VietNamNet Bridge – If the public debt is not thoroughly considered, the Vietnamese government may have to choose between paying debts and maintaining investment in social development projects, said Cephas Lumina, an independent expert of the United Nations on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights after a 7-day trip to Vietnam.

Mr. Lumina came to Vietnam to assess the impact of the country’s foreign debt on the realization of human rights and the achievement of the UN Millennium Development Goals (MDGs) and explore the impact of the global economic downturn on Vietnam’s debt burden, human rights and MDGs.

During the visit, the UN independent expert met with representatives of the National Assembly Committee on Budget and Economy, officials of the State Bank of Vietnam, the country’s development partners (both bilateral and multilateral), and members of civil society.

He also met and discussed with research agencies, financial institutions, donors and foreign non-governmental organizations operating in Vietnam.

Lumina highly appreciated the Vietnamese Government for its remarkable progress towards fulfilling the MDGs. Vietnam has achieved three out of the eight MDGs well ahead of schedule: halving its poor, ensuring gender equality and making primary education available to all.

“It is making significant progress towards achievement of the remaining MDGs. With the demonstrated commitment of the Government and the continued support of its development partners, I believe that Vietnam can achieve the remaining MDGs by the target date,” he said.

“In the last decade, Vietnam’s income per capita has risen from US$390 in 2000 to $1200 in 2010. More than seven million jobs have been created. Vietnam’s impressive success in socio-economic development is evidenced by its recent attainment of lower middle-income status. These achievements bear testimony to the political will of the government to improve socio-economic condition of its people,” he added.

However, he noted Vietnam about a number of challenges, including those linked to its “lower middle-income” status. Accordingly, non-concessional loans will replace concessional loans and grants offered through official development assistance (ODA). ODA has played an important role in advancing human development in Vietnam. Last year, it supplemented nearly 11 percent of the total social investment and 17 percent of the total state budget.

“Vietnam’s reliance on ODA to sustain its investment-based growth is increasingly challenged by the decline of ODA at the global level and by the impact of the global economic downturn. The country’s greater integration into the global economy has been a mixed blessing. While integration has resulted in better trade and investment opportunities, enhanced flow of goods and services may also occasion social problems in sectors of the population, especially among the most vulnerable groups. Another possible consequence of increased foreign investment is the widening income gap between skilled and unskilled workers,” he analyzed.

He also pointed out climate change as another challenge for Vietnam. Vietnam is prone to environmental hazards and is vulnerable to sea-level rise, particularly in the Mekong Delta

region. These may occasion loss of agricultural export revenues, loss of livelihoods and induce migration, and ultimately affect development.

He realized that the Vietnamese Government has acknowledged these challenges and is committed to addressing them. In this regard, it is implementing a number of policies to stabilize its economy. In consultation with various stakeholders, it has developed a Socio-Economic Development Strategy (SEDS) for the period 2011-2020 and a five-year Socio-Economic Development Plan (SEDP) for 2011-2015.

“These policies deserve the support of the country’s development partners,” he commented.

“In its Universal Periodic Review report, the government stated that the people of Vietnam are at the center of the government’s national development strategy. According to Vietnam’s model of human development, development is only meaningful when it serves each person and is owned by each person. I fully support that approach,” he said.

Regarding the sustainability of Vietnam’s foreign debt and its effect on MDGs, he pointed out the two issues that require urgent attention: addressing the budget and trade deficits and the challenges of access to information.

He said that to enhance transparency and accountability in the management and use of public resources, the government should ensure availability of accurate and timely information on, inter alia, debt and ODA.

The UN expert said that he would continue collecting information and analyze it to make an initial report to submit to the UN Human Rights Council in June 2012.

“In the interim, I will submit a preliminary note on the mission to Human Rights Council in June this year,” he said.

Thuy Chung