Donors urge Vietnam to make growth more inclusive, equitable

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International donors on Monday urged Vietnam to ensure that its land policies are reformed to make them more equitable and environmentally sustainable.

They said this was key if the nation's growth was to provide socioeconomic stability.

At the bi-annual World Bank's Consultative Group Meeting for Vietnam in Hanoi, experts stressed the need for macroeconomic stability, better quality of education and training and a sound land policy.

"Over the past few years and before the recent slowdown, the economy grew at levels that could not be sustained in the long run and accumulated vulnerabilities along the way," said Sanjay Karla, resident representative of the International Monetary Fund (IMF) in Vietnam.

"These vulnerabilities and structural constraints have diminished Vietnam's medium-term growth outlook," he said at the meeting between the central government and development partners.

Asian Development Bank (ADB) Country Director Tomoyuki Kimura said Vietnam should enhance inter-ministerial coordination, saying it is essential because  "there are significant sectoral linkages that cut across the reform program."

A World Bank press release highlighted basic inadequacies in the nation's education system.

While Vietnam's workers are increasingly well educated, many employers in Vietnam are critical of the quality of education, it said.

"In many cases, workers' skills do not match employer needs in an increasingly demanding and advanced labor market, where cognitive and behavioral skills are just as important as the pure technical skills," it said.

Discussing the revision of Vietnam's Land Law, delegates said the process must create a favorable environment for more effective, equitable, and environmentally sustainable management of scarce land resources. 

It should assure secure land rights for farmers, more flexible use of agricultural land, and strengthen land use rights of vulnerable groups such as women, the poor, and ethnic minority communities.

The donors recommended the establishment of a more transparent and equitable arrangements for land acquisition and compensation by the state.

The revisions should limit the circumstances in which compulsory land acquisition may occur, they said.

"This is a key reform for Vietnam's future inclusive and equitable growth," said Pratibha Mehta, United Nations resident coordinator in Vietnam. 

"The reform provides an opportunity to promote greater transparency and accountability in Vietnam's land governance and to ensure that market mechanisms are applied in the land law, particularly in relation to compensation for land users in the land recovery process."

At the meeting, Prime Minister Nguyen Tan Dung thanked the development partners for their constructive comments on the need to maintain macroeconomic stability and restructure growth towards sustainable development in order to avoid falling into the middle income trap.

He also acknowledged the need for an equal and effective education and training system that equips Vietnamese people with skills needed to sustain Vietnam's middle income status forge further ahead.

At the Monday meeting, pledges of nearly US$6.5 billion in assistance were made for Vietnam's development programs in 2013.

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