Statement by Independent Expert on the effects of foreign debt: End of Mission to Viet Nam, 21-29 March 2011

Hanoi, 29 March 2011

Members of the media, ladies and gentlemen,

I would like to begin by warmly thanking the Government of Viet Nam for inviting me to undertake a mission to the country, for the importance it attached to the mission and for its full cooperation during my visit. I would also like to express my gratitude to the United Nations Country Team, in particular, the Office of the Resident Coordinator, for its assistance in preparing for and logistical support during the visit.

The main purpose of my visit was to assess, in the spirit of cooperation and dialogue, the impact of the country’s foreign debt on the realization of human rights and the achievement of the UN Millennium Development Goals (MDGs). I also explored the impact of the global economic downturn on Viet Nam’s debt burden, human rights and MDGs.

I have had very insightful and constructive discussions with senior Government officials from various ministries; representatives of the National Assembly Committee on Budget and Economy, officials of the State Bank of Viet Nam, the country’s development partners (both bilateral and multilateral), and members of civil society. I thank all of those that provided information and shared their perspectives.

The discussions have yielded vast amounts of information. In addition, I have been provided with large amounts of official documents and the Government and other stakeholders have undertaken to provide more documents. All of this information will need to be carefully considered in the preparation of my comprehensive report 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.

Today, I would like to share with you my preliminary observations and recommendations arising from the mission in the spirit of fostering further cooperation and with a view to contributing to the efforts directed at improving human development in Viet Nam. These will be developed and explored in more detail in my final report.

Ladies and gentlemen,

The Government of Viet Nam deserves to be commended on its remarkable progress towards fulfilling the MDGs. Viet Nam 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 Viet Nam can achieve the remaining MDGs by the target date.

In the last decade, Viet Nam’s income per capita has risen from USD 390 in 2000 to USD 1200 in 2010. More than seven million jobs have been created. Viet Nam’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 the socio-economic conditions of its people.

Despite this commendable progress, the country faces a number of challenges, including those linked to its “lower middle-income” status. During my visit, I have heard repeated concerns about the so-called “middle-income country trap”, according to which 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 Viet Nam. Last year, it supplemented nearly 11 percent of the total social investment and 17 percent of the total state budget.

However, Viet Nam’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.

The impact of climate change poses another challenge. Viet Nam 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.

The Government acknowledges 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 (including the National Assembly, development partners and civil society), 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.

In its Universal Periodic Review report, the Government intimated that the people of Viet Nam are at the centre of the Government’s national development strategy. According to Viet Nam’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.

In order to fully ensure that principle, however, it is important that national economic and social policies and programmes are firmly anchored in a human rights-based framework which underscores participation, transparency and accountability. These principles (i.e., participation, transparency and accountability) are key components of any sustainable development strategy. A human rights-based approach that guides the design, implementation and evaluation of socio-economic programmes and projects will not only enhance the effectiveness of the Government’s development strategy, it will also contribute to achieving sustainable results.

The citizens of Viet Nam are not only the main beneficiaries of Government’s economic and social development programmes, they are also the most important stakeholders in the country’s development. As such, every effort should be made to fully involve them in the design, implementation and evaluation of development policies and programmes.  

In that context and in order to strengthen the effectiveness of its SEDS, the Government could consider adopting a National Human Rights Action Plan as recommended in the Vienna Declaration and Programme of Action.

It is also important to note that while poverty alleviation lays an important foundation for the promotion and protection of human rights, it is not in itself a guarantor of such protection. It is therefore critical that national policies and programmes, including those on poverty reduction and social protection, are firmly anchored in the human rights framework provided by the country’s Constitution and the international human rights treaties that it has ratified. 

I note that the Constitution of Viet Nam enshrines a number of human rights guarantees and that Viet Nam has ratified a number of core international human rights instruments and International Labour Organization (ILO) Conventions. I also welcome the Government’s commitment to ratifying the Convention on the Rights of Persons of Disabilities and signing the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment. These international instruments contain important obligations for States parties to undertake legislative and other measures, including the establishment of human rights institutions, to give effect to the treaty provisions. In this regard, I note that discussions are currently underway concerning the establishment of a national human rights institution in conformity with the Principles relating to the Status of National Institutions for the Promotion and Protection of Human Rights (“the Paris Principles”). I believe that such an institution would be an important complement to the Government’s efforts to improve the social conditions of its people.

Regarding the sustainability of Viet Nam’s foreign debt and its effect on MDGs, I would like to point out the two issues that require urgent attention: addressing the budget and trade deficits. In addition, there is need address the challenges of access to information. In order 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. These measures would be important complements to the Government’s development efforts.

As I mentioned earlier, these are preliminary observations and recommendations, which will be developed and explored in more detail in my final report and through consultation with the Government as part of the ongoing dialogue on this important issue.

Thank you

Mr. Cephas Lumina is an Advocate of the High Court for Zambia and holds a PhD in international law/human rights from Griffith University. He was appointed ‘Independent Expert 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’ by the United Nations Human Rights Council in 2008. He is independent from any government or organization and serves in his individual capacity. The mandate covers all countries.

For further information on the mandate of the Independent Expert, please visit the website: http://www2.ohchr.org/english/issues/development/debt/index.htm