THE INTEGRATED PROGRAMME FOR VIETNAM

Small and medium enterprises (SMEs) account for over 90 percent of manufacturing employment in Vietnam and contribute an impressive 45 percent of the domestic creation of economic wealth. Operating at relatively low levels of skills and capital, they are also better distributed geographically and must play an instrumental role in spreading more evenly the benefits of growth between rural and urban areas.

With the current stagnation of larger State-owned enterprises and the limited prospects of the cooperative and household sectors, SMEs represent the backbone of future productive capacities in the country. However, they are faced with a host of constraints that severely curtail their contribution to the country’s development efforts and the overarching goal of poverty eradication: a policy and regulatory environment under construction, weak institutional support, inadequate physical infrastructure, inefficient markets for goods, services and factors, low levels of productivity, insufficient investment in technology and skills development, limited exposure to foreign trade, etc.

The Government and the donor community are taking active steps to address these constraints: the Socio-Economic Development Strategy endorsed by the IXth Party Congress brushes a long-term vision of future challenges and opportunities, and charts the course of concerted efforts between Government and foreign partners along the Comprehensive Poverty Reduction and Growth Strategy.

Closer to the particular objective of SMEs promotion, the Government and the Party have produced in recent months two fundamental pieces of policy reform: Decree No. 90/2001/CP-ND of 23 November 2001 “Supporting the Development of SMEs”, followed on 18 March 2002 by Resolution No. 14-NQ/TW of the Party’s Central Executive Committee “Continuation of Renovating Policies and Mechanisms to Promote and Facilitate Private Sector Development” (link to Official Gazette for more updates on current legislative measures)

The cornerstone of the Decree is the establishment of an SME Development Department within the Ministry of Planning and Investment, backed by an SME Development Council and assorted with a web of subsidiary promotion centres underscoring the participatory nature of the scheme. The Resolution for its part aims at erasing persisting distortions against private ownership in business, by a range of policy reforms on land tenure, labour rights, and access to finance, technology and information.

Within this broad framework, UNIDO and the Government of Vietnam have chosen to focus their Integrated Programme of Cooperation 2003-2005 on three key areas, in which UNIDO has been actively involved for many years:

Advisory services under these three broad categories will be delivered through a combination of:

In addition, although not explicitly covered under the Integrated Programme of Cooperation, several concomitant initiatives by UNIDO at regional level will benefit the present exercise, namely:

The unifying theme across these diverse interventions is the sustainable development of entrepreneurship in Vietnam, where sustainable is to be understood in its three dimensions of economic, social and environmental concerns.

The Integrated Programme of Cooperation 2003-2005 proposes a set of tightly interwoven initiatives around the theme. It does not supersede operations under way with UNIDO assistance in the country, nor will its completion mark an end in the history of cooperation with the Government of Vietnam. Simply, it provides a rigorous rationale and close integration for UNIDO’s activities in the country, over the triennium 2003-2005.
A total of ten projects together form the programme that is now endowed, less than half-way into its execution, with a total budget of US$6.2 million (of the planned 8.8 million).