Ha Noi, 12 September 2018 - Accelerating the development of Viet Nam’s private sector and expanding domestic private finance are  key priorities  for the country to meet the financial requirements to achieve the Sustainable Development Goals (SDGs).

This is a key recommendation of the Development Finance Assessment Report: “Financing Sustainable Development in Viet Nam” launched today in Ha Noi by the United Nations Development Programme (UNDP) in partnership with the Ministry of Planning and Investment (MPI).

The launch featured key representatives from the Government of Viet Nam, business sector, academia, international development partners and media. Director of UNDP’s Regional Bureau for Asia and the Pacific Mr. Haoliang Xu, who is visiting Viet Nam to participate in the World Economic Forum, and MPI Deputy Minister Mr. Le Quang Manh attended the Launch.

Through the lens of the Integrated National Financing Framework (INFF), the report analyzes the composition, characteristics and trends of Viet Nam's development finance and development investment resources, with comparisons to other largely ASEAN region countries.

The report provides an overview of the changing development finance landscape in Viet Nam, characterized by high Foreign Direct Investment (FDI) and remittance inflows that contrast with declining ODA and slowly rising government revenue insufficient to sustain the high level of public investment needed to meet increasing spending obligations with climing public debt.

Mr. Haoliang Xu said the Development Finance Assessment Report highlighted the rapidly changing development finance landscape in Viet Nam. However, he noted that “While the volume of domestic private investment in 2015 has doubled since 2002, its share of total development finance, of around 40%, and per capita domestic private investment - US$490 in 2015 compared to the ASEAN average of US$690 - are amongst the lowest in the ASEAN region”. 

In response to the report’s findings, Mr. Haoliang Xu called for urgent actions that include incentives for increasing domestic private investment; public investment crowding in private investment; attraction of FDI that helps solidify domestic firms’ linkages with global value chains; enhanced tax collection, state asset management and introduction of property and environmental taxes; as well as progress towards an integrated national financing framework for SDGs.

He reaffirmed UNDP’s readiness to partner with Viet Nam in effective financing for SDGs, especially enhancing synergies of all finances (public, private, national and international) and maximizing their contributions to SDG outcomes.

The report also underlines the need to support Vietnamese private enterprises to grow in size, productivity, competitiveness and formality. It recommends enhancing coordination between central and local governments, and moving away from using tax incentives to attract FDI to: (i) improving infrastructure, (ii) creating an enabling business environment and (iii) equipping workers with 21 Century skills.

Link to full report: http://www.vn.undp.org/content/vietnam/en/home/library/poverty/DFA.html

For more information, please contact:

Nguyen Viet Lan, UNDP Communication Analyst, Email: nguyen.viet.lan@undp.org, phone: 84-24-38500158