Vietnam-Japan strategic partnership for peace and wealth

09:01 | 28/03/2018 Cooperation

(VEN) - Vietnam Economic News’ Thanh Ngoc spoke with Fujita Yasuo, Chief Representative of the JICA Vietnam Office.

vietnam japan strategic partnership for peace and wealth

How has the Japan International Cooperation Agency (JICA) contributed to the realization/development of strategic partnership for peace and wealth between Vietnam and Japan?

The Extensive Strategic Partnership for Peace and Prosperity in Asia agreed in March 2014 covers a variety of areas - politics, economy, society, culture, etc. JICA has been contributing to the realization and development of this relation through implementing Japan’s Official Development Assistance (ODA) to Vietnam.

JICA has been supporting Vietnam in achieving sustainable growth with its national target to be a “modern industrialized nation” in line with the Socio-Economic Development Strategy (2011- 2020) and the Five Year Plan (2016- 2020) of Vietnam. The current development assistance strategy of the Japanese government for Vietnam stipulates the following three pillars:

Pillar 1: Promotion of economic growth and strengthening of international competitiveness For fast and sustainable economic growth of Vietnam in the global market, JICA has been helping Vietnam address, particularly, the following challenges: stabilizing macro economy and structural reforms; strengthening of competitiveness of industries and human resources development; and development of high- quality infrastructure including transport, and power supply.

Pillar 2: Strengthening of resilience JICA has been assisting Vietnam in solving social and environmental problems through Infrastructure development for basic human needs, agriculture and rural development, improvement of health services, disaster prevention, environmental management, mitigation of and adaptation to climate change, etc.

Pillar 3: Good governance For enhancing governance, JICA has been helping Vietnam in legal and judiciary reforms, strengthening of administrative functions and capacity, enhancing functions of National Assembly, capacity development of media, etc. JICA’s projects are in the form of ODA loan, grant assistance, technical cooperation, training, and dispatch of experts and volunteers. JICA uses Japanese experiences, technologies and know-hows whenever possible and appropriate. JICA is also increasingly involving Japanese private firms, local governments, universities and civil society in cooperation projects. JICA’s cooperation has been contributing to the partnership in many areas, such as strengthened trust and friendship between Vietnamese and Japanese, and expanded bilateral economic relation including Japanese companies’ investment in Vietnam.

Besides achievements, Vietnam is also facing difficulties and challenges in socioeconomic development. In this condition, what kind of cooperation JICA will focus on to help Vietnam overcome challenges for sustainable development?

Despite remarkable achievements in socioeconomic development over the years, Vietnam still faces various challenges. Here, I would like to highlight the following three issues and JICA’s cooperation.

Sustainability of economic growth with equity: While high economic growth has been sustained for long, the growth rate is in declining trend. Concern over “middle income trap” is often pointed out. Main drivers of the past economic growth are capital investment, cheap labor input and exploitation of natural resources. The contribution of total factor productivity to the growth was negative or marginal over the last 10 years. Because the growth drivers mentioned above cannot be sustained, a new growth model is called for. Key solutions would include, among others, improvement of productivity (presently below 50 percent of Thailand and Indonesia) and innovation.

JICA has been providing a variety of cooperation. I mention only a few. First is support to establishing a private sector-led economy through improvement of investment climate, infrastructure development, and reform of SOEs whose share in GDP is still around 30 percent. Second is human resources development, particularly in higher education, skills and vocational trainings; and, the graduates are expected to be leaders for innovation and high productivity labors. Third is development of small and medium enterprises that are expected to be more efficient in their business and have more linkage with foreign companies. Fourth is development of the agriculture sector whose potential to grow is large but productivity is stagnant.

Urban congestion and environmental degradation: Urbanization – concentration of business and people in urban areas - has been one of factors of high economic growth of Vietnam. However, urban congestion has caused serious inefficiencies including traffic jams, high housing cost, etc. due to insufficient urban planning and management. One of solutions supported by JICA, based on Japanese experiences, is the development of efficient public transport system including Ho Chi Minh City urban railway line 1.

Climate change: Climate change causes more frequent extreme weathers such as tropical cyclone, territorial rain and draught. JICA has been proving cooperation for adaptation and mitigation measures for climate change in addition to support to policy formulation and enforcement.

For adaptation, JICA’s water environment improvement projects in large cities including Ho Chi Minh City and Hanoi construct drainage facilities to protect cities and people from flood damage. The Ben Tre Water Management Project in the Mekong Delta started in 2017 to protect agriculture from salinity intrusion during the dry season.

For mitigation, a technical cooperation project assists Vietnam in identifying low carbon emission technologies, and Ho Chi Minh City build its capacity for effective monitoring of greenhouse gas emissions. In addition, needless to say, high quality transport infrastructure supported by JICA contributes to mitigation of climate change.

As you have been together with the government of Vietnam and Vietnamese people working on our socio-economic development for the past time, could you please share your thoughts on the country and its people?

Vietnam has great potential for socioeconomic development in the world. The high economic growth rate has been sustained, and it was 6.81 percent in 2017. Thanks to political, social and economic stability and large growth potential, together with economic liberalization, Vietnam has been attracting foreign direct investment from overseas including Japan. In order to fully realize the potential, however, Vietnam needs to tackle development challenges, particularly relating to business environment, institutional reforms, human resources development, infrastructure, productivity and competiveness, urban congestion, environmental pollution, etc. There are also underdeveloped sectors, such as agriculture and tourism. JICA is prepared to help the Vietnamese government address these problems.

Recently, the relation between Vietnam and Japan has been strengthened and deepened in many areas. I am pleased that more Vietnamese people are interested in Japan and Japanese people. I often hear, from JICA project staff and volunteers and Japanese businessmen, that many Vietnamese people are enthusiastic in learning new knowledge, and hard working for their better living. Year 2018 is 45th anniversary of the establishment of the diplomatic relation between the two countries. Through Japanese ODA, JICA would like to contribute to enhancing the good bilateral relation, and better understanding between Vietnamese and Japanese people.

Thanh Ngoc