The International Fund for Agricultural Development (IFAD) is an international financial institution and a specialized agency of the United Nations dedicated to eradicating rural poverty in Vietnam and other developing countries. IFAD supports more than 200 ongoing programmes and projects around the world.^[1]

IFAD works for and with the poorest people in Vietnam, including ethnic minorities, small-scale farmers and households headed by women. Strategies to reduce poverty and improve living conditions include building partnerships, strengthening institutional capacity and promoting participation. IFAD works with the government and other partners to empower poor rural people so they can have a role in decision-making. To do this, IFAD finances programmes and projects that focus on developing and testing innovative approaches to poverty reduction that can be replicated and scaled up by the government and other agencies. Interventions are area-based and multisectoral. They target regions where poverty reduction is a priority.

IFAD's Vietnam country programme is aligned to the government of Vietnam's Social Economic Development Plan (SEDP) 2006–2010, and to the principles of the Hanoi Core Statement.

Over the last five years, the IFAD country programme in Vietnam has retained a strategic focus on participatory planning; increasing the capacity of poor rural people to participate in local decision-making processes; decentralization and community-driven development; increasing the assets of poor communities; and support for small-scale infrastructure. In response to Vietnam's dynamic rural development, in the last three years^[when?] aspects of market-oriented approaches to poverty reduction and institutional sustainability have taken on increasing importance. Particularly central are improving access to markets; promoting private-sector growth; delivering services for market-oriented poverty reduction; and mainstreaming poverty-focused, market-oriented approaches and methodologies in rural, public-sector institutions.

The starting point for IFAD’s country programme for 2008-2012 was the growing disparity between rural and urban areas, particularly the plight of ethnic minorities (EM) in upland areas.^* The Country Strategic Opportunities Programme (COSOP) identified IFAD's comparative advantage in Vietnam as being the development of innovative methods for linking poverty reduction with market-oriented agricultural and rural development; forming strong partnerships with provinces; and promoting government ownership. In this COSOP period, IFAD interventions will promote the adoption of climate change mitigation and adaptation measures, as appropriate.

Building on extensive dialogue with the government, the COSOP 2008-2012 focuses on four interlinked strategic objectives (SOs):

• Rural poor households in uplands access markets through increased private-sector partnerships
• Poor and vulnerable households take advantage of profitable business opportunities
• Upland poor communities secure access to, and derive sustained benefits from, productive natural assets
• The rural poor contribute to pro-poor agricultural, market-driven policy processes at subnational levels
• ‘Uplands’ is a term used by the Committee for Ethnic Minorities (CEM) and refers to 20 highland and midland mountainous provinces in central and northern Vietnam. In addition, there are 114 upland districts in 26 other provinces. The uplands have a complicated topography and are generally inhabited by ethnic minority groups.^[2]

IFAD's country programme supports operations in 11 poor provinces of Vietnam. From 2002 to 2010 in Tuyen Quang province, the country programme supported poverty reduction and economic growth through the promotion of participatory, decentralized community development, and targeted poor upland ethnic minority groups and women. The country programme worked in 823 Tuyen Quang villages and reached over 75,700 beneficiaries, of whom 49,000 were women and 55,000 were from ethnic minority groups.^[3]

IFAD's development partners in Vietnam include the United Nations Development Programme (UNDP) and the Swedish International Development Agency (Sida), which have financed grants supporting technical assistance and training in four of IFAD's five projects implemented in the country. Another partner, the Government of Italy, will finance capacity-building activities in Gia Lai province, where IFAD may invest at a later date. In the recently approved Programme for Improving Market Participation for the Poor, the German Agency for Technical Cooperation (GTZ) is providing technical assistance. The programme is a partner in the Making Markets Work Effectively for the Poor (M4P) initiative supported by DFID and the Asian Development Bank.

In the poor provinces where IFAD projects are, initial management capacity is usually limited. Grants finance technical assistance that supports capacity-building in local and grass-roots institutions. Grant-related activities introduce innovative ideas for targeting rural poor people and enabling them to participate in the decisions affecting their lives. They also bring gender issues into the mainstream of the development process.

Working as partners in the Decentralized Programme for Rural Poverty Reduction in Ha Giang and Quang Binh provinces, IFAD and Norway have agreed upon a US$5.0 million debt swap for incremental investment activities.

Sharing lessons learned in the process of decentralization and community-driven development is one of the subjects on the agenda of the IFAD-funded Country Programme, to be taken up in the context of national policies and programmes in collaboration with other development agencies, multilateral and bilateral agencies and international and local NGOs.^[14]

Steady and strong growth in recent years have fuelled Vietnam's ambitions to move up to middle-income country status. A net importer of food during the early 1980s, Vietnam has become one of the biggest rice exporters in the world. The agriculture sector accounts for more than 22 per cent of GDP, 30 per cent of exports^[15] and 52 per cent of all employment.^[16] Past agricultural growth was largely based on bringing additional physical factors of production into use, including land, irrigation water, labour and new technologies. Further growth acceleration in Vietnam during the 1990s was brought about through institutional restructuring that created incentives to invest and enhance productivity in a market-oriented economy. For example, the effects on agricultural growth of price liberalization and land titling were dramatic. The rural sector has shown resilience and a capacity for change and adaptation. The growth in agricultural output contributed greatly to improved household income, as roughly 70 per cent of the Vietnamese population is engaged in agricultural activities.

Meanwhile, the country's poorest rural people generally have small plots of low-quality land or are landless, and their opportunities for off-farm employment are scarce. The poorest people live in remote villages in upland areas, with limited access to transportation and social interaction. Rural poor people have limited access to productive resources and basic financial services such as credit and savings. Village, commune, district and regional infrastructure is poorly developed. Rural poor people face harsh natural conditions and frequent natural disasters. They are particularly vulnerable to seasonal hardships, community-wide crises and unexpected events, such as disease, which increase a household's expenses and reduce income. Poor households tend to include more dependants, especially children. Among age groups, poverty disproportionately affects children. Poor people, particularly ethnic minorities, are often uninformed about their rights and lack access to legal assistance.

The poorest people in Viet Nam include

• members of the country's 53 ethnic minority groups, who depend mainly on forest resources for a livelihood (they constitute only 13 per cent of the population but account for almost 30 per cent of poor people)
• people living in remote upland areas with a poor natural resource base
• people living in coastal areas that are more prone to adverse climatic events
• households headed by women
• households with disabled members
• migrants
• landless people

There are broad regional variations in the distribution of poverty. The regions with the highest relative poverty rates include the north-west, north-central, central highlands, central coast and north-east. But in terms of absolute numbers, more poor people live in the north-central and north-east regions, in the Mekong Delta and central coastal regions, which are home to seven out of 10 of Vietnam's poor people.^[17]

• Poverty
• Food security
• Development Finance Institution