|By Shimizu Akira - Chief representative Japan International Cooperation Agency
Thanks to the MPI’s support, JICA’s operation in Vietnam has greatly diversified and strengthened nationwide with JICA’s modalities including technical cooperation, grant aid, ODA, private sector investment, the JICA Partnership Program, and Japanese enterprises’ public-private partnerships in all sectors of the Vietnamese economy.
We have been the largest single-country donor to Vietnam, with accumulated total of ¥2.77 trillion ($26.79 billion) as of date. Through annual joint portfolio review and policy dialogues, in which the MPI is the focal point, many cooperation strategies as well as issues of ODA operation have been constructively discussed and tackled for better ODA operation management.
As a result, a variety of projects in multiple sectors including transport, power, water, healthcare, environment, agriculture, and others have been implemented under the ODA loan model, contributing to the socioeconomic development of Vietnam.
JICA also appreciates the close cooperation and role of the MPI in concluding and realising the Vietnam-Japan Technical Cooperation Agreement in 1998 – a firm base for JICA’s cooperation with Vietnam.
Capacity Development for ODA Project Planning (CDOPP)
Japan’s ODA has been ranked first in terms of the amount among bilateral donors in Vietnam. Recognising the necessity and importance of capacity building for Vietnamese organisations, during 2005-2008, JICA and the MPI implemented the CDOPP, aimed at developing capacity of ODA management among the staff in charge at Vietnamese central and local governments.
The two main activities of CDOPP were the improvement of the working environment for ODA management staff and the enhancement of knowledge on ODA procedures, focusing on Japanese ODA, and basic skills on project formulation.
Foreign investment promotion
Since 2000, JICA’s investment promotion advisors have been continuously dispatched to support the MPI’s Foreign Investment Agency (FIA) to promote investment of Japanese corporations here through facilitating the signing of agreements between the FIA and various cities and prefectures receiving investment promotion missions from Japan, and organising such missions for Vietnamese agencies and enterprises in Japan. The advisors also supported the FIA to develop an investment guidebook for Japanese firms and offer the website of the FIA in Japanese, which are both very helpful in providing relevant information on the investment environment in Vietnam.
Along with supporting the FIA, JICA advisors have also supported dialogues in the Japan-Vietnam Joint Initiative to improve the business environment and supported several provinces such as Vinh Phuc, Haiphong, Thai Binh, Ha Nam, and Ba Ria-Vung Tau in signing MoU with Japanese prefectures and promoting foreign investment in these provinces. Besides this, ODA loans for industrial zones and related basic infrastructures and logistics also contributed to foreign direct investment (FDI) in cities like Hanoi and Ho Chi Minh City. In addition to the dispatch of investment promotion advisors, between 2007 and 2010, JICA also implemented the Technical Cooperation Project Strengthening of FDI Promotion with an aim to strengthen the capacity for effective management and promotion on FDI with the FIA and other authorities.
Small enterprise development
JICA has cooperated with the MPI in developing small- and medium-sized enterprises (SMEs). From 2011 to 2014, JICA implemented one project with a purpose of enabling the MPI’s Agency for Enterprise Development (AED) to be capable of taking the lead in introducing effective and accessible public SME support measures, ensuring the active and continuous participation by relevant central level ministries and agencies.
Following this, the AED was able to strengthen its capacity to work with central level ministries and agencies related to SME development, in particular through piloting the introduction of an SME support measures guidebook.
In addition to this project, JICA and the MPI also worked on Reinforcement of SME TAC Hanoi during 2006-2009. This aimed to facilitate the Enterprises Technical Assistance Centre (TAC) Hanoi to provide services for SMEs in industrial technology and establish strategic foundations that would be the basis for full-scale operations. Thanks to this project, TAC Hanoi’s management and administration has functioned effectively, and capacity of its instructors for technological consultation has been developed.
Last December, the MPI and JICA signed an agreement for the Project for SME Promotion and Industrial Development to be implemented from this month until December 2023. The project aims at improving the connection between local SMEs and global value chains with support mechanisms stipulated by the supporting policies.
Under the framework of this project, local SMEs with high potential to join the global value chains will also receive direct technical support to be able to level up and meet the standards of global industrial buyers
JICA, in cooperation with experts of the Ministry of Economics, Trade, and Industry of Japan, assisted the MPI’s General Statistics Office (GSO) with development of the index of industrial production (IIP) for Vietnam. The cooperation comprised of three phases from 2004 to 2012, with a development study and two technical cooperation projects.
The assistance helped the GSO to change the methodology of industrial statistics from value bases to indexation through the IIP. The change enables more accuracy in calculations, easier adaption to the fast-changing industrial sector, as well as assures international comparability. The IIP avails in both monthly and yearly data and has been officially and widely used since 2011 in reports of the GSO and the government.
JICA signed six loans from 1995 to 2009 to implement small-scale infrastructure projects in rural areas of all provinces in Vietnam. The MPI was the central executing agency coordinating the implementation at provincial levels, and project owners at district levels executed subprojects.
The sectors include irrigation, roadwork, electricity, water supply, and forestation. In total, 1,100 sub-projects were implemented in these sectors, which also include funding non-governmental organisations as partners in rural development activities.
The subprojects focused on remote and mountainous areas where poverty rates are higher than other regions of Vietnam in order to improve economic infrastructure and living standards. Total value of the six sector projects loans amounted to ¥76.3 billion ($733 million).