Support in Reform and Building of Institutions (1986-1999)
According to the 2012 Evaluation Study of Long-Term Development Cooperation between Vietnam and Sweden by Sida, Vietnam’s post-1986 economic reforms undoubtedly helped lift many millions of Vietnamese out of poverty. The number of people benefited in this way is difficult to quantify precisely, but it is certainly in the millions, given that the number of Vietnamese living in extreme income poverty fell by 42 percentage points between 1993 and 2006
During the early 1980’s, Vietnam suffered from poor economic growth, low agricultural productivity, and food shortages. Almost 75 per cent of the population was living under the national poverty line. The country was heavily dependent on aid from Soviet Union and was influenced by the central planning model.
The Vietnamese economic system needed a change and it embarked with a series of market-oriented economic reforms (Doi Moi). Change was initiated with the creation of a central treasury, encouraging the autonomy of State Own Enterprises, removal of rice controls, and putting an end to the government’s foreign trade monopoly.
Sweden’s support for Doi Moi from 1986 onwards was fully consistent and relevant with these emerging needs. During this period, Vietnam received approximately 893 million USD in ODA from Sweden that aimed to help the country integrate into the world economy, transform to a market economy, reform administrative procedures, reduce poverty and protect the environment. At the same time, cooperation between Vietnam and Sweden also focused on projects which helped Vietnam build institutions and policies as well as develop human resources for many sectors through long-term technical assistance programmes.