i Title: Mobilization of investment from local community for construction of rural technical infrastructures in the Mekong Delta Region Level: Thesis of MSc in Public Management Author
INTRODUCTION
Rationale
Located in southern Vietnam, the Mekong Delta Region (MDR), also known as the Southern Delta Area by locals, is one of the world's most fertile and expansive delta regions The MDR comprises 13 provinces and cities, with a natural land area of about 4.05 million hectares (roughly 12% of Vietnam’s land area) and a population of about 17.33 million people (roughly 19.7% of the national population) In rural areas, land covers about 3.51 million hectares (87% of the region’s land area) and sustains about 11.54 million people (66.64% of the regional population) The people of the MDR are known for strong solidarity, creativity, and many shared habits.
(Source: Report of construction planning implementation for MDR - 2012)
Figure1:The location map of Mekong River Delta
The regional development planning orientations showed that MDR plays an important role in regional trading, production for export, rural development of Vietnam With its favorable geographic location (about 700km coastal line and 400km road borderline), MDR is potential for
1 Preliminary statistics - 2011, Available at: http://www.gso.gov.vn/default.aspx?tabidB7&idmid=3
2 Urban Development Agency (2012), Annual Report on Urban Development of Vietnam, Ministry of
Construction, Hanoi. development of maritime, international aviation transport and known as the connection hub between South Asia and East Asia In addition, on the basis of the favorable natural conditions (land, soil, climate, river network), MDR has many advantages in food production, fruit trees, aquaculture (accounting for more than 90% rice output for export; 70% fruits and 74.6% aquatic products of the country) It is possible to say that MDR is strategically located in international exchange among Vietnam and other countries in the region, at the same time, plays an important role in securing food security for the country and region
Although, the natural condition of MDR is very convenient for the investors, especially agricultural sector, the management method of local authorities at all levels are active, flexible; so far, socio-economic development in MDR is not respective to the available potentials of the region, especially in rural areas (which account for majority of land area and population of the whole region) It is the rural technical infrastructure weakness that adversely impacts on the socio-economic development in rural areas in particular and the general development of the whole region
Infrastructure is always regarded as the background for socio-economic development and strongly attracts investment resources However, the technical infrastructure works require a great deal of investment costs but their profitability is not so high, therefore, in the last time, 100% investment in rural infrastructure in Vietnam, particularly in MDR is originated from the State budget while ODA fund gets more and more difficult due to pressure of interest rate, consequently, investment in rural infrastructure becomes the burden on the national budget and seems impossible to meet the people’s demands while the resources from community have not been properly explored Some recent projects have shown that the infrastructural works in rural areas in MDR are still attractive in some certain fields because of the social security objectives and promotion of the community’s development The infrastructure works such as rural roads, grid, communication network and waste water treatment works etc… are constructed at rural areas of MDR with the direct investments from the local residents (by fund, resources and knowledge …) which partially proved the correctness of the foresaid statement However, to make residents’ investment stronger and more effective, it is necessary to develop an investment attraction mechanism from the community From the essential demands, the authors group chose the topic: “Mobilization of investment from local community for construction of rural technical infrastructures in the Mekong Delta Region” in our research.
Research Questions
The research is to answer two main questions:
- What is the community’s role in participating in construction of rural infrastructures in the Mekong Delta Region?
- What are the major factors that impact the mobilization of investment from local community for construction of rural technical infrastructures in the Mekong Delta Region?
The objective and scope of the thesis
This paper aims to analyze the role of the community in investment attraction Moreover, it aims to identify the main factors of policy affecting the mobilization of investment from the community in construction of rural infrastructure in the Mekong River Delta Thereby, the paper also look for recommendations on mechanisms to promote investment attraction with the participation of the community in construction of rural infrastructure in the Mekong River Delta.
Literature reviews
1.4.1 Theories of investment, the role of investment and investment policy in socio-economic development
Sachs - Larrain (1993) in "Macroeconomics in the global economy" presented the general definition of investment as follows: "Investment is the cumulative production to increase production capacity in the post period of the economy" Production includes the production domestically manufactured and imported from abroad – according to the flow of products; for tangible products such as housing, capital construction, machinery and equipment or intangible products such as patents, property transfer fees
There are main types of investment as the following:
+ Investment in fixed assets: including investment in factories, machineries, equipment, vehicles This form of investment is to raise production capacity The ability to achieve high or low growth depends on this kind of investment
Investment in current assets comprises raw materials, work-in-progress, and finished goods inventory The amount invested in current assets reflects the change in the volume of these inventories over a given period, signaling how inventory levels expand or contract and influencing working capital, cash flow, and overall liquidity.
+ In consideration of the macro level of the economy, there is an important form of investment in fixed assets, it is the investment in infrastructure The kind of investment requires the large fund and delayed payback However, investment in infrastructure promotes the development of other sectors in the economy
J M Keynes (1936) has stated that the governmental intervention in the market is essential, in other words, it is needed to have the State’s intervention through primarily applying financial instruments (tax and expenditures) to increase the aggregate demands, to prevent from recession and unemployment The State policies play a certain important role in increasing the aggregate demands and reducing the risk of unemployment Therefore, to overcome the crisis, unemployment, the state government must be regulated through its economic policies, which enable consumption demands improvement and investment insulation To achieve economic growth, the Government should work more in public works, and also promote or encourage investment of private sectors [Keynes 1936]
J.M Keynes brought out the multiplier model in theory, in which it is evitable to increase national income (national productivity) and investment at the same time He studied the relationship between them and introduced the concept of “investment multiplier” The investment multiplier (k) presents the relationship between investment increase and income increase Based on Keynes’s model, if an extra amount of money is added to aggregate investment, then the income will increase by an amount equal to k times investment increase
His multiplier model is presented as: K = ∆Y / ∆ I, so: ∆ Y= k ∆ I
(in which Y is income variation; k is multiplier, I is investment variation) According to Keynes, income is divided into either consuming and saving or consuming and investing Accordingly, he believes that:
Saving (S) = Investment (I) This is also considered economic growth model of Keynes
An uptick in investment generates increased demand for capital goods, equipment, and labor, boosting income and expanding employment opportunities This growth in income acts as the main driver for expanding investment, creating a cycle that sustains more investment and spending The investment multiplier magnifies national income through its chain reactions, demonstrating a direct proportionality between the size of investment and the resulting income and job gains.
Discussing the economic growth and the role of external investment for the developing countries, Samuelson said that most of developing countries is short of capital; their low income only serves for their minimal subsistence Thus their capital accumulation is limited, which is shown in theory "the vicious cycle" and "external jostle" In the opinion of Samuelson, human resources in developing countries are limited by age and low education, lagging technology Therefore, many developing countries are getting more difficult and increasing their "vicious circles" So, it is necessary to have
“external jostle” to develop the economy in order to break the "vicious circles" Samuelson's theory states about overseas investment in developing countries: experts, technology, capital , the necessity for facilitating overseas investments [P Samuelson, 2009]
According to Samuelson's vicious-circle model, development in a country or territory within a developing region is constrained when growth depends entirely on government resources, without the catalytic effects of foreign investment This scenario highlights how the absence of foreign-investment spillovers can hamper productivity, diversification, and sustainable development.
Figure 2: Vicious circle model of Samuelson
There is no single definition of policy Economist Franc Ellis III notes that policy can be understood as a government roadmap of interventions chosen to achieve the targets of a particular sector in the economy In other words, policy comprises the strategic decisions and concrete actions a government selects to steer economic outcomes within specific sectors.
Meanwhile, the Japanese economist – Harry T.Oshima (1987) in the book “Theory of Economic Growth in the Asia” asserted that countries with water rice agriculture in the peak season are still short of labors To settle this issue, the theory offers two main keys in order to improve the living standard of farmers, rural civilization and economic growth and also to avoid a lot of pressures on urban areas They are :
- Remain the agricultural labors and also create more jobs in idle months
3 Franc Ellis (1995), Agricultural Policies in Developing Countries, Agricultural Publishing House, Hanoi.
(increasing crops, diversifying livestock, plants, trades to improve the income)
Advancing agricultural industrialization requires comprehensive infrastructural development in rural areas—reliable electricity, clean water, expanded transportation networks, and robust communication systems—paired with the growth of processing industries and social infrastructure such as education, healthcare, and culture This integrated approach drives economic restructuring, reshapes the labor market, and replaces manual labor with high-yield machinery and advanced equipment, boosting productivity and sustainable rural development By aligning infrastructure, industry, and human capital, rural communities can achieve long-term growth and resilience.
In brief, through the literatures that have been discussed, we believe that the investment in infrastructure through investment attraction mechanism from external resources is essential to create greater incentives for social development At the same time, investment in infrastructure and economic development will enable countries to avoid the risks of unemployment increase and economic crisis
1.4.2 Theories, viewpoints about investment, its policies, and capital source for rural infrastructure development in Vietnam
The research on investment policies for agriculture, farmer, urban – current situation and direction in the current time” (2009) of Agricultural Economics Department (Ministry of Planning and Investment) concluded that: argiculture, farmer and rural areas play a crucial position in terms of industrialization - modernization in our country Developing agriculture and urban , rasing standard of living to farmers are the foundation to ensure that our country can develope stably To implement this mission, we need not only enhance the investment from the state budget in accordance with Resolution of the Party Central Committee on argiculture, farmer and rural but also have reasonable investment policies to attract more investments from enterprise such as: domestic enterprises, FDI enterprises with the aim at industrial development investment, handicraft and cottage industry, service, atracting more investment in potential branches that is not exploited
THEORETICAL FRAMEWORK
The connection between community participation and investment
in building rural technical infrastructure
A 2002 experimental study by the World Bank in Vietnam indicates that mobilizing community participation in project decision-making relies on standardizing a participatory process that helps local people understand how to engage This approach clarifies the steps, roles, and methods for participation, ensuring that residents can contribute effectively within development initiatives.
- Organize some forums wherein the locals can take part in (the local advisory meetings) so as to together determine the necessary infrastructure needed sponsoring by the Project;
- Provide support for the locals to make decisions on which way to develop in their own local area with the assigned and public budget (with the help from the propagandist mobilized in the community
- Train local cadres and people in the skills at determining necessary infrastructure as well as supervising the quality of local small-scale development project
- Decentralize administration to commune level; instruct to enable the commune staff to administer and supervisor the performance process and project finance from the beginning
- Equality in decision-making of project performance (the project is available for the women to participate in)
[Community-based Rural Infrastructure Project (CBRIP) of World Bank has been implemented in Vietnam in 2002]
According to the study, by comparing the modern investment mechanisms with the conventional ones (with community participation), creating the participation opportunities at grass root levels is in a tied relationship with the explicitness and accountability
Source: Authors Figure 3: Conventional investment method and consequences
Source: Authors Figure 4: Community-based investment method and consequences
- Capital and plan is passive
- Lack of opportunities to promote management staff capability
- Explicitness and accountability is passive
- Fail in meeting the practical needs
- Lack of connectivity with the authority
- Uncontrollability of investment effectiveness in local area
Initiative investment process from grassroots level
V o lu n tary co n tri b u ti o n , D ec isions an d i de as co ntr ibu ti on E xp li ci tne ss A cc ou ntabil it y
- Enhance the sovereignty rights and responsibility Real-time demand
Beneficiaries takes part in the infrastructure investment project unless transparency is clearly mentioned in the project information, from that they could contribute their ideas and make decision Simultaneously, local staffs must understand the information and be able to explain the concern if any Conversely, if the project information is transparent and the accountability is enhanced, it will be more persuasive for community to take part in building the infrastructure, thence raising their opportunities to participate in all steps: designing, planning and implementing the project This will enhance personal attitude and responsibility which ensure the solidity of the infrastructure On the other hand, if the projects receive the participation from the community along with the increase in explicitness and accountability, instead of entirely invested in rural infrastructure as the conventional investment methods, the burden put on the national budget will be decreased
Figure 5: The relationship between community participation and transparency, accountability
The CBRIP Project clearly shows that:
1 A clear roadmap for decentralization, management, monitoring and evaluation accompanied with sufficient financial, technical, consultancy, etc., support at the beginning and during the implementation of the project is required to ensure proper project implementation progress and to form strong basis for timely assessing impacts and results of the project as well as for preparing reports
2 Sufficient attention should be given at the outset design of the
Management Information System (MIS) and the Monitoring and Evaluation System (M&E) These systems need to meet the demand of baseline survey, reports and impact evaluation throughout project’s life
3 Better information and communication strategy should be formed to institutionalize learning lessons from the CBRIP for other projects and programs
4 At the beginning of technical design preparation, discussion with
WB should be made to harmonize procedures so that unnecessary procedures on funds management and financial management can be eliminated to provide better conditions for CPMU, PPMU, DPMUS and CPCCs during their project implementation
5 Consensus on project management apparatus, action plan and further increase of project management responsibility should be made
6 Norms of operational expenses are considered on the basis of reasonable spending so that the project can maintain its stable project apparatus with experienced officers, avoid repetitive training and enhance project effectiveness
7 For successful implementation of a newly piloting approach as community participatory one, indispensable elements are: strict adherence to designed training process; strengthening of necessary capacities to cadres at various levels, especially at grassroots one
8 Reasonable calculation of technical parameters should be made to enhance project’s life and avoid wasting society’s capital and labor.
The Provincial Governance and Public Administration
The Viet Nam Provincial Governance and Public Administration Performance Index (PAPI) is a joint policy research implemented collaboratively between the Centre for Community Support and Development Studies (CECODES) – a non-government organization under the Viet Nam
11 PAPI 2011 full report, www.papi.vn
Union of Science and Technology Associations (VUSTA), the Front Magazine of the Vietnam Fatherland Front (VFF), the Commission on People’s Petitions (CPP) under the Standing Committee of the National Assembly (since February 2012), and the United Nations Development Programme (UNDP) in Vietnam are key organizations involved in science, governance, and development They collaborate on initiatives that promote scientific advancement, citizen engagement, and inclusive development across the country.
PAPI measures the standards of governance and public administration drawn from citizens’ experiences in their interactions with governmental authorities at different levels As a tool to monitor performance, PAPI contributes to accelerate continuous improvement in governance and public administration performance In an environment reliant on “self-assessments” by government stakeholders to measure government performance, PAPI helps provide a bottom-up perspective to study people’s experiences and actual feelings
PAPI embodies the Vietnamese motto 'People know, people discuss, people do and people verify,' serving as a comprehensive gauge of governance and public administration performance It delivers objective, citizen-centered data on experiences with local authorities, enabling both awareness and informed discussion at central and local levels By illuminating the collective actions of citizens, PAPI helps policymakers understand what people actually do and shape policies that serve their interests In addition, it provides an efficient tool to assess governance quality, validate findings through discussion, and drive accountability and improvement in public service delivery.
Box 2: PAPI in Vietnam for the period 2009 – 2011
In 2009, the PAPI pilot program was rolled out in three provinces The results presented at workshops in those provinces generated broad support, encouragement, and constructive suggestions for improvement These findings also carried practical significance for key stakeholders, including Party leadership, the government, the Fatherland Front, various government departments, and the media.
In 2010, the project was implemented in 30 provinces/cities
In 2011, PAPI was implemented across all 63 provinces/cities in Vietnam, reflecting experience and feeling of 13.642 people and marking a great turning point of the PAPI study in making positive efforts for the policy making based on empirical data actual administrative performance allowing “people to verify”
Amid rising demand for citizen engagement in governance and improved public administration performance, PAPI has emerged as an innovative approach to inject objective, evidence-based measures into policy-making decisions By capturing citizens’ experiences in their interactions with local authorities, this pioneering method is increasingly embedded in mainstream policy-making, policy implementation, and policy monitoring processes.
Figure 2: Two measuring factures in PAPI
In fact, PAPI has got Initial Reflections and Policy Usage:
Increasing evidence of provinces discussing PAPI findings and ways to improve performance
(e.g: Ha Tinh, Kon Tum, Dak Lak, Ho Chi Minh City, Da Nang)
Kon Tum’s action plan to improve performance
PAPI 2010 is used for analyzing social services in Human
Several PAPA 2010 indicators used in Government Inspectorate (GI) Report to the Standing Committee of the National Assembly & in M&E indicator system on Anti-Corruption under construction
PAPI data used to identify its usefulness for monitoring the implementation of the National Strategy on Gender Equality
PAPI is not only an output but also a means of public governance as per General Plan 2012 – 2016 between the Vietnamese Government and the UN in Vietnam
The Ministry of Home Affairs (MoHA), as the leading government agency responsible for Public Administration Reform (PAR), is evaluating PAPI as a potential framework to guide and complement its upcoming PAR index at both central and local levels.
PAPI’s framework, methodology and philosophy highlighted as a international example in several international discussions (Beijing, Nepal, Tunisia, ASEAN + ROK, and Indonesia) and in the governance assessment portal (GAP)
PAPI analyzes six dimensions of provincial governance and public administration, with each dimension comprising three to four sub-dimensions and grouped under six indicators: local participation, transparency, vertical accountability, control of corruption, public administrative procedures, and public service delivery.
Figure 3: PAPI index and component indices
PAPI assesses three mutually reinforcing processes—policy making, policy implementation, and the monitoring of public service delivery—and tailors these dimensions to Vietnam’s national and subnational contexts This framework ensures governance performance is evaluated across central and local levels, linking policy design to action and service delivery outcomes By integrating policy formation, execution, and service monitoring, PAPI delivers a cohesive, data-driven picture of governance in Vietnam that highlights strengths and areas for improvement for policymakers, practitioners, and researchers.
Source: Authors Figure 4: Influences between PAPI’s assessment contents
Within the scope of the topic, the authors chose to deeply study the index belong to the following contents: the participation of people at grassroots level (voluntary contribution); publication and transparency; responsibility for explaining to the people to see the role of the participation of the community in building rural infrastructure in Mekong Delta and factors influencing the participation of people in investment attraction mechanism
This study analyzes the role of community participation in a World Bank project, focusing on how voluntary contribution, transparency, and accountability in communicating the project to the PAPI-2011 population influence outcomes It proposes a model for studying the investment mechanism that integrates community involvement into the construction of technical infrastructure in MDR, detailing how local stakeholders affect funding decisions, governance, and project sustainability, and how this participatory approach can improve efficiency, legitimacy, and social impact.
Figure 5: Analysis frame for attraction mechanism of investment in building infrastructure with participation of the community
(trading, knowledge, economy, culture, etc.)
RESEARCH METHOD
Data collection
There are 2 sources of data which are used for final thesis:
- The Secondary Data Source: The Viet Nam Governance and Public Administration Performance Index (PAPI) 2011: Measuring Citizens’ Experiences A Joint Policy Research Paper by Centre for Community Support and Development Studies (CECODES), The Front Review of the Central Committee for the Viet Nam Fatherland Front (FR), Commission on People’s Petitions of the Standing Committee for the National Assembly of Viet Nam (CPP), and United Nations Development Program (UNDP),ect
- Data and Statistical Reports: Local Authority, Ministry of Construction, and Ministry of Planning and Investment.
Methods of analysis
In this paper, the authors have listed natural features and elements, rural infrastructure, and existing investment policies of the Mekong Delta Results of one project have been integrated and theories have been mapped in association with actual data in order to identify role of the community in investment in rural infrastructure Combination of analyzing influencing factors in relation to three component indexes (voluntary contribution, transparence and accountability to the people) of PAPI Index, the binding relationship among factors affecting the investment in the region’s infrastructure construction in connection to the community’s participation SWOT model is applied to analyze strong points, weak points, opportunities and challenges of the region in order to make recommendations to build investment attraction mechanisms for rural infrastructure in the Mekong Delta.
CURRENT STATE AND POLICIES ON
Current social-economic and rural infrastructure situation of the
4.1 Current social-economic and rural infrastructure situation of the Mekong Delta
Annually, the Mekong Delta Region contributes around 27% to the whole nation’s GDP, over 50% of total food production and more than 90% of export rice of the whole country, and earns more than two billion USD per year 12 in terms of foreign currency
(Source: http://www.mekongdelta.com.vn)
Figure 6: Administrative map of the MDR
Up to July 2011, land area of rural areas in the Mekong Delta is around 3.51 million ha (accounting for 87% of the total region’s area) and population is approximately 11.54 million people (accounting for 66.64 % of the region’s population It means that the urbanization of the whole region is only 33.36%) 13 , including thirteen provinces and cities namely Long An, Dong
12 Data collected from the Submittal to the Government on Program of Implementing Decree 26/NQ-TW of the Steering Committee of the Southwestern region
13 Urban Development Agency (2012), Annual Report on Urban Development of Vietnam, Ministry of Construction
Vietnam's Mekong Delta region comprises Dong Thap, An Giang, Tien Giang, Vinh Long, Ben Tre, Kien Giang, Can Tho City, Hau Giang, Tra Vinh, Soc Trang, Bac Lieu, Ca Mau, and Long An The region has a total of 1,303 communes, with Long An having the most (166 communes) and Can Tho City the fewest (36 communes).
From 2000 to 2010, investments in infrastructure drew widespread attention, leading to new rural infrastructure construction and upgrades in both breadth and depth These improvements boosted production, fostered innovation in rural areas, and raised living standards for residents.
- The traffic network in rural areas within the Mekong Delta consists of district and commune roads with a total length of 40,192 km, of which district roads of 8,700 km, commune roads of 31,492 km
From 2000 to 2008, investment in developing the rural power grid and expanding electrification in the Mekong Delta delivered solid results The national grid extended to all communes, fundamentally satisfying the electricity demand for production and daily life of residents Electricity consumption per capita grew during this period, reflecting improved access to electricity across the region.
2008 was 481.3 kWh / year, in which that of Can Tho City reaches highest level of 899.8 kWh/capital/year, that of Long An ranks the secondly highest level of 867.9 kWh/capital/year
- Because of complicated terrain, the rural telecommunication was designed and constructed under the combination of three methods (installing home phones, setting cables and pulling subscriber lines to subscribers’ homes in flat and crowded areas; synchronously using two modes of rural telecommunications networks radio and satellite communications for the remote areas In July 2011, telephones are absolutely availed in 100% communes) 89% of rural households can use of this communication system People living in the Mekong Delta Region gets used to take rain water
14 General Statistics Office of Vietnam (2012), Results of Rural, Agricultural and Fishery Census 2011.Statistics Publishing House for drinking and cooking whereas canal water is used for living and domestic activities In some places, water is mainly supplied from water wells In late
2008, over 65% of the population in countryside was provided with qualified water for living activities As of July 2011, approximately 81.1% of total communes had equipped with concentrated water supply system for living activities
Irrigation in the Mekong Delta provides domestic water for about 10 million people, equal to roughly 66% of the region’s population About 50% of the rural population can access clean water sourced from these irrigation systems Beyond boosting economic output in agriculture, forestry, and aquaculture, irrigation also delivers meaningful environmental improvements.
-In July 2011, the share waste water drainage system had been completely built in 31.8% of total communes and 51.9% of total communes has organized the movement of waste collection
Recently, targeted investments in the Mekong Delta's infrastructure have aimed to raise living standards and accelerate socioeconomic development across the region These projects focus on transportation networks, water management, energy, and digital connectivity to boost productivity, resilience, and access to markets By upgrading roads, bridges, ports, irrigation systems, and power supply, the Mekong Delta can reduce costs for businesses and households, create jobs, and promote sustainable growth for local communities.
Table 1: Summary of some infrastructure criteria of Mekong Delta in 2011
Road to People’s Committee of Commune
Comm une % Com mune % Com mune % Com mune
Long An 166 162 97.6 166 100 63 38.0 91 54.8 Tien Giang 145 145 100.0 145 100 50 34.5 102 70.3 Ben Tre 147 147 100.0 147 100 42 28.6 84 57.1 Tra Vinh 85 84 98.8 85 100 25 29.4 31 36.5 Vinh Long 94 94 100.0 94 100 30 31.9 56 59.6 Dong Thap 119 117 98.3 119 100 47 39.5 85 71.4
Road to People’s Committee of Commune
Comm une % Com mune % Com mune % Com mune
Com mune Can Tho 36 31 86.1 36 100 13 36.1 19 52.8 Hau Giang 54 49 90.7 54 100 12 22.2 39 72.2 Soc Trang 87 75 86.2 87 100 23 26.4 35 40.2 Bac Lieu 50 37 74.0 50 100 11 22.0 16 32.0
(Source: General Statistics Office of Vietnam- 2012)
Rural infrastructure development policy in Vietnam and the
At the beginning of Doi Moi , Communist Party of Vietnam has directed people to focus on developing the infrastructure, which was weak at that time This direction has been confimed in other key documents issued by the Party According to the 7th Party Congress (1991): “Developing the infrastructure, driving back the down gradation, enhancing the explanation and modernization of traffic network, by-sea transportation, river, railway and international airway, developing rural and mountainous traffic system, etc.” 15
The socio-economic strategy (2001-2010) prepared in the 9th Party Congress
In 2001, the infrastructure development strategy defined its targets as building an infrastructure system that supports socioeconomic development, national defense, and social security; expanding and upgrading the rural traffic network; ensuring electricity, telephone and other post and telecommunications services reach the majority of communes; and providing clean water to urban areas, economic parks, and more than 90% of the rural population.
15 The Communist Party of Vietnam(1991), Documents of Party's 7st Meeting, Truth Publisher, Hanoi, p 65
16 The Communist Party of Vietnam(1991), Documents of Party's 7st Meeting, Truth Publisher, Hanoi, p 176-177
Since 2006, Congress has pursued a policy of encouraging and mobilizing all economic actors, including enterprises with foreign direct investment, to participate in developing the infrastructure system The approach prioritizes national budget investment for socioeconomic infrastructure, with preferential state credit first allocated to infrastructure projects capable of delivering a return and supporting key economic initiatives It also emphasizes building a strategy to attract Official Development Assistance (ODA), focusing on infrastructure construction in economic centers and in regions facing significant socioeconomic obstacles.
In revolving with the investment mechanism and Regional development, Vietnamese Government has issued some documents as the legal based for “the outstanding development” of socio-economy of Mekong Delta They are great and comprehensive directions of the whole Mekong Delta and also primary legal bases for determination of investment and development distribution, based to the construction planning, including rural construction planning; therefore, parameters of projects need to be given priority shall be concretely determined The priority should be especially given to the construction of technical infrastructure works Accordingly, the mobilization of resources shall be implemented by “continuing to pursue the socialization policy, etc in accordance with the specific socioeconomic conditions of each place State budget shall be mainly used for the construction of infrastructure” and the funding assistance mechanism shall be carried out by “absolutely using reciprocal capital for ODA projects managed by each locality” applicable to qualified projects approved by the Government
Additionally, with respect of rural investment and development, concretely rural infrastructure investment and development, the Government has issued various documents with aim at attracting many enterprises to invest in rural Agriculture
17 The Communist Party of Vietnam(2006), Documents of Party's 10th Meeting, National Politics Publisher , Hanoi, p 239-240
In addition to advantages given by socioeconomic development mechanism and directions in Mekong Delta, there remains some disadvantages restricting and limiting the policy implementation and community in developing rural area They are:
- Mechanisms stated in these document are general and related to various investment item whereas it is not really clear to define investment capital source Furthermore, there is no the concretization of investment indices for the development of infrastructure, including total length of road in km contracted every year, the total number of culvert consolidated every year, the percentage of population having chance to use clean water in rural areas, etc Therefore, projects given with priority for the development of infrastructure in order to boosting the development of Mekong Delta have not determined in these documents yet
- With respect of regional development mechanisms: Though the socio- economic development of Mekong Delta has been paid much attention by the State for years, many policies as well as mechanisms have been promulgated, their effect is not so big: They are not synchronous and there are lack of resources (finance and human resources) during the implementation in accordance with these mechanisms and policies Those are main reason causing the limited effected of these mechanisms and policies
- With respect of resource allocation: State investment is not so large and the investment allocation is not really efficient
Within the development association, the cross-border segmentation of the economic field has become an obstacle to the region's overall development, resulting in largely similar development models across provinces There is little to no mutual assistance or interprovincial collaboration within the Area, which reduces competitive efficiency and can even lead to unfair competition.
- The strengths of investment attrition and participation of community in the rural construction are not taken use of There is no concrete consideration put into the combination between capital and resource mechanisms for the infrastructure construction with the participation of community In fact, rural population within this Area accounts for above 66% of total population in the Area Therefore, a reasonable investment mobilization from community shall be very significant to the locality and useful to relatively maize burden given to the Central Budget
Along with the policy of giving priority to the development of infrastructure, we have spent an amount equal to 9-10% GDP (2006) investing in developing the restructure This figure is higher than that of other nations (Laos 7.4%, Cambodia 2.3%, China 7.3%) It shows that we have put special priority to the development of infrastructure In addition, other investment diversification policies have attracted various economic investors
ODA accounts for 37% of total capital investment in infrastructure, along with the budget (about 11%) which is mainly used as a counterpart fund for
ODA, has accounted for nearly half that total capital (see picture on top) This shows that ODA is the most important source of capital for infrastructure development Meanwhile, preferential
ODA (nonrefundable and long-term grant or low-interest) only applies to poor countries When our country gets out of the poverty line (about $ 1,000 GDP per capita) and join the lower middle income countries (LMC - Low Middle Country), the ODA will reduce, terminate and transfer to commercial loans On the other hand our country has
Vietnam (2006) Figure 7: Infrastructure Development Funding mechanisms
Investment capital has increasingly flowed into Official Development Assistance (ODA) loans, and there will come a time when our country should contribute to the ODA fund to help other developing nations In recent years, ODA remains abundant, yet there is a need to proactively mobilize external funds beyond ODA and the national budget, by attracting financing models such as BOT, BOD, and other public‑private partnership arrangements.
BT, bonds etc to avoid falling into passive position
Table 2: Infrastructure Investment Funding Mechanism (%GDP)
Capital Source Traffic Power Telecommunic ation Water Total
During the five-year period from 2006 to 2010, Vietnam allocated a total of 331,334 billion VND to agriculture and rural development, representing 49.1% of the country’s total development investment funded by the State Budget and government bonds Of this, development investment from the State Budget amounted to 237,805 billion VND, equal to 46.3% of the State Budget’s total development investment, while government bond capital totaled 93,529 billion VND, equal to 58.3% of the country’s total government bond capital Within this allocation, investment in socio-economic infrastructure development, hunger alleviation and poverty reduction in rural areas reached 215,502 billion VND, or 65% of total agriculture and rural development investment (the State Budget contribution being 157,521 billion VND, 73.1%, and government bonds 57,981 billion VND, 26.9%).
In addition to budget and government bond as mentioned above, the State also has an annual reserve funds for central state budget of from 7000 to
Vietnam's budget allocates 8,000 billion VND to help provinces and cities mitigate the impacts of natural disasters, floods, and diseases Annually, the state budget spends over 2,000 billion VND to support farmers through agricultural tax exemptions, while about 8,000 billion VND from the construction lottery fund is directed toward socio-economic infrastructure to serve rural development.
Analysis of PAPI index to identify the factors that impact on
An analysis of three dimensions—grassroots participation measured by indicators of voluntary contributions, transparency, and accountability to the people—confirms that the local community shapes decisions to invest in technical infrastructure It also shows that perceived transparency and accountability are necessary to attract and sustain local participation in the construction of these works.
Figure 8: The chart on contribution mobilization from the community -
Figure 9: The index of openness, transparency and accountability to the people of 13 provinces in MDR
The axis of mobilizing community contributions shows that residents participate and understand cash, labor, or material donations for new public works or repairs on a voluntary basis Yet, a cross-cutting analysis reveals that these contributions can become informal “taxes” demanded by local authorities or village heads, potentially burdening the poor Dong Thap province has the highest value both nationally and regionally, followed by Long An and Can Tho.
The authors asserted that there is a relationship in the results of the survey at 02 axes on the transparency and accountability to the people Specifically, when the provinces / cities have high openness and transparency in data on state budget expenditures, compensation land price frame etc and the accountability of government to the people is also at high level and vice versa However, looking at summarized data, it can be clearly seen that the provinces / cities in the Mekong Delta have not yet high transparency level and accordingly, the accountability to the people of the local government is only at average low level Only Long An province is a province with the highest value in these 2 contents (this case will be analyzed in next section of the thesis)
Voluntary contributions hinge on the level of openness, transparency, and accountability to the people in the province or city For example, Tra Vinh Province has a low openness-transparency index, which corresponds to a lower level of voluntary contributions, while Long An Province, with high openness and accountability, shows a higher contribution level In addition to governance factors, natural conditions, per capita income, and human factors influence residents’ willingness to contribute, helping explain why MDR communities have not yet actively participated in rural technical infrastructure construction, even though both the government and citizens recognize the importance of investments in infrastructure.
Summarized analysis on existing data SWOT:
- The Vietnam Provincial Governance and Public Administration Performance Index (PAPI)
- Creating job opportunities for the people in rural areas
- Existing mechanisms and policies are not yet specific
- The risk of saltwater intrusion and sea level rise due to climate change
- Capital for technical infrastructure investments is high
- The qualifications of management staffs
Located in a strategic position to support marine economic development, this region benefits from an annual flood season that deposits sediment, boosting agricultural productivity Its dense network of rivers and canals facilitates efficient waterway transportation and provides a reliable source of fresh water Adjacent to the Southeast Region, which has high demand for raw materials for the processing industry, the area supports strong output of agricultural products and seafood A temperate climate further enhances production, making it favorable for both traditional agriculture and expanding aquaculture.
Human factors o homogeneous in living practices and production activities due to the similarity in natural conditions o Creativity in production and agriculture o The will of "living with floods"
The labor market is rich, abundant
High PCI (2/13 and listed in top 5 and the rest is of good or higher levels) the access ability to investors, increase in regional scale advantage
There are advantages and potentials for development of agricultural products, seafood processing industry, nitrogen gas power, building materials etc and advantages in developing services-tourism with typical features of river and water region
Natural features : o Difficult to create competitive advantage for individual provinces / cities in the region o The annual flood season with widespread impact on construction works and technical infrastructure o The strong impact of the currents of Mekong River and tides into inland terrain, the topography is divided into small segmentations investment rate into infrastructure is big o Soil salinization, acidification in large coastal and border areas difficulties in mining and fresh water supply
Human factors o Educational level is not high, the rate of trained labor just reached 26% (2008) o Lack of intensive and extensive knowledge on application of science and technology o Psychology of doomed and afraid to change
The labor market with high quality
The PAPI is not high (3/13 in the group of highest scores; 4/13 in the group of lowest scores) the ability to convince investors and community participation
Lack of connection of small-scale infrastructure projects with head works
Technical infrastructure in rural areas is lack and poor
Government has issued a series of policies, mechanisms and priorities for the development of rural areas and technical infrastructure the legal investment basis for the development of the region
Receiving preferences to build the headwork’s, which requires large capital
Steering Committee for South West Region
The access to advanced technology and science in rural development
The project is invested creating job opportunities for the people in rural areas
Existing mechanisms and policies are not yet specific not yet attract investors and community to participate in construction of infrastructure (water supply, drainage etc.)
The risk of saltwater intrusion and sea level rise due to climate change (water, sewer, sanitation ), pollution of water resulted from industrial development
Capital for technical infrastructure investments is high
The qualifications of management staffs for projects in rural infrastructure
CASE STUDIES: CAN THO CITY AND LONG AN
Can Tho City
During the development and global economic integration of the country, Can Tho City is defined as a Central urban area of category I where is the economic - social, cultural center of MDR Region Can Tho plays the role of being domestic and international transportation clue as well as holding the strategic position in national security of the region and the country Can Tho city is also a critical pillar in promoting the development of the MDR The city is striving to achieve goals of becoming an industrial city by 2020
Can Tho has a natural area of approximate 1,409 km2, including 9 administrative units 18 The population of the city in 2009 is nearly 1.2 million people in which the urban population accounted for about 65, 83% and suburban population (rural area) accounted for 34.71% Can Tho plays an important role in the development strategy of the Government: developing Can Tho to become a driving force for the development of the MDR Can Tho city is a cultural - political – social-commercial center with the system of universities, hospitals and sports centers of the whole Region Can Tho is the training center to create the largest human resources throughout the Region The system of rivers and canals everywhere with the technical infrastructure help to connect Can Tho with surrounding areas in the country and foreign countries by road, waterway and airway Thanks to the rich system of rivers and canals, Can Tho has become an attractive destination for tourists
18 Can Tho city: 5 urban districts of Ninh Kieu, Cai Rang, Binh Thuy, O Mon and Thot Not and 4 suburban districts of Phong Dien, Co Do, Vinh Thanh, Thoi Lai
Additionally, it is also the largest agricultural production area with the advantages of a regional research center on agricultural production
Source: www.cantho.gov.vn Figure 10: Administration map of Can Tho City
The economic growth in 2009 reached 15.03% Per capita income in
2009 was USD1,749 (The highest rate in the MDR)
Can Tho City has 36 rural communes which is the lowest number of rural communes in MDR Region, and the urbanization nature is high (66.03% of the population is living in urban areas) 19
19 Department of Urban Development (2012), Annual Report on Urban Development of Vietnam, Ministry of
Table 3: Total investment capital for rural development in Can Tho from
(Unit: billion Vietnam Dongs - VND)
Contributed capital from the people 20,000 25,360 12,61 126,80
In 2012, total capital for constructing essential infrastructure reached VND 157,525 billion, accounting for 73.57% of the investment capital for rural development, with the funding mix comprising VND 129,020 billion from the State Budget, VND 3,145 billion from enterprises, and VND 25,361 billion contributed by the people This finance structure shows a heavy reliance on the state budget (81.90%), alongside notable contributions from the people (16.10%) and enterprises (2%) to rural infrastructure development.
Rapid urbanization is creating development opportunities for Can Tho’s rural communes, thanks to the infrastructure of surrounding urban areas However, census results for rural areas show that, as of 2011, the rural infrastructure criteria of Can Tho City have not kept pace with the city’s overall development, particularly in the agriculture and fisheries sector (see Table 1, Section 4.1) This gap appears connected to the summarized results of the PAPI index.
2011 Accordingly, PAPI 2011 value of Can Tho city only reached the average
20 Central Steering Committee for National Target Program to construct new rural areas (2012), Preliminary report on 02 years of implementation of the National Target Program to construct new rural areas of Can Tho City, Hanoi. value, the indexes of the transparency and accountability of government to the people are not high, at 5.49 and 5.55 respectively This shows that the ability to mobilize the contribution from the people for construction of rural infrastructure could be higher if the local governments in Can Tho city improve the transparency in compensation price frame for land recovered for construction of infrastructure, as well as in revenues and expenditures of the local budget and carry out the accountability to the people.
Long An Province
Long An province sits in Vietnam’s Southern key economic zone and the Mekong Delta Region (MDR), acting as a strategic gateway to Ho Chi Minh City, Vietnam’s largest economic hub With seaport access via the Soai Rap estuary to the east, it lies just 15 km from the East Sea and shares an eastern border with Cambodia, giving Long An a distinctive locational advantage This combination of location, connectivity, and cross-border access underpins Long An’s growing role as a key driver of regional development and economic activity.
Source: www.longan.gov.vn Figure 11: Administrative map of Long An Province
Located right in the North of the Mekong River - well known in South Vietnam, Long An has a tropical climate with daily temperatures of above
30 o C/86 o F all year During the rainy season (May to November), there are a lot of very heavy rain It only takes 60 minutes driving from Long An to Ho Chi Minh City
Long An has area of 4,491km 2 , including 15 district-level administrative units 21 The growth rate in 2009 was 13.07% Per capita income in 2009 was 1200USD/person
Unlike Can Tho - a city with a high rate of urbanization, the rate of urbanization in Long An Province reached only 17.8% (2012) 22 Long An Province has the most number of communes in the Mekong Delta Region (166 rural communes) With large natural area, rural population accounting for the majority, the contributions raised by the people can be a great opportunity for the development of rural infrastructure of Long An, but it is also a significant challenge for Long An authorities to mobilize community participation
Table 3: Total investment capital for rural development in Long An from 2011-2012 23
(Unit: billion Vietnam Dongs - VND)
21 Long An province: Tan An City, KienTuong, Ben Luc, Can Duoc, Can Giuoc, ChauThanh, Duc Hue, MocHoa, Tan Hung, Tan Thanh, Tan Tru, ThachHoa, Thu ThuaVinh Hung, DucHoa Districts
22 Department of Urban Development (2012), Annually Report on Urban Development of Vietnam, Ministry of Construction
The 23-member Central Steering Committee for the National Target Program to construct new rural areas (2012) has released a preliminary two-year report on the program's implementation in Long, highlighting progress made, key challenges, and recommended next steps to advance rural modernization.
Capital contributed by people in Long An in 2012 increased 2.3 times compared with 2011, while capital from the central did not increase significantly
In 2 years (2011-2012), total realized capital for building essential infrastructure in rural are of Long An is 4578.5 billion VND, in which: the capital from central budget accounting for 6.78%, from provincial budget accounting for 11.81%, from district budget accounting for 67.39%, from commune budgets accounting for 0.01%, from business organizations accounting for 2.01%, from contribution by people accounting for 11.68% and from other sources accounting for 0.32%
Long An Province achieved the highest results among 13 provinces in the Mekong Delta Region
According to the Public Administration Performance Index (PAPI) data for 2011, Long An was the only province nationwide to achieve the highest score in all six PAPI criteria, posting a voluntary contributions score of 1.07 (second in the region), openness and transparency of 6.15, and accountability to the people of 6.26—the highest in the region and among the leading provinces in the country.
Clearly, improvement in openness - transparency and accountability to the people in government of all levels in Long An was properly concerned It is evident in the level index of voluntary contributions in participation index of the people in the basic level
On the basis of a simple calculation of contribution percentage of citizens to construction of rurally technical infrastructure as 16.10 % (of 157.525 billion VND in Can Tho) and 11.68% (of 4,578.5 billion VND in Long An), study group see that mobilization of citizen’s contribution plays an important role in reducing capital amount from State budget With low
24 Comparing PAPI of some provinces/cities - Appendix urbanization rate in the Mekong Delta, more participation of citizens is, less budget for infrastructure construction investment is
Can Tho and Long An display divergent patterns in urbanization levels, the share of residents engaged in agriculture, and provincial-level administrative and public-management indicators The study finds an organic, close link between the Mekong Delta’s rural infrastructure development and volunteer participation, as well as residents’ financial, land, and labor contributions, alongside expectations of transparency and accountability Local authorities that openly provide land information, disclose budget use, and account for public-work investments tend to mobilize stronger community contributions across finance, land, and labor In contrast, per-capita income and general levels of understanding have little effect on participation and contribution Importantly, rural residents with limited development opportunities and information access can still contribute more if local government is open, transparent, and prepared to address questions during project deployment.