanthropy and CSR to thrive. The nonprofit sector, corporations, and Vietnam still have a long ways to go in their civil society development and the corporate philanthropy and CSR fields are far from mature.

Some interesting findings from the report:

• Corporate philanthropy is on the rise and that the prospects are good for a continuation of this trend in the future.
• A significant number of corporate giving programs are diffuse and appear to lack a clear focus. Corporate philanthropy is implemented with a top-down approach with decisions being made at the highest levels and implementation ed by marketing, PR or HR departments.
• Ad hoc grantmaking was common. Companies prefer to give cash (grants/sponsorship) and in-kind contributions or products or equipment. Employee volunteer programs and pro bono service is a rising trend, especially among foreign companies.
• Corporations are being publicly recognized for their efforts. In 2008, The Saigon Times weekly and The Saigon Times Daily, included the "support for community development and environmental protection" in their criteria when selecting the annual Top 40 Award for foreign-invested enterprises for excellence in business.
• Suggestions to raise the level of effectiveness of corporate philanthropy include the introduction of support services. These include corporate volunteer placement and management services and a community resource center providing information about community needs, giving strategies and best practices.

It was interesting to note in the report, when asked how much their companies gave in 2008, companies were either unable or unwilling to provide a rough estimate.

A couple of sources said that it was company policy not to share this information. Others explained that their budgets for philanthropy come from multiple sources.

Despite this lack of transparency by some companies, contributions of other companies ranged from US$30,000 to nearly $4 million.

The researchers also asked about the concept of a community foundation. Some corporations said they saw a need and value, especially as a resource and facilitator. Others doubted whether the current policy conditions in Vietnam would allow for such an entity to function properly. There were also concerns about the ability of such an organization to operate independently or produce the level of transparency necessary to operate effectively.

The report provides a general sense of where corporate philanthropy is and what is needed to encourage its growth in Vietnam. Until corporations provide reports on their giving and an entity is able to collect and analyze the data, it is difficult to evaluate the amount and impact of corporate giving in Vietnam. For those managing corporate philanthropy programs in Vietnam, they will need to rely on examples and stories from their colleagues on what to do. 

Kudos to LIN for developing this project! Download the full report by clicking here.

Duy-Loan T. Le, Philanthropist and Business Leader

Talking Points Vietnam (TVP), the blog of OneVietnam Network, has a post on Duy-Loan T. Le, philanthropist and business leader.  Duy-Loan came to the U.S. when she was 12. She taught herself how to read English and within four years, graduated as a valedictorian of her high school.  Duy-Loan then joined Texas Instrument and was eventually elected as a Senior Fellow, a rank equivalent of a Senior Vice President.  She is the only women holding this position in Texas Instrument's nearly 80 years of history.

Duy-Loan has received many awards and recognitions, including the National Technologist of the Year, Times People, Asian American Engineer of the Year, Women of Vision: Leadership, and Top 15 Women in Business.

Duy-Loan serves on the board of the Mona Foundation.  She is a founding member and currently serves on the advisory board of the Sunflower Mission.  Sunflower Mission is a U.S. based non-profit that is committed to improving the lives of the people in Vietnam through educational assistance programs. They have built over 62 classrooms in remote areas of Vietnam, where 90% of the poor live. Through the Sunflower Mission Dao-Le Scholarship Program, over 2,200 scholarships have been awarded since 2004.