Several of the U.S. government’s development priorities in Vietnam can be traced back to events that damaged relations between the two countries during the Vietnam War. But the U.S. Agency for International Development is now also looking ahead to what’s next, such as an innovative finance mechanism for forest protection, and supporting the country in adopting a more inclusive, modern health system post-PEPFAR procurement.
Over the past 25 years, Vietnam has undergone a dramatic economic transformation to become a lower-middle-income country, and is lauded worldwide for its remarkable development record. Per capita income has risen from around $100 in the 1980s to about $2,100 in 2015, according to World Bank data. The number of people living in extreme poverty has dropped from about 50 percent in the early 1990s to 3 percent in 2012.
A variety of challenges still threaten the country’s potential for inclusive growth, including corruption and lack of government transparency. Vietnam is an important player in the Global Health Security Agenda given the prevalence of diseases such as rabies and SARS. Climate change, too, poses a threat to the agriculture-dependent country, which is currently recovering from its worst drought in nearly 100 years that affected the livelihoods of nearly 2 million smallholder farmers,
El Niño has subsided and Vietnam is slowly recovering from a devastating drought. But development professionals are still working out how the lower-middle-income country can improve links between humanitarian aid and development assistance, why local politics are crucial in future climate change response, and what role rice will play in the Vietnam of tomorrow.
USAID programs in the country are focused on economic growth and governance, civil society, higher education, health security, social services for vulnerable populations and environment — many of which USAID Vietnam Mission Director Michael Greene feels confident will continue under a new U.S. administration.
“We’ve set a programmatic direction, until we hear otherwise, we continue forward,” he told Devex. “[President-elect Donald] Trump has said that climate change is a hoax, so … so we’ll see what that, for example, if that is going to remain a priority for U.S. government programming.”
Though the mission is waiting to see what changes are in store under the incoming Trump administration, the fact that the U.S. government will likely seek to maintain a strong focus on Southeast Asia for economic and security reasons gives Greene reason for optimism, as does the fact that many of their programs — such as wildlife trafficking, disability programs, dioxin removal and trade programs — have long enjoyed bipartisan support.
Devex recently sat down with Greene in Hanoi to discuss how the U.S. government’s priorities in the country have adapted as Vietnam has risen in the global ranks.
Supporting governance for sustainable growth
Vietnam has made the transition from a relatively isolated command economy to one of export and industrialization — but continued growth requires increased transparency and inclusiveness on the part of the government, Greene said.
To that end, USAID’s Government for Inclusive Growth program, launched in January 2014, focuses on improving the ability of the Vietnamese government to establish successful policy rules and regulations by holding more public consultations between the legislative branch, ministries, private sector and civil society.
Corruption also remains an issue and will be one of the biggest impediments to growth, Greene added. USAID helps address this — and promote business and economic reform — through the Provincial Competitiveness Index in cooperation with the Vietnam Chamber of Commerce and Industry. The report monitors economic and business reform at the provincial level with surveys of over 12,000 domestic and foreign businesses, and it’s quickly become part of the government’s efforts to increase competitiveness countrywide as well as combat corruption.
“I’ve never seen anything like it,” Green said of the success of the index. “Provincial governments now compete on who can get higher rankings on the PCI.”
Promoting health and well-being
If Greene had to choose the most important way USAID’s work has changed in the country, he’d nod to PEPFAR — the U.S. governmental initiative to address the global HIV and AIDS epidemic.
USAID began supporting HIV and AIDS programs in Vietnam in the mid-90s, but funding increased substantially under PEPFAR starting in 2004. Nearly 260,000 Vietnamese are estimated to be infected with HIV, while approximately 115,000 people are receiving the antiretroviral therapy needed to manage it.
USAID has assisted in the development of national policies and institutions to improve program quality and sustainability — and to help Vietnam reach UNAIDS’ ambitious 90-90-90 treatment target to help end the epidemic by 2020.
Meanwhile PEPFAR has officially informed the Vietnamese government that it will transition out of procurement of commodities such as ARV drugs and testing kits by 2018. For the past year USAID has focused on helping the government develop models for centralized procurement and reimbursement of ARVs in preparation for this transition, a mechanism that Prime Minister Nguyen Xuan Phuc in November announced a legal base to support.
“This will be the first country that transitions out of commodity procurement … we’re proud in advance of both the country for managing the transition well, and for the PEPFAR partners AID and [Centers for Disease Control and Prevention] and [Department of Defense] for helping them make this transition,” Greene said.
A USAID co-piloted methadone program that began in 2008 has been adopted by the Vietnamese government and transformed from a two-province model to a nationwide system of nearly 250 methadone distribution sites that serve 50,000 clients. USAID's support in combating highly pathogenic bird flu, meanwhile, has helped reduce the number of outbreaks in Vietnam from almost 2,000 in 2005 to under 50 in 2011, according to the agency.
Prioritizing environment and climate change adaptation
Vietnam is one of the most vulnerable countries in the world to the impact of climate change, with large population centers and key agricultural sectors located in the country’s more than 2,000 miles of coastline. The biologically diverse country is classified as a top priority under USAID’s Biodiversity Policy, and the mission is engaged in three programs to conserve biodiversity, combat wildlife crime and protect the environment.
Midway on its five-year Forests and Deltas program, USAID aims to put into practice the national policies and strategies necessary to respond to climate change and low emissions development — with a focus on reducing emissions from forestry and agriculture sectors and strengthening climate-smart livelihoods.
USAID in October pledged $24 million to help the Quang Nam and Thua Thien Hue provinces protect forests, enhance biodiversity conservation and strengthen communities’ resilience with the Green Anamites project.
In the Mekong region, the mission also supports an innovative sustainable conservation financing mechanism for forest and watershed protection, known as Payments for Environmental Services. Similar to a carbon tax, the objective of PES is to increase financial incentives for environmental protection. As of September 2010, payments totaling $1.8 million were made by hydropower plants, tourism businesses, and the water company in Ho Chi Minh City into a provincial forest protection fund for those who inhabit the forests, as well as for park service forest protection measures.
Advancing the US-Vietnam partnership by addressing legacies
The lingering effects of Agent Orange, while still a source of pain for many Vietnamese and U.S. veterans, are no longer just a bitter reminder of war’s atrocity, but also now a keystone of development cooperation between two former adversaries. A feature by Devex Senior Reporter Michael Igoe.
USAID’s disabilities program lives in the war legacies portfolio as does the dioxin mediation program — or the process of neutralizing soil contaminated by Agent Orange and other toxins the U.S. military used during the war.
“Even though our programs started with humanitarian assistance, essentially the disability program, those programs have continued because it’s an important piece of healing the relationship between the United States and the Vietnamese,” Greene said of how USAID’s programs have adapted over the years to Vietnam’s growth. “It’s been a continuing priority of ours.”
Congress allocated $7 million this year to health and disability programs in Vietnam, much of it presumed to target victims of Agent Orange, although Greene said that’s not necessarily the case: “Although some people call [USAID disability programming] linked to Agent Orange, they really are not, they’re targeted to disabled people in general,” he said.
USAID’s focus on disability programming has transitioned from service delivery to policy advocacy in recent years to ensure the government is creating inclusive disability policies. Vietnam in 2014 joined the U.N. Convention on Rights of Persons with Disabilities, and USAID is now supporting the government in meeting responsibilities under those directives. The mission plans to move into occupational therapy in the next phase of assistance — namely in establishing occupational therapy programs in local universities.
The cleanup of dioxin “hotspots” — areas with high dioxin concentrations in soil and sediment leftover decades after Agent Orange and other harmful herbicides were handled during the Vietnam War — continues.
The $110 million Danang Airbase cleanup — which involves digging up and treating 90,000 cubic meters of contaminated soil — is officially halfway complete, Greene told Devex. The land, which must now be heated to more than 600 degrees Fahrenheit to neutralize leftover contaminants, will be returned to the Danang Airport Authority in order to build the VIP terminal for the Asia-Pacific Economic Cooperation Summit in 2017.
USAID is now in talks with Vietnam about what’s next: The biggest Agent Orange storage site, the Bien Hoa air base near Ho Chi Minh City, where cleanup could cost $250 million and take more than a decade.
President Barack Obama during his May 2016 visit to Vietnam committed in his speech to making a “significant contribution” to the clean up, but a new administration leaves question marks: “We’ve told the Vietnamese it’s unclear yet how much money we have toward that,” Greene said.
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