Vietnam has been in transition from an agrarian, centrally-planned economy to an industrialised, market-based economy since the late 1980s. Rapid economic growth since the early 1990s lifted more than 35 million people out of poverty, spectacularly reducing its poverty rate from 58% in 1993 to around 10% in 2010. It joined the World Trade Organization in 2007, and achieved lower middle-income status (GDP per capita AUD 1800) in 2010. Vietnam’s young and increasingly wealthy population of around 90 million and favourable geography, notably proximity to growth engines in the region, give it has significant long-term potential.
There are obstacles to continued growth. The lack of a skilled workforce limits businesses, and poor infrastructure and an uncertain policy environment limit private sector growth. Inequality is a continuing challenge; 15 million people live below the national poverty line. Gender disparities still exist, and Vietnam is one of few countries where the gender pay gap has widened over the last decade. Ethnic minorities have still not benefitted equally from economic growth. Although they comprise just 15% of the population, they account for around half of those living in poverty.
Vietnam is the world’s second largest coffee producer (after Brazil) and third largest rice exporter (after India and Thailand). Agriculture remains a key source of national income and employs more than half the workforce. Many Vietnamese live in low-lying deltas, and Vietnam is one of the most vulnerable countries to climate change, including rising sea levels. Food safety is a big concern, and safe production by organic farming is increasing throughout the country. One reason is that export goods must meet higher demands on quality.
Vietnam is one of Australia’s fastest growing trade partners, and is central to regional security in South East Asia. The country’s further development as a strong trade and investment partner is vital to our national interest and the region’s prosperity.
Vietnam is committed to global economic integration and trade liberalisation through participation in APEC (which it will host in 2017), the ASEAN Free Trade Area, the WTO and a growing network of free trade agreements, including the ASEAN–Australia–New Zealand FTA (AANZFTA). It is also a party to Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP) negotiations. In December 2013, Vietnam became the 20th member of the Cairns Group.
Australia’s commitment to development co-operation with Vietnam is ongoing. The Australian Government will provide an estimated $83.6 million in total official development assistance to Vietnam in 2016–17, of which an estimated $58.4 million will be bilateral funding to Vietnam managed by DFAT.
ACIAR Vietnam is part of the Australian government’s commitment to development in Vietnam, which underlines the equal partnerships in economic growth, security and innovations.
The Program aligns well with agricultural priorities under the Science and Technological Co-operation Treaty (2014), focusing on agriculture, aquaculture, food security, environment and natural resource management; and the Aid Investment Plan (2015) for the period from 2015-16 to 2019-20, which aims to:
- enable and engage the private sector for development,
- help to develop and find jobs for a highly skilled workforce,
- promote women’s economic empowerment, including ethnic minority women.
ACIAR Vietnam identified its research priorities through extensive consultations with stakeholders, including annual partnership dialogue with Vietnamese research institutions, non-government organisations and key government representatives (2015), and sectoral consultations for forestry (2013), fisheries (2011) and specific regions (2008). ACIAR identified the following medium-term research priorities for Vietnam:
- making rice-based farming systems in the Mekong Delta resilient to climate change
- managing resources to make agriculture in south-central coastal Vietnam profitable and sustainable
- reducing poverty through engaging smallholder farmers in the north-western highlands with markets
- developing high value aquaculture industries
- developing higher value plantation forestry products
- providing advice on the effects of climate change and designing adaptation policy for agriculture.