Economic Reform and Development of the Market Economy (WiRAM)” is one of the three priority sectors of Vietnam-German Development Cooperation. The overall framework for the cooperation in this sector was set by the official WiRAM Strategy Paper, which – after consultations with the Vietnamese Government – was officially approved by both sides in October 2002. The paper defined SME promotion and financial services development as a key priority, together with economic reform and vocational training. A mission to “Elaborate an Implementation Strategy for the focal area Economic Reform and Market Development” was carried out in March 2003. The mission confirmed that the area of SME Promotion and Financial Systems Development is a priority field under “WiRAM”, which is the centre of the cooperation activities. In the context of this mission, the option was considered to work in close coopera­tion/part­ner­ship with a planned EU-Vietnam Private Sector Support Program (sub-component to create an enabling environment for private sector growth at provincial/municipal level).

This study was undertaken as part of the ILO project “Extension of Micro-insurance and Microfinance to Informal sector Women Workers”. This project was part of an inter-regional programme, funded by the French government, whose objective was to develop a variety of innovative mechanisms to expand social protection to excluded groups. The other participating countries were Burkina Faso and Ethiopia. The lessons learnt from these three experiences were intended to contribute to national and international debate on poverty reduction and the extension of social protection.

The Vietnam-Finland Forestry Sector Cooperation Programme has implemented a Credit Scheme since 1996 in Bac Kan Province covering two districts and nine communes. The Credit Scheme has evolved over the years since 1999 and in recent years has been managed by four separate operators: the Vietnam Bank for Poor in Cho Don and Ba Be, and the Women’s Union in Cho Don and Ba Be.

This ASEAN-wide RETA project was designed to strengthen the capacity of the Ministries of Finance (MoF) in selected DMCs to understand and forecast financial crises. The objective of the project was to develop such capacities, and in particular to improve the quality of financial system monitoring for ASEAN Finance Minister meetings.

About one third of the Vietnamese population lives below the poverty line, and 85% of the poor live in rural areas. The primary expenditure instrument used by the Government of Vietnam to improve rural incomes has been subsidized irrigation investments. Irrigation accounts for about half of all public expenditures in the agricultural sector, and three-quarters of all capital investments. The primary question posed by this study is: how effective are public irrigation expenditures in increasing rural incomes, particularly for the poor?