Infrastructure investment to aid the social recovery

Shimizu Akira - Chief representative Japan International Cooperation Agency

After almost two years of dealing with the COVID-19 pandemic, Vietnam has entered the stage of economic recovery. Public investment will play a crucial role in creating momentum for economic development. In addition, public investment can also be a catalyst for the growth of the private sector. Investing in infrastructure, especially green infrastructure, is extremely important.

From early 2020, the Japan International Cooperation Agency’s (JICA) support priorities for Vietnam have been focusing on dealing with the pandemic and economic recovery, which afterwards aligns to the Vietnamese government’s policy of balancing between pandemic prevention and economic development.

In terms of this infrastructure development, up to now, about 70 per cent of Vietnam’s national highways have been renovated and nearly 10 per cent of electricity output is produced through JICA’s cooperation projects.

Strengthened cooperation

Japan’s official development assistance (ODA) has supported the construction of many socioeconomic infrastructure projects, such as road systems with a total length of about 3,000km; five international ports; several power plants; water supply and drainage system; and the railway system. The infrastructure development project enhances transport connectivity among the localities and helps strengthen ASEAN connectivity and goods supply chain, and allows people to travel smoothly, responding to the rapid economic growth and population growth.

Investing in a complete socioeconomic infrastructure not only brings a more convenient lifestyle but also contributes to the development of localities, narrows the development gap among regions, and creates favourable conditions for the investment and business environment. Therefore, the Vietnamese government focuses on perfecting infrastructure to attract more foreign-invested enterprises (FIEs), such as transport systems, power supply systems for industrial zones, logistics networks, and distribution networks of import and export goods, among others.

So far, FIEs have mainly focused on large cities and their neighbouring localities. However, Japanese ODA has been focusing on infrastructure development toward the cities and towns under provinces and other localities, for better livelihoods for people in rural and remote areas. For instance, for a long time, we have been supporting the transport sector loan, which helped to develop 242 bridges in rural areas.

Currently, the Urban Railway Line No.1 in Ho Chi Minh City is being built with Japan’s ODA. At the project site, there are always thousands of workers involved. Thus, it can be seen that public investment projects not only promote economic development but also create meaningful results that bring many jobs to workers, especially during this tough period.

In addition, the development of socioeconomic infrastructure must always be associated with environmental protection and the people’s interests. The urban railway construction projects conducted by JICA all have gone through research and assessment, proving that its positive effects in reducing greenhouse gas emissions from traffic when the number of private vehicles is reduced as people switch to public transport.

The world now is attaching great importance to the implementation of the UN’s Sustainable Development Goals and environmental, social, and governance standards. FIEs, in particular, emphasise the importance of the environment and whether or not their business can ensure those factors. In this aspect, we also are very much aware that our cooperation in Vietnam will be aligned with the new commitment of the country becoming carbon neutral by 2050.

One of the typical projects on renewable energy development with JICA’s participation in the onshore wind power project in the central province of Quang Tri to promote clean energy supply towards carbon neutrality. We are also working on solar power plant projects which contribute to the energy transition to greener energy in Vietnam.

Human resource development

There is no doubt that infrastructure development is important to economic development, but economic development cannot be achieved by infrastructure development alone. Attracting FIEs to invest in the areas is also as much as important. In this sense, the development of local human resources (HR) is also an issue of great concern to JICA.

We often hear a lot about the lack of HR at the management level, which is a HR capable of bringing together people with the necessary expertise, knowledge, experience, and planning to do the job. Many Japanese enterprises have more difficulty securing a management team in Vietnam than in some other ASEAN countries.

It is not enough to only develop infrastructure. It is important to train HR to manage and maintain appropriate infrastructure and manage staff in the enterprises. Managers are the support team for the socioeconomic development of Vietnam in the future.

Along with hard cooperation in the likes of building infrastructure, JICA also focuses on soft cooperation projects such as technical cooperation and HR training, and this adds to the uniqueness of Japanese ODA and JICA’s activities. More than 27,000 students have participated in JICA’s HR development training courses. In addition, besides the project to train high-quality HR through enhancing higher education such as the cooperation project with Vietnam-Japan University, JICA will continue to implement comprehensive industrial HR training projects by enhancing the capacity of skilled workers and technical interns.

Also, JICA is implementing projects in digital transformation such as network security and digitalisation, contributing to the National Digital Transformation Programme promoted by the Vietnamese government. Besides that, JICA is also conducting research on a number of financial cooperation programmes to help the Vietnamese government implement pandemic support policies.

JICA will continue making more efforts to contribute to Vietnam’s development through technical and financial cooperation, as well as further promote the connection among people through technology transfer in the form of appointing experts, and training, contributing to consolidating the friendly relationship between the two countries.