Budget support
16. DFID's evidence to us says,
"DFID budget support [in Vietnam] has grown
from just under £10 million per annum in 2002 to £34.5
million in financial year 2006-07. As a percentage of our overall
programme, budget support has increased from 43% to 70%."[16]
General budget support accounts for around 50% of
the DFID programme in Vietnam. The main channel for this is the
Poverty Reduction Support Credit, a budget support instrument
developed and led by the World Bank. A further 20% is provided
as targeted or sectoral budget support, mainly for education and
rural development.
17. DFID argues that budget support is an efficient
tool which increases the capacity of the recipient country to
take ownership of its own development.[17]
In our meeting with the Vietnamese Minister for Planning and Investment
he warmly welcomed this approach. We heard from other donors that
budget support was a useful vehicle for maximising donor harmonisation
in Vietnam and enabled donors to engage with the Government on
policy development. We also heard that budget support had a 'multiplying
effect': the Parliamentary Under-Secretary of State, Gareth Thomas,
told us that it enabled DFID to "leverage the resources of
the Government [of Vietnam] to be better directed at the very
poorest communities".[18]
18. We heard from ActionAid International that there
were, however, some potential disadvantages to this approach:
"As civil society, we have thought about
the complete reliance on budget support. DFID's interactions and
funding to civil society in Vietnam have gone to practically nil.
[…] It is important for us to realise that that may have
a cost both to DFID and to civil society."[19]
19. Ramesh Singh went on to suggest that budget support
was a particularly attractive option for DFID in Vietnam for reasons
of efficiency:
"The number of staff in DFID generally is
reducing and there is less funding for Vietnam and globally.
Therefore, resorting to budget support seems very efficient in
many ways. [… But] we are looking to the effectiveness side
of it, not just the efficiency side."[20]
DFID's own independent evaluation of the Vietnam
programme suggests that there may be a bias towards budget support
despite the fact that other aid instruments or combinations of
aid instruments may be more effective:
"Despite the thrust towards 'programmes
not projects', some of the best results—e.g. in road transport
and in education—have come from a combination of the two."
[21]
19. Reliance on working primarily through the Government
has had an impact on DFID's relationship with civil society organisations.
We have often seen, as a Committee, the central role civil society
can play in development, in terms of providing services, holding
government to account and advocacy on behalf of poor people. As
Vietnam faces new challenges in its next phase of development,
we believe that a strong civil society will be fundamentally important.
However, most of our evidence and our experience during our visit
suggests that civil society in Vietnam is under-resourced and
capacity is weak, and that DFID provides it with very little support.[22]
We explore this issue further in Chapters 3 and 4.
20. We agree with many of DFID's arguments in
favour of budget support, including its multiplying effect, and
its impact on government capacity and ownership of development.
The Government of Vietnam has a good track record on poverty reduction
and should be supported. We are concerned, however, that DFID
may be neglecting other aid instruments or combinations of aid
instruments in favour of budget support, even where these could
be equally or more effective. In particular, we believe that DFID
should engage with civil society more than it currently does,
including looking at options for civil society projects to run
in parallel with Government-led initiatives. We believe that a
strong civil society in Vietnam will be crucial as the country
faces new challenges in its development, and in its social and
political evolution.
21. Monitoring and evaluating funding given through
budget support and assessing the impact of this expenditure are
complex tasks. They are also crucial tasks. The Parliamentary
Under-Secretary told us that DFID was supporting the Government
of Vietnam's own monitoring and evaluation initiatives and welcomed
the fact that the Government's new poverty reduction strategy,
the Socio-Economic Development Plan, had a monitoring and evaluation
framework alongside it.[23]
He also noted that DFID had in place its own monitoring and evaluation
systems. Our experience in Vietnam was that DFID was able to demonstrate
the impact of its work on poverty reduction to a satisfactory
degree. However, some of the evidence we received in the inquiry
leads us to qualify that view. Dr Gainsborough told us,
"There can be a sense on the Vietnamese
Government side: we will meet with you, we agree with you, you
give us the money, we will do something which vaguely resembles
what we talked about and then we will have a workshop and we will
all shake hands and it is all done."[24]
22. Ramesh Singh noted that the Vietnamese system
lacked the capacity to produce qualitative monitoring and evaluation
data, despite the impressive capacity to produce quantitative
data.[25] Moreover, DFID's
own evaluation of the Vietnam programme concluded that,
"The Government of Vietnam's monitoring
and evaluation mechanisms remain weak and far too little attention
has been given to this in the past. Although it can be reasonably
inferred that there is a positive impact on the poorest from provision
of rural transport and infrastructure, the evidence base is weak.
[…] This needs higher priority and without more effort, DFID
cannot be sure that its resources are being optimally deployed
for poverty reduction or that the impact on excluded groups is
positive."[26]
23. It is fundamentally important that DFID is
able to demonstrate effectively its impact on poverty reduction.
We saw some evidence on the ground of this impact. But in terms
of systematic monitoring and evaluation, we believe that "reasonably
inferring" such impact is not good enough. Given that 70%
of DFID's budget in Vietnam is channelled through the Government,
we recommend that DFID urgently re-examine the level of support
it is providing to enhance Vietnam's own monitoring and evaluation
systems, in particular the capacity to produce qualitative data
and analysis. Until those systems are fit for purpose, we recommend
that DFID further enhance its own monitoring and evaluation systems,
including through allocating dedicated staff to this role.
Gender policy mainstreaming
24. Compared to other countries in Asia, Vietnam
is doing well against its gender equality targets. It is, for
example, on track to meet the Millennium Development Goal target
on the ratio of girls to boys in primary education (0.93 in 2004)
and women's representation in the National Assembly is relatively
high. We were encouraged to hear from Dr Gainsborough that the
Women's Union, a Communist Party-endorsed nationwide platform
for women's issues, was a "significant political force in
Vietnam".[27] The
Minister told us that DFID was supporting gender work in education,
political leadership and a "variety of other issues where
there is a very specific gender dimension".[28]
We applaud this high-level work with the Government of Vietnam.
25. But below the headline figures, gender equality
is still some way off. Women are disadvantaged in labour markets
and are over-represented in the lowest paid jobs. DFID told us
that domestic violence is also on the increase, as is sex-selective
abortion. Ramesh Singh noted that the next phase of work towards
gender equality would call for a new approach to gender issues:
"Women's rights issues are difficult within
ethnic minorities, and even the relationship of how the Women's
Union deals with women in general. These issues need to be addressed.
[…] The next generation of work will really be about dealing
with those chronic deeper needs. That requires a different strategy
than just growth and infrastructure."
26. Against this backdrop, we were concerned to see
during our visit to Vietnam that there was little evidence that
DFID's gender strategy had been mainstreamed through all DFID
activity in Vietnam. DFID's Gender Action Plan focuses on "how
DFID can better use its partnerships, its money, and the way we
manage our staff to make a lasting difference to gender equality
and women's empowerment."[29]
However, the Making Markets Work for the Poor projects that we
visited showed no evidence of a gender dimension to their implementation.
We were told that the biogas project that we visited has a positive
impact on women's health due to decreased exposure to wood smoke.
Women were, however, largely excluded from significant policy
input or decision-making roles in these projects.
27. We visited a pig-rearing project funded by the
Orskov Foundation and not supported by DFID. The project was run
through the local Women's Union and provided the women of Huong
Xuan commune with financial and technical support for rearing
and selling piglets. We found this to be an effective, small-scale
way of supporting women's economic development at the micro-level.
28. We welcome the progress on gender equality
that is being achieved in Vietnam. We believe, however, that women
must routinely have the opportunity to participate equally in
decision-making, both at a policy level and on the ground. This
calls for a participatory approach at project level which we did
not observe in DFID's work in Vietnam. As well as ensuring basic
fairness and inclusion, such an approach would provide the Government
of Vietnam with a model for its own programmes. We recommend that
DFID devise a specific gender strategy for each of its programmes
and projects in Vietnam and share these with us within six months.
5 Ev 23 [DFID] Back
6
Vietnamese Academy of Social Sciences, Vietnam Poverty Update
Report 2006, June 2007, paragraph 2.1 Back
7
National Audit Office, Tackling Rural Poverty in Developing
Countries, HC 322, Session 2006-07, March 2007, Appendix
5; and Ev 31 [DFID] Back
8
Q 7 [Mr Singh] Back
9
Ev 31 [DFID] Back
10
Q 7 [Dr Gainsborough] Back
11
Ev 22 [DFID] Back
12
Q 58 [Mr Brown] Back
13
Q 9 [Mr Singh] Back
14
Q 7 [Mr Singh] Back
15
Q 7 [Mr Singh] Back
16
Ev 25 [DFID] Back
17
Ev 24 [DFID] Back
18
Q 57 [Mr Thomas] Back
19
Q 38 [Mr Singh] Back
20
Q 39 [Mr Singh] Back
21
Department for International Development, Country Programme
Review: Vietnam, May 2007, paragraph 8.10 Back
22
Qq 22, 30, 39 [Mr Singh and Dr Gainsborough] Back
23
Q 67 [Mr Bown] Back
24
Q 45 [Dr Gainsborough] Back
25
Q 43 [Mr Singh] Back
26
Department for International Development, Country Programme
Review: Vietnam, May 2007, paragraph 8.35 Back
27
Q 17 [Dr Gainsborough] Back
28
Q 69 [Mr Thomas] Back
29
Department for International Development, Gender Equality Action
Plan 2007-2009 (DFID Practice Paper), March 2007, paragraph
1.3 Back
