Foreign donors guaranteed Vietnam official development assistance of more than US$8 billion at a meeting Friday, a sharp increase from the figure pledged a year ago.
The annual pledge was announced at the Consultative Group meeting on Vietnam, which included Vietnam's top donors such as the World Bank, the Asian Development Bank, Japan and EU, concluded a two day meeting in Hanoi.
The Official Development Assistance (ODA) funds will help Vietnam stabilize its macro-economy, regain growth and further reduce poverty, the Consultative Group said in a statement.
Foreign donors began offering development assistance to Vietnam in 1993. Their pledges have totaled $42.5 billion since then, more than half which has been disbursed, according to the government.
Last December the group announced $5 billion in aid. The figure was later revised to $5.85 billion by the government after Japan resumed aid this year. This year's disbursement is expected to reach $3 billion.
During the meeting, foreign donors and government officials discussed various issues including economic stability and poverty reduction.
ADB Country Director for Vietnam, Ayumi Konishi, lauded the government's efforts to manage the adverse impact of the global economic crisis. "Risks are growing and we appreciate the government's recognition that stabilization is the essential prerequisite for rapid and sustainable growth," he said.
World Bank representative in Vietnam Victoria Kwakwa said a key theme was improving business competitiveness and reinvigorating state-owned enterprise reform.
"I think the message from donors to government is to really move forward on this and to move forward in a bold way," she said.
The increased ODA comes with Vietnam's economy on track to grow around 5 percent this year, according to government figures.
Middle income status
Vietnam is also likely to cross the middle income threshold of having average annual per capita income of at least $1,000 next year, which will have an affect on the composition of future aid and is likely to impact the total volume.
The World Bank and other development partners were already beginning to discuss how the annual Consultative Group meeting should change as middle income status alters Vietnam's eligibility for certain types of assistance, Kwakwa said.
"We don't expect that there will be a major cut-off, just like that. I think that it will be more gradual and in a way that responds to the needs that the country still has," Kwakwa said.
Mark Kent, the British ambassador, said this Consultative Group had already begun looking at those challenges.
"While obviously keeping the focus on poverty reduction is going to be important still, increasingly we are going to be looking at other challenges if Vietnam wants to keep on moving up the value chain -things like dealing with corruption, dealing with infrastructure, he said.
Climate change figured prominently this year, and a United Nations official said earlier in the week that future soft loans and other development aid to Vietnam could be dominated by climate change-related projects.
Vietnam is recognized by international organizations as one of the most vulnerable countries to the effects of climate change, including rising sea levels.