VDF Workshop on
Managing the Development Process and Aid

June 13, 2006

Prof. Izumi Ohno gave an overview of the development administration systems in Thailand, Malaysia and the Philippines with a focus on the role of central economic agencies (CEAs). Each country has different coordination mechanisms for development planning, budgeting, investment selection and aid-financed activities.  The role of leadership, the quality and capacity of technocrats, and the design and functions of institutions are identified as the key drivers of building effective CEAs. Prof. Masumi Shimamura presented the case of the Eastern Seaboard Development in Thailand to examine the factors behind its “success”: (1) strong leadership and ownership to ensure public interest, (2) competency of technocrats, (3) powerful CEAs, (4) special institutional settings, (5) functioning coordination mechanisms, and (6) external factors.

MPI officials pointed out that, in the current decentralization initiatives of ODA management and implementation, the right balance between what to decentralize and what to remain centralized was the challenge. Since the proportion of loans is likely to increase in ODA to Vietnam, programs must be selected effectively with close coordination between central and local governments, taking into consideration their macroeconomic implications and the country’s overall development strategy. MPI emphasized the importance of capacity building of local governments to effectively manage the development process and aid.  A researcher pointed out that decentralization issues should not be discussed only within the context of aid but should be dealt with comprehensively including institution and capacity building of the country.  Active debate took place on decentralization issues and participants shared their views that speed and sequencing also need to be taken into account in the decentralization initiatives.

Participants raised questions whether the models of Thailand and Malaysia are valid in the Vietnam’s context.  Some issues raised were: (1) there are risks in concentrating too much power to a leader, (2) check and balance mechanism is insufficient in the government’s coordination system, (3) responsibilities of agencies are not clear and effective coordination is difficult.  As to the role and authority of the CEAs in Vietnam, there were different opinions among participants: some stated that the CEAs have limited role and power whereas others stated that the CEAs possess significant role in handling development and aid management.  Participants agreed that the experiences of the three countries are the good starting point to consider opportunities for capacity development and effective utilization of aid in Vietnam.

Participants commented on the relevance of these countries’ experiences to Vietnam.