Background

The recent slowdown in Vietnam's growth reflects structural
constraints in the economy, including weak institutions, a fragile
financial sector, inefficient state-owned enterprises and poor
infrastructure. All of these issues constrain private sector growth by
limiting access to finance, stifling competition and creating high
input costs.

Objective 1 of the Australian Aid Investment Plan for Vietnam aims to
reduce barriers to private sector development as well as engage the
private sector in critical areas of service delivery. Through our strong
relationship with the Ministry of Transport, we will assist Vietnam to
prepare high-quality projects that address transport infrastructure
gaps in Vietnam, and reduce physical barriers by investing in new
transport infrastructure, such as the Cao Lanh bridge.

Working with partners such as the Central Institute for Economic
Management, the Vietnam Competition Authority and the World Bank,
we will continue to support regulatory reform to further stimulate
business development in Vietnam. New private sector led service
delivery models, focused on water and sanitation as well as climate
change adaptation and mitigation, will be piloted. Achieving reform in
these areas is critical to ensuring Vietnam becomes an industrialised
and competitive country.

Expected Results

• Increase in infrastructure projects which include detailed
  consideration of social, environmental and engineering issues.
• Businesses develop and deploy innovative climate smart technology.
• More Rural Water Supply Systems are managed and/or operated by
  private sector agents.
• Increase in households with access to clean water.
• Improved competition policy and enforcement.
• Regulatory reform further stimulates business development.